Walmart Vs Target

Corporations keep various types of financial records and it is the responsibility of managers to make sure that the records are maintained and resolved at the end of the fiscal year. Most company has shareholders that want a year-end account on how the company has done and with a projection of what the company is capable of doing in the future. The shareholders have a vested interest and want to be kept informed on how the company is doing financially. Financial records for major corporations are public knowledge and this paper is comparing Target and Wal-Mart and their financial standings.

Wal-Mart Corporation

Wal-Mart Stores, Inc. operates retail stores in various formats around the world. Wal-Mart is committed to growing by improving the standard of living for our customers throughout the world. Wal-Mart earns the trust of its customers every day by providing a broad assortment of quality merchandise and services at every day low prices while fostering a culture that rewards and embraces mutual respect, integrity, and diversity. In 2006 the net sales were $312.4 billion versus in 2005 were $285 billion.

The following chart shows the basic financial highlights of the fiscal years 2006 & 2005.

Financial summary Fiscal year 2006 Fiscal year 2005

Operating results

Net sales 312427 285222

Net sales increase 9.5% 11.3%

Comparative store sales increase in US 3% 3%

Cost of sales 240391 219793

Operating, selling, general expenses 56733 51248

Interest expense net 1172 986

Income from continuing operations 11231 10267

Per share of common stock

Income from continuing operations 2.68 2.41

Net income diluted 2.68 2.41

Dividends .6 .52

Financial positions

Current assets 43824 38854

Inventories 32191 29762

Property. Equipment and capital lease assets 79290 68118

Total assets of continuing operations 138187 120154

Current liabilities of continuing operations 48826 43182

Long term debt 26429 20087

Long-term obligations under capital leases 3742 3171

Share holder equity 53171 49396

Key items that occurred in fiscal 2006 are that net sales increased 9.5%from 2005 to $312.4 billion and had a net income increased of 9.4% to $112.2 billion. Net cash provided by operating activities was $17.6 billion for fiscal 2006 versus $15.0 billion in fiscal 2005. In 2005 Wal-Mart repurchased $4.5 billion of the common stock under the share repurchase program and paid dividends of 2.2 billion and in 2006 the repurchase of $3.6 billion of common stock under the share repurchase program and paid dividends of $2.5 billion. In 2005 Wal-Mart issued $5.8 billion in long-term debt securities and repaid $2.1 billion of long term debt. In 2006 Wal-Mart issued $7.7 billion in long-term debt and repaid $2.7 billion of long-term debt and funded a net decrease in commercial paper of $704 million. Total assets increased 15% to $138.2 billion by January 31, 2006 when compared to January 31, 2005. During the fiscal year of 2006, Wal-Mart made $14.6 billion of capital expenditures, which was an increase of 13% over capital expenditures of $12.9 Billion in fiscal 2005. In comparison to fiscal 2005 versus fiscal 2006 Wal-Mart experienced an 8.2 % increase in operating income and a 9.4% increase in net sales in fiscal 2006.

Wal-Mart is exposed to certain risks in addition to the risks inherent in the operations of the corporation. The risks include changes in interest rates and changes in foreign currency exchange rates. At the end of fiscal years 2006 and 2005, Wal-Mart had $31.0 billion and $23.8 billion, respectively of long-term debt outstanding. The weighted average effective interest rate on long-term debt, after considering the effect of interest rate swaps, was 4.79% and 4.08% in 2006 and 2005, respectively (annual report, 2006)

Another factor that must be addressed which impacts on utilization of assets is impairment of assets. Wal-Mart’s position on this is that they evaluate long-lived assets other than goodwill for indicators of impairment