Walmart Case Study

Background Information

Ш Wal-Mart Inc.

Corporate Headquarters

· 702 Southwest 8th street

Bentonville, Ar 72716-8001

Top Executives

· President and CEO: H. Lee Scott

· Chairman of the Board: S. Robson Walton

· Chairman, Executive Committee of the Board: David D. Glass

· Chief Financial officer & Executive Vice President: Thomas M. Schoewe

Industry

· General Merchandise, SIC code: 5399

Divisions

· Wal-mart stores

· Sam’s Club

· International

Major Products

· Hardware

· House-wares

· Auto Supplies

· Small Appliances

· Domestics

· Grocery

· Candy

· Tobacco

· Pharmaceuticals

· Electronics

· Health & Beauty Aids

· Sporting Goods

· Toys

· Stationary

· Jewelry

· Shoes

· 1-hour Photo

Major Competitors

· Target

· Sears Roebuck & Co.

· Kmart

· Costco Wholesale

Most Successful Wal-mart Brands

· Ol’ Roy

· Great ValueТ

· EquateТ

Financial Analysis

Ш Profitability

Wal-mart experienced sales growth of 20% in the fiscal year of 2000. This impressive increase is a direct result of the companies expansion program. Wal-mart has also acquired a few international stores, which are doing very well and adding to the companies’ profit. As the table shows wal-mart is no stranger to climbing profits, in fact wal-mart has managed to increase sales by no less than 12% (typically more) each year for 11 consecutive years.

Year Net Earnings Net Sales Profitability

2000 $5,377 $165,013 0.0326

1999 $4,430 $137,634 0.0322

1998 $3,526 $117,958 0.0299

1997 $3,056 $104,859 0.0291

1996 $2,740 $93,627 0.0293

Ш Analysis

Ш Liquidity

Wal-marts’ liquidity has been decreasing since 1996, which is a good sign from a growing company.

In 2000 wal-marts liquidity dropped off drastically, this is on account of their expansion projects. They are willing to take some short-term risks, because they are very confident it will pay off down the road. A lot of wal-marts’ money is being pumped into the super centers and also financing the over seas expansion.

Year Current Assets Short-term Debt Liquidity

2000 $24,356 $25,803 0.9439

1999 $21,132 $16,762 1.2607

1998 $19,352 $14,460 1.3383

1997 $17,331 $11,454 1.5131

1996 $15,338 $9,973 1.5380