BUS 470 GCU Stakeholder Walmart Current Ratio Analysis

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yreblowrgfba

Business Finance

BUS 470

Grand Canyon University

BUS

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The purpose of this assignment is to identify key stakeholders within your organization who are affected by, have influence over, or have an interest in solving the problem you are attempting to address with your action research project.

Stakeholder analysis requires you to examine a number of variables in relation to each individual or group you have identified. Use the "Stakeholder Brainstorming" resource provided as a tool to assist you in completing the "Stakeholder Analysis" Excel spreadsheet.

In the analysis, list titles and groups of stakeholders. Do not list names of specific individuals. It is important to note the role each stakeholder has in the problem and in solving the problem. Determine whether or not the individual or group has a negative, indifferent, positive, or very positive predisposition about the problem.

Within the "Stakeholder Analysis" spreadsheet, there is a tab labeled "Current-State Matrix." Study the terminology related to influence and support and think about how each block describes the feelings a stakeholder may have about the problem and proposed solution. For example, there may be a group or individual that has a high degree of support with regard to solving the problem. If you know such person or group also has a high level of influence in how the problem is solved, it is important to think about how you will approach this person or group in terms of seeking information and presenting potential solutions. Taking time to rank the level of influence and support for each stakeholder is critical as you proceed, because it may have a large role in determining whether or not specific problem solutions can be implemented.

Take the time necessary to conduct research that will help you determine possible stakeholder reactions and issues related to potential solutions. Think about the motivation, drivers, and expectations of exchange for each stakeholder, the problem, and the proposed solutions. Finally, consider the role of the stakeholder, including when the stakeholder needs to be involved in the change effort, any stakeholder management activities, and stakeholder deliverables and timelines. If a stakeholder will ultimately end up having a designated role in implementing the solution, the ability to articulate the role, scope, and timeframe will be of utmost importance.

Complete the "Stakeholder Analysis" spreadsheet and submit it to the instructor along with a 500-word summary of your findings. In the summary, discuss the following:

  1. Summarize stakeholder attitudes about the identified problem and support your summary with specific data from your collection tool.
  2. Summarize stakeholder attitudes or experiences related to previously implemented problem solutions and support your summary with specific data from your collection tool.
  3. Summarize stakeholder ideas for potential solutions and support your summary with specific data from your collection tool.
  4. Who are the stakeholders you will seek to act as sponsors to support you in the implementation of a problem solution? Provide specific reasons why these stakeholders are key to implementing a solution.
  5. Who are the stakeholders that will likely be directly affected by solving the problem? Provide specific ways these stakeholders could be directly affected by solving the problem.
  6. Who are the stakeholders who could pose potential roadblocks to solving the problem? Provide specific reasons why these stakeholders could pose potential roadblocks and what those roadblocks could be.

AttachmentsBUS-470-RS-Stakeholder Brainstorming.docx
BUS-470-RS-Stakeholder_Analysis.xlsx

