Financial Comparison Annual Report

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you gonna see all the information in the files

choose these companies please :

  • Wal-Mart (WMT) and Dollar General DG)

make sure there is no PLAGIARISM

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PAPER 1-STRATEGIC MANAGEMENT-FINANCIAL ANALYSIS-SUMMER 2019 Select one pair of companies from the following list: • • • • • Wal-Mart (WMT) and Dollar General DG) Papa John’s (PZZA) and Domino’s (DPZ) Starbucks (SBUX) and Dunkin Brands (DNKN) Charles Schwab ((SCHW) and TD Ameritrade (AMTD) GM (GM) and Toyota (TM) Review the most recent annual reports for each of the two companies to gain an understanding of each company’s products and services, the markets they serve, their strategies, strategic goals, key strategic actions, and financial performance. Complete a financial analysis to determine which of the two companies has better overall financial performance by looking at the most recent full-year financial reports (USE ONLY ANNUAL REPORT DATA), and compare a the financial performance metrics of the two companies (see sample below). A well- performing company is one whose overall financial performance is better than the industry average over a long period of time, and is generally measured by ROIC (return on invested capital). A company that achieves superior financial performance generally has consistent annual revenue and profit growth; higher than industry average profit margins; high inventory turns; positive cash flows; and a strong balance sheet, when compared to other firms in their industry. Superior financial performance is the result a good business strategy that is executed well and often includes investments in appropriate technology; visionary leadership; talented and dedicated employees; a customer focus; having and maintaining a competitive advantage, and a strong operational focus on strategic goals. Based on your analysis, explain which of the two companies has the better overall financial performance and why. What does the company do well to achieve the superior financial performance? What is the strategy of the better performing company (cost leadership, differentiation, focus, or a combination of several)? How does their strategy compare with their competitor? EXAMPLE OF FINANCIAL ANALYSIS: 1|Page Financial Comparisons Financial Metric Current Year Total Revenues Current Year Net Profit (income) Net Profit Margin Return on Assets Return on Equity Debt to Equity Return on Invested Capital Earnings Growth (3yr.) Revenue Growth (3 yr.) Inventory Turns Sales/Square Foot Sales/Employee Net Income/Employee Free Cash Flow Company 1 $12.3bn $0.54bn 4.39% 8.57% 23.0% 0.71 18.6% -1.7% 4.2% 8.3 $437 $218,400 $6,876 $0.20 bn Company 2 $6.7bn $0.23bn 3.45% 6.22% 36.6% 2.11 21.7% +15.4% 2.7% 15.0 161 $277,328 $7,243 $0.16 bn ANALYSIS: Company 2 has better overall financial performance, as its Return on Invested Capital is 21.7% compared to 18.6% for Company 1. Company 2 is faster growing in earnings (15.4% per year), and does a much better job with inventory turns (15.0 vs. 8.3); but its revenue growth is slower that Company 1. This suggests that Company 2 does a better job in managing their costs and investment to which results in better financial performance with slower growth than their competitor. Best on an analysis of their annual report and strategic actions, there strategy is one of being the low cost provider in the industry which well positions them for future growth and further increases in profitability. Format and Content of Paper: Each paper should have: a cover page, an abstract, an introduction, an analysis section, conclusions based on the analysis, recommended actions, and a brief summary of the paper’s key points, and a reference page. Include table of financial comparisons in body of paper. Paper to follow APA format. All the Guidelines for Written Assignments apply to this paper including a minimum of four credible outside sources. All data should come from each company’s most recent annual report and use only full year figures. Annual reports are found on each company’s website or on www.sec.gov. 2|Page Below are the sources and calculations of the metrics: • • • • • • • • • • • Current year Total Revenues comes from the Income Statement Current year Net Profit (or Income) comes from the Income Statement Net Profit Margin is calculated by dividing the Net Income by the Total Revenues Return on Assets is calculated by dividing the Net Income (from Income Statement) by the by the Total Assets (from the Balance Sheet) Return on Equity is calculated by dividing the Net Income (from the Income Statement) by the Total Stockholder’s Equity (from the Balance Sheet) Debt to Equity is calculated by taking the sum of the short-term debt and the long-term debt (from the Balance Sheet) and divide by the Total Shareholders Equity (from Balance Sheet). Return on Invested Capital (ROIC) is calculated by dividing the Net Income (from the Income Statement) by the total of the Long-term Debt (from the Balance Sheet) plus the Shareholders Equity (from the Balance Sheet) Earnings Growth (3 year) is calculated by subtracting the current year’s Net Income (from Income Statement) from the Net Income of three years ago (from the Income Statement) and dividing this difference by the Net Income from 3 years ago. If the current year’s Net Income is lower than 3 years ago, then the growth is negative. Revenue Growth (3 year) is calculated by subtracting the current year’s Total Revenues (from Income Statement) from the Total Revenues from 3 years ago and dividing the difference by the Total Revenues from 3 years ago. If the Total Revenues for the current year is less than 3 years ago, then the growth is negative. Inventory Turns is calculated by dividing the Total Cost of Goods (from the Income Statement) by the total inventory (from the Balance Sheet). Cash Flow comes from the Statement of Cash Flows and is the Cash and Cash Equivalents at End of Year. 3|Page 4|Page Sample APA Formatted Paper APA Research Paper (Mirano) Obesity in Children Can Medication Cure Obesity in Children? A Review of the Literature Luisa Mirano Psychology 107, Section B Professor Kang October 31, 2004 XXXX Marginal annotations indicate APA-style formatting and effective writing. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). i Short title and page number for student papers. Lowercase roman numerals are used on title page and abstract page, arabic numerals on all text pages. Full title, writer’s name, and section number of course, instructor’s name, and date (all centered). Sample APA Formatted Paper Abstract appears on a separate page. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper Full title, centered. The writer sets up her organization by posing four questions. The writer states her thesis. The writer uses a footnote to define an essential term that would be cumbersome to define within the text. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper Headings, centered, help readers follow the organization. In a signal phrase, the word “and” links the names of two authors; the date is given in parentheses. Because the author (Carmona) is not named in the signal phrase, his name and the date appear in parentheses, along with the paragraph number of the electronic source. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper Ellipsis mark indicates omitted words. An ampersand links the names of two authors in parentheses. The writer draws attention to an important article. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper The writer uses a table to summarize the findings presented in two sources. A note gives the source of the data. A content note explains data common to all subjects. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper When this article was first cited, all four authors were named. In subsequent citations of a work with three to five authors, “et al.” is used after the first author’s name. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper For a source with six or more authors, the first author’s surname followed by “et al.” is used for the first and subsequent references. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper The writer develops the paper’s thesis. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper Brackets indicate a word not in the original source. A quotation longer than 40 words is set off from the text without quotation marks. The writer interprets the evidence; she doesn’t just report it. The tone of the conclusion is objective. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper Obesity in Children 9 While none of the medications currently available is a miracle drug for curing the nation’s 9 million obese children, research has illuminated some of the underlying factors that affect obesity and has shown the need for a comprehensive approach to the problem that includes behavioral, medical, social, and political change. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper List of references begins on a new page. Heading is centered. List is alphabetized by authors’ last names. All authors’ names are inverted. The first line of an entry is at the left margin; subsequent lines indent 1⁄ 2'' (or five spaces). Double-spacing is used throughout. Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006). Sample APA Formatted Paper Source: Diana Hacker (Boston: Bedford/St. Martin’s, 2006).
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Explanation & Answer

