Annual report evaluation of Wal-Mart

Essay by JASMINE01College, UndergraduateA, March 2009

download word file, 7 pages 4.0

Today, consumers who are searching for a department store that offers convenience as well as discounted prices, the first store that comes to mind is Wal-Mart. Founded in 1962 by Sam Walton, Walmart has become one of the largest retailers in the United States. Wal-Mart was incorporated on October 31, 1969 and later became a part of the New York Stock Exchange in 192 as WMT (, 2009). For my final project, I will evaluate Wal-Mart's annual reports for 2007 and 2008 as well as other financial information. Information listed on an annul report is essential for investors and shareholders in order to get an overall evaluation of the performance of the company. This report will evaluate the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ration, ROI, ROE, and P/E ratios. Investors and annalist uses these information along as other various ratios in order compute the current and future standing of a company.

Wal-Mart continues to grow and increase in sales and earnings. For fiscal year 2008, Wal-Mart posted record sales and earnings. The total net sale for the company was $375 billion which was and 8.6 percent increase over 2007. According to (2008), "Operating income was up 7.3 percent for the year, with income from continuing operations up 5.8 percent. Diluted earning per share from continuing operations for the fiscal year were $3.16, and increase of 8.2 percent over the previous year" These facts are evidence of how strong Wal-Mart as a company is despite difficult economic times. Wal-Mart has surpassed the generated free cash flow from 4.3 billion dollars in 2007 to 5.4 billion in 2008 (walmartstore, 2008).

What is the secret to Wal-Mart's success? Decades after founder Sam Walton died, the executives of Wal-Mart continue to rely on many of the...