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Understanding Stakeholders What is a stakeholder? According to Cambridge Dictionary “A stakeholder can be an employee, customer, or citizen who is involved with an organization, society, etc. and therefore has responsibilities towards it and an interest in its success.” While this definition appears generally broad, the stakeholders involved with an implementation can be numerous. This section reviews different types of stakeholders, introduces tools for both stakeholder identification and analysis towards both priorities and stakeholder support. There are two different types of stakeholders, internal and external. Internal stakeholders are those involved day to day in the program. These are individuals associated with the actual project or specific problem. External stakeholders are those outside of the organization who are influenced or impacted by the project or issue. There may also be external stakeholders that may be part of the project depending on the issue. There are many different stakeholders and it is important to understand the interest and influence of each. The first step is to brainstorm and identify all the potential stakeholders. Figure 1 is an example of a stakeholder diagram depicting the target audience call center quality issue. The second ring of circles represents the individuals or organizations that have a direct connection with the interests of the primary stakeholder impacted by the initiative. The other rings around the secondary group are tertiary stakeholders who have a direct connection with the interest of the secondary stakeholders in support of the primary stakeholders. The key purpose of this brainstorming tool is to ensure that you have not missed a stakeholder group. First you must revisit the problem statement to ensure that you have the focus of the issue. Below the example problem statement is an example of brainstorming for internal and external stakeholders. Problem: Many call center representatives are not achieving quality standards, thereby contributing to the overall low-quality rating (92%) for the call center. Through data and process evaluation, it was determined that the training time for call center representatives is 30% less than other similar call centers, which may contribute to lack of skills training. In addition, the online tools available to the call center representatives are not updated frequently with procedural changes and do not contain all required information necessary for representatives to perform their job. The low quality over the past 6 months has resulted in a 2% decrease in customers and a $550,000 loss in annual revenue. Decreased employee satisfaction in the call center due to the issue has contributed to a 5% increase in voluntary attrition, which costs the business $80,000 annually. There is an opportunity to improve quality and reduce both customer and employee attrition by addressing the skills training and resource issue in the call center. © 2019. Grand Canyon University. All Rights Reserved. Figure 1 Employee tertiary family Local Businesses Customer Organizations Employee Immediate Family Customers Customer Families Other internal organizations Call Center Employees Curriculum Team Stakeholders Call Center Leadership Organization Leaders Training Group Human Resources Training Team Recruitment Staff HR Leadership Once the stakeholder individuals or organizations are identified, they require analysis for interest and support. The other critical aspects of this analysis are to understand what the stakeholder is contributing and identification of an action plan. Reference the "Stakeholder Analysis Template" in the course materials for an example. 2 Negative Support/High Influence (Commit) I N F L U E N C E Negative Support/Moderate Influence (Invest) N C E Negative Support/Low Influence (Marginalize) SUPPORT Positive Support/High Influence (Leverage) Positive Support/Moderate Influence (Plan) Positive Support/Low Influence (Maintain) SUPPORT Name of Stakeholder Description of Stakeholder Role of Stakholder Example: Call Center Manager Leader of the Call Center in Phoenix Project Sponsor Level of Knowledge in Program High level of knowledge Available Resources, Information, Influence, Money, Staff, Technology, etc. Funding of project and internal resources from call center Level of Interest High Level of Support Positive Level of Influence High Action Plan for Stakeholder Engagement Maintain regular communication with stakeholder on progress and updates. 