Attached.

Financial Comparison - Outline
I.

Organization
A. Walmart
B. DG

II.

Financial Comparison
A. Growth
B. Profitability

III.

Superior Performance

A. Cost leadership
B. Differentiation


Running head: FINANCIAL COMPARISON

1

Financial Comparison
Name
Institution

FINANCIAL COMPARISON

2
Financial Comparison

Financial comparison is essential as it helps in focusing on the changes taking place in an
organization. The comparison is important for investors as this means there is appraisal of the
financial statements and the auditing of the changes as they arise. The accuracy of the
comparison is critical as this enables the development of accountability measures embracing the
change that is required in the operations of the organization. The rate of satisfaction for the
investor is important as this means there is assessment of the accuracy of the financial reports
and the expected changes in the environment that might affect the different elements in the
organizations.
Organization Background
Walmart operates in the retail industry and the company started in 1962. The aim of the
company was to make a difference to the customers through offering the product required under
the same roof. The analysis of the leadership in the company is important as thus helps in
increasing the number of customers and this in turn improves the returns of the investors.
Walmart has changed the competition in the retail industry and this contributes to the success of
the company. There is implementation of services that enable the growth of the business and the
creation of opportunities that are excellent towards the enhancement of the business operations.
In focusing on the company operations in the retail industry, there is development of partnerships
that enable the increase in customer experiences. It results to the improvement of the association
of the customers with the company and this increases the stability that the company requires
(Stankevičiūtė, Grunda & Bartkus, 2012). In building the success of the company, the focus is on
saving the lives of the people through the reduction of the costs of living. In the case, there is
increase in the savings through reduction of ...


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