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Walmart Inc. Performance Report Edited

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Walden University
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Running head: PERFORMANCE REPORT ON WALMART 1
Performance Report on Walmart
Student's Name
Institutional Affiliation

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PERFORMANCE REPORT ON WALMART 2
TO: Supervisor
FROM: Financial Analyst
DATE: August 5, 2019
SUBJECT: Performance Report on Walmart
Comparison of Walmart's Ratios to Industry Standard
This memo focuses on informing you that based on the SEC (2019) and as the data
source the following analysis is made for Walmart Inc.
Brigham and Houston (2013) noted that if an organization is having financial challenges,
the company starts paying off its accounts payable slowly and borrows from the bank, thereby
increasing the current liabilities. Current ratio is an effectiveness ratio that assesses an
enterprise’s capability to clear its short-term liabilities utilizing the current assets. After
analyzing Walmart's financial report, as indicated in Appendix 1, the current ratio is 0.8, which is
less than the industry criteria of 1.6. Thus, the firm's liquidity position is weak. Walmart could
improve its current ratio by submitting the invoice to clients as early as possible, as well as
switching from the use of short term to long-term debt. According to Brigham and Houston
(2013), creditors prefer an organization with minimum debt ratio since the lesser the debt ratio,
the higher the security against bank’s losses in the case Walmart bankruptcy. Debt ratio assesses
a enterprise’s total liabilities as a proportion of the aggregate assets. Referring to Appendix 1,
Walmart's debt ratio is 58%, which is far lesser than the industry standard of 18%. This point out
that creditor has financed more than 50% of Walmart's total funds. It, therefore, makes it
expensive for Walmart to seek extra funds without getting additional equity. In this case,
Walmart should reduce its financial leverage. Thus, the company should avoid taking more debts

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Running head: PERFORMANCE REPORT ON WALMART Performance Report on Walmart Student's Name Institutional Affiliation 1 PERFORMANCE REPORT ON WALMART 2 TO: Supervisor FROM: Financial Analyst DATE: August 5, 2019 SUBJECT: Performance Report on Walmart Comparison of Walmart's Ratios to Industry Standard This memo focuses on informing you that based on the SEC (2019) and as the data source the following analysis is made for Walmart Inc. Brigham and Houston (2013) noted that if an organization is having financial challenges, the company starts paying off its accounts payable slowly and borrows from the bank, thereby increasing the current liabilities. Current ratio is an effectiveness ratio that assesses an enterprise’s capability to clear its short-term liabilities utilizing the current assets. After analyzing Walmart's financial report, as indicated in Appendix 1, the current ratio is 0.8, which is less than the industry criteria of 1.6. Thus, the firm's liquidity position is weak. Walmart could improve its current ratio by submitting the invoice to clients as early as possible, as well as switching from the use of short term to long-term debt. According to Brigham and Houston (2013), creditors prefer an organization with minimum debt ratio since the lesser the debt ratio, the higher the security against bank’s losses in the case Walmart bankruptcy. Debt ratio assesses a enterprise’s total liabilities as a proportion of the aggregate assets. Referring to Appendix 1, W ...
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