1 Qualitative and Quantitative Research on Walmart’s Current Ratio Gilbert Johnson Grand Canyon University Applied Business 25 June 2021 2 Qualitative and Quantitative Research on Walmart’s Current Ratio Part 1 The current ratio is a metric that gauges an organizations' ability to meet its short-term obligations. When a business has a current ratio of less than one, the current assets are higher than its current liabilities; hence, it experiences difficulties in catering for its current business obligations (Pandey & Bhatt, 2020). Therefore, this report analyzes the current adverse ratio of Walmart Corporation and its effects on the business performance. The current ratio for Walmart appears will be as shown below: Current ratio 0.94 0.92 0.9 0.88 0.86 0.84 0.82 0.8 0.78 0.76 0.74 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Current ratio Source: Qualitative data from Macrotrend 3 The relationship between the current ratio a and the net margin of a business can be shown in the following scatter diagram: y = 2.552x + 1.0655 R² = 0.0578 Scatter Plot 4 3.5 3 2.5 2 1.5 1 0.5 0 0.8 0.82 0.84 0.86 0.88 0.9 0.92 0.94 From the scatter plot above, it can be concluded that there is a positive linear relationship between the current ratio and the net margin. It implies that a higher current ratio in the target's business results in higher profits, while lower current ratios lead to lower profits. However, the relationship is relatively weak as only 5% of the changes in net margin can be explained by the fluctuation in the current ratio. The remaining 95% of the variation in net margin can be explained by other factors such as competition and other external factors. Part 2 A favorable current ratio is desirable to a company since it implies that it can meet its obligations comfortably. The ideal current ratio for all firms is one and not more than 1.5. A current ratio that I above 1.5 indicate the company is not efficiently using its assets (Macrotrend, 2020). At Walmart Corporation, the current ratio from 2005 to 2020 has been less than one, which means its current liabilities have been higher than its current assets. 4 I conducted a survey to understand the reasons why Walmart had a current ratio of less than one and the solutions the company undertook. The following questions were asked: 1. What caused the company to run with a current ratio of less than 1? 2. What impact does the current ratio have on business performance in terms of operational efficiency and profitability? 3. Have there been efforts to improve the business's current ratio, and what are the efforts? 4. How does an adverse current ratio affect customer's importance, efficiency, quality, and employee satisfaction? 5. How do measures adopted to improve Walmart's ratio affect customer experience, efficiency, and employee satisfaction. The survey was addressed to Walmart's management and industry pundits and provided the following insights: Causes of a current ratio less than 1 Retail companies tend to have low current ratios and quick ratios. A comparison with peers such as Costco and Target corporation can confirm this premise. For instance, in the third quarter of 2013, target corporation had a quick ratio of 0.2 while Costco had a quick ratio of 0.6 (Hargreaves, 2013). Therefore, it is an industry thing. Another main reason why Walmart has a low current ratio is that it has high supplier leverage. Its account payables are pretty high. Impact of an adverse current ratio When a company's current assets fall below the current liabilities, the company may be unable to pay its current obligations, such as paying its current creditors, paying wages and salaries on time, and other short-term obligations such as interest and tax payments (Pandey & 5 Bhatt, 2020). Therefore, the delay or inability to meet the short-term obligations negatively impacts the company's operational efficiency, leading to reduced profits. Profit reduction is due to additional costs that the company must incur to cover the shortfall in current assets, such as taking bank overdrafts (Pandey & Bhatt, 2020). Bank overdrafts are cost-ineffective due to the high inters rates charged. Furthermore, difficulty in meeting employee dues and when they fall due affects employee morale and satisfaction negatively. Solutions advanced Despite a lower current ratio associated with the retail industry, Walmart's current ratio has been below the industry average. The management of Walmart has tried to address the issue by reducing supplier leverage. However, reducing supplier leverage limits the variety and the volume of products that Walmart can offer its customers, which may negatively affect customer experience. Another way Walmart has tried to improve its current ratio is by renegotiating the credit terms with its suppliers to allow for more time for settling of account payables (Pandey & Bhatt, 2020). This eases the pressure on the working capital and enables the company to cater to the most pressing needs, such as paying workers' dues. In addition, the renegotiation of credit terms with the suppliers by Walmart increases the company's operational efficiency and enables it to run smoothly. The following chart shows the trend in the current ratio after Walmart undertook measures to enhance its current ratio. From this trend, there has not been any significant 6 improvement in the current ratio since 2005. Trend Current ratio 0.94 0.92 0.9 0.88 0.86 0.84 0.82 0.8 0.78 0.76 0.74 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Part 3 The management of companies is always trying to enhance the current ratio of their companies. A current ratio of 1:1 is not adequate since not all current assets