Financial Analysis of Walmart --- in-depth study of its financial reports and its success formula
Quick Ratio is given by the addition of Cash and Cash equivalent plus Accounts Receivable the divide by the Current Liabilities (Stickney Weil 2004 . The current ratio was 0 .90 over 2006 t0 2007 while the quick ration on the other hand was 0 .19 and 0 .18 over 2006 and 2007 respectively (Jablonsky Barsky 2008 . Though the ratios are not very safe for Wal-Mart , it does not present any solvency or liquidity risk By maintaining low liquidity ratios , Wal-Mart Inc is able to operate with cash flow efficiency and give a
chance to squander cash on investments hence reducing the return on equity (ROE (Fridson Alverez 2002
The Financial Ratios
The financial ratios are very critical aspect on evaluation of the position of the company . Current ratio is calculated by current assets /current liabilities inventory turnover on the other hand is given by Cost of Goods sold (COGS ) over Average inventory debt ratio is given by through 2002 to 2005 the cost of goods sold reduced from 78 to 76 expressed as a percentage of sales , Business week (2006 . The cost of goods sold used 4 million supplies to every store they made each year but it has not been able to implement policies that cut down transportation costs . The CFO is maintained at a better position as it has been recording double digit since 2002 to 2007 experiencing some negative growth in 2004 - 2005 year due to the cash outflow in the working capital resulting from inventory accumulation (Jablonsky Barsky 2008 . Cash flow operations were constant net income expressed as a percentage of cash flow was 60 to 68 from 2004 to 2006
Debt /common equity is obtained by dividing long terms debt over the common stock equity , Wal-Mart 's current debt ratio is about 0 .52 Price...