can easily be converted into cash to meet the current short-term obligation. Companies need to maintain a margin of safety by ensuring they have a current ratio of more than one. Companies have taken several measures to improve their current ratio. Some of the measures taken include; They are negotiating for a faster debtor conversion cycle. The management of various companies in different industries has renegotiated their credit terms with their debtors to reduce the credit period as much as possible and hence improve liquidity (Pandey & Bhatt, 2020). More frequent and faster payment from debtors enhances the company's operational efficiency as the company's cash is not tied up on debtors. Companies have also enhanced their payment of current liabilities. Early payment of creditors reduces the interest payments and enables the company to get discounts, easing pressure on the working capital. 7 Companies have also improved their current liabilities by selling off idle and unproductive assets. Unproductive assets block money and lead to unnecessary accrual of interest costs. Selling of the unproductive assets also grants the company ready to use cash which enhances its working capital. It is common practice for companies to improve their current assets through shareholders' funds (Borad 2019). Financing current assets through equity increase the current assets while the current liabilities remain intact, improving the current ratio. These measures impact business performance since they impact the operational efficiency of the companies, enhance customer experience, and boost employee satisfaction. The chart below shows the impact of the intervention measure carried out by companies in the retail sector on the industry's current ratio. The measures taken in the industry are effective and have led to an improvement in the current ratio. Industry trend 1.34 1.32 1.3 1.28 1.26 1.24 1.22 1.2 1.18 1.16 2014 2015 2016 2017 2018 2019 2020 2021 8 References Borad, S. B. (2019, October 28). How to analyze and improve current ratio? eFinanceManagement. https://efinancemanagement.com/financial-analysis/howto-analyze-and-improve-current-ratio Hargreaves, R. (2013, November 30). Does Wal-Mart Have a Liquidity Problem? The Motley Fool. https://www.fool.com/investing/general/2013/11/30/does-wal-mart-have-aliquidity-problem.aspx Macrotrend. (2020). Walmart Current Ratio 2006-2021 | WMT. Macrotrends | The Long Term Perspective on Markets. https://www.macrotrends.net/stocks/charts/WMT/walmart/current-ratio Pandey, I. M., & Bhatt, R. (2020). A Casebook In Financial Management | (4th ed.). McGrawHill Education. Year Current ratio 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Margin 0.89 0.85 0.85 0.88 0.87 0.87 0.88 0.83 0.87 0.92 0.92 0.86 0.81 0.93 0.81 0.84 3.57 3.24 3.4 3.41 3.33 3.59 3.77 3.57 3.63 3.27 3.12 2.98 2.31 2.91 2.77 3.6 Scatter Plot 4 3.5 3 2.5 2 1.5 1 0.5 0 0.8 0.82 0.84 0.86 y = 2.552x + 1.0655 R² = 0.0578 Scatter Plot Current ratio 0.94 0.92 0.9 0.88 0.86 0.84 0.82 0.8 0.78 0.76 0.74 0.88 0.9 0.92 0.94 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Current ratio 2018 2019 2020 Walamart's trend in current ratio Year Current ratio 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Margin 0.89 0.85 0.85 0.88 0.87 0.87 0.88 0.83 0.87 0.92 0.92 0.86 0.81 0.93 0.81 0.84 3.57 3.24 3.4 3.41 3.33 3.59 3.77 3.57 3.63 3.27 3.12 2.98 2.31 2.91 2.77 3.6 Trend Current ra 0.94 0.92 0.9 0.88 0.86 0.84 0.82 0.8 0.78 0.76 0.74 2005 2006 2007 2008 2009 2010 Trend Current ratio 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Industry Trend Year Current ratio Profit Margin 2015 1.18 2.2 2016 1.23 2 2017 1.24 2.2 2018 1.21 2.2 2019 1.24 2.7 2020 1.32 1.9 Industry trend 1.34 1.32 1.3 1.28 1.26 1.24 1.22 1.2 1.18 1.16 2014 2015 2016 2017 Industry trend 2017 2018 2019 2020 2021
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Explanation & Answer

View attached explanation and answer. Let me know if you have any questions.HelloPlease find the attached final answerIn case you need editing, kindly reach out to meGoodbye for now. Cheers😊

Negative Support/High Influence
(Commit)

I
N
F
L
U
E
N
C
E

Negative Support/Moderate Influence
(Invest)

N
C
E

Negative Support/Low Influence
(Marginalize)

SUPPORT

Positive Support/High Influence
(Leverage)

Positive Support/Moderate Influence
(Plan)

Positive Support/Low Influence
(Maintain)

SUPPORT

Name of Stakeholder

Description of Stakeholder

Executive Managers

High ranked personnel such as CEO, CFO, CIO

Investors/Shareholders

Walmart's legitimate owners

Mid-level Managers
Creditors

Middle-ranged personnel such as accountants
These stakeholders lend resources to Walmart

Government

The USA federal regulatory agencies such as SEC

Level of Knowledge in
Program

Role of Stakholder
Monitoring current assets and
liabilities
High level of knowledge
Protecting Walmart's assets
Computing and presenting
current assets and liabilities
Providing short-term loans
Regulating and oversiting
Walmart's financial activities

Middle-level of knowledge
High le...


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