What is Walmart's WACC?

Anonymous
timer Asked: Apr 30th, 2017

Question description

I am working on a finance project in which I must compare financials of Walmart and Costco.

Appendix E: Guidelines for the Project Due Date and Submission Instructions The entire project should be contained in one Excel file. Do not submit additional documents. Your Excel file should be titled as follows, using your last name: Lastname_620project. Late projects will not be accepted. Formatting and Presentation The entire project should be contained in one Excel file. This is not a term paper, but some narrative will be necessary. There are various ways to insert narrative into Excel, from using comments to merging cells and wrapping text to inserting whole Word documents or other objects. Your spreadsheet should be laid out in a clear and logical manner. You will need to use more than one “sheet,” and each sheet should be labeled. All data should be formatted in a manner that makes sense (e.g., the sales growth rate should be formatted as a percentage). Excel formulas should be used in the most efficient way possible. For example, instead of typing numbers into a cell to calculate a ratio, type a formula that refers to the cells that the financial statement data items are located in. Proceed as though I am either your boss or an important client, instead of an instructor who is obligated to try to figure out what you have done even if it is not presented clearly. Clearly explain what you have done. Get right to the point. More is not necessarily better. Don’t make formatting and presentation an afterthought. General Description of Project The assignment is to perform a financial and business analysis of a large, publicly-traded U.S. retailer. The firms that you may choose from are listed below. There are several reasons that I am limiting your choices to a small group of large U.S. retailers. First, the operations of retailers are relatively simple to understand, so it is feasible to arrive at a view of the firm’s competitive situation even if you don’t start out with a deep knowledge of the industry. Second, the group of firms that I have selected share certain financial characteristics that allow students to apply some of the material covered in the course. Third, I want to stick with U.S. firms because it is relatively easy to obtain free, up to date, and accurate financial data on publicly traded U.S. firms. Company name Lowe's Companies, Inc. Home Depot Inc Ross Stores, Inc. TJX Companies Inc Bed Bath & Beyond Inc. Ticker LOW HD ROST TJX BBBY 1 Gap Inc Costco Wholesale Corporation Wal-Mart Stores, Inc. Target Corporation Kroger Co, The Macy's, Inc. Nordstrom, Inc. Dollar General Corp. Best Buy Co Inc Dicks Sporting Goods Inc GPS COST WMT TGT KR M JWN DG BBY DKS Specific Requirements of the Project 1. Identify the firm’s closest publicly-traded U.S. competitor. This is the firm that is most similar in terms of the markets that it serves and is closest in size in terms of revenues and enterprise value. Explain your choice and mention any other possible close competitors that you may have considered. I recommend completing this requirement by the end of week 2 of the course. 2. Perform the computations for a cross-sectional and time series ratio analysis of your firm and the competitor using the last 10 years of data. If the last set of annual statements doesn’t bring you up to date, also use the trailing-twelve-month (ttm) income statements and cash flow statements and use the most recent quarter’s (mrq) balance sheet. In addition, calculate the growth rates of a few key variables such as sales. I recommend completing this requirement by the end of week 3 of the course. 3. Analyze the firm’s recent financial performance and current financial health, using the ratio analysis techniques learned in the course. Be sure to touch on liquidity, capital structure, asset management efficiency, and profitability. Focus your discussion on ratios or growth rates that have changed a great deal in recent years, that differ greatly from the competitor’s metrics, and that you believe to be important drivers of the firm’s value. I recommend completing this requirement by the end of week 6. It might be fruitful to think about the firm’s financial and competitive situation (item 4 below) at the same time. 4. Analyze the firm’s competitive environment. You may use a framework such as Porter’s five forces or a SWOT analysis to organize your thoughts if you wish, but that isn’t required. You don’t need to go into as much detail here as you would in a strategic management class. Focus on the most important issues. If you do use one of the above frameworks, don’t include the parts that are irrelevant or only marginally relevant. Your conclusions from this analysis, along with your analysis of the firm’s recent financial performance, should inform your financial projections. I recommend completing this requirement by the end of week 6. It might be fruitful to think about the firm’s financial and competitive situation at the same time. 2 5. Estimate the firm’s weighted average cost of capital (WACC) using the techniques presented in the course. Be sure to explain how you arrived at your estimates of all components of the WACC. I recommend completing this requirement by the end of week 10. 6. Analyze a scenario in which your firm acquires Barnes and Noble, Inc. (BKS). Hint: remember that an acquisition of a whole company can be thought of as a capital budgeting “project” and evaluated accordingly. Assume that the acquisition is made for cash, for a 20% premium to the current stock price. Your firm has to retire any outstanding debt, but can also use any excess cash or investments to offset the purchase price. Assume also that the acquisition of BKS is considered an average risk project for your firm. Project the incremental cash flows that the acquisition will provide your firm with in perpetuity. If you want to add some extra challenge, you may assume that there will be some cost benefits from the acquisition. This is frequently described as “synergy” and typically takes the form of lower “overhead,” or general and administrative expenses as a percentage of sales. Lastly, calculate the net present value (NPV) and the payback period for the acquisition. I recommend completing this requirement by the end of week 12. 7. Project the firm’s income statement and balance sheet one-year forward, using the techniques learned in the course. If there are items on the firm’s historical financial statements that you don’t understand, read the notes to the financial statements in the original filings. Items that are not material may be ignored or consolidated into a “miscellaneous” category. I recommend completing this requirement by the end of week 13. The remainder of the project should then be completed as soon as possible. 8. Estimate the firm’s free cash flows in perpetuity, the value of the firm’s operations, and the intrinsic value per share of the firm’s common stock using the free cash flow model. Hint: the “Free Cash Flow Valuation in Excel” video presented with the Chapter 7 material may be helpful. If you follow that model, there should be some consistency between the values that you use for the key value drivers in the model and the values that you estimate for your firm’s projected financial statements for next year in item 7 above. 9. Perform a scenario analysis with 3 different valuation scenarios (base case, downside case, upside case) using Excel’s Scenario Manager tool. Don’t make it too complicated. Pick two or three key value drivers to vary in the scenario analysis. Put the results in a separate, well labelled table. Then give your best point estimate of the intrinsic value per share. Is the stock a buy or a sell? Explain why in one to three sentences. 10. Calculate the trailing P/E ratio and EV/EBITDA ratio that are implied by your estimated intrinsic value and use these calculations to as a “reality check” on your intrinsic value estimate. For example, if your estimate of intrinsic value implies a P/E of 100, then you 3 should be able to explain why that makes sense in this one particular case or go back and come up with a more reasonable estimate of intrinsic value. Data Sources Following are some data sources that might be helpful for the project: 1. The SEC’s Edgar website for official corporate filings: http://www.sec.gov/edgar/searchedgar/companysearch.html. The most recent annual report on form 10-K usually provides a great deal of useful information about the company’s business in addition to presenting its financial statements. The quarterly report on form 10-Q is typically not as detailed as the 10-K but it does contain updated financial statements, notes to the statements, and some of the other information that appears in the 10-K. Most of you will probably use Morningstar data for most of your analysis, but it occasionally contains errors and it may not have every data item that you need, so you will want to spend some time with the firm’s actual filings. 2. Morningstar, available online through the Fayetteville State library, has financial statement data and a variety of other data going back 10-years, downloadable in Excel. Note that Morningstar transforms and aggregates original financial statement data to fit its categories. This usually isn’t a problem. 3. Seeking Alpha has transcripts of the quarterly conference calls held by most public companies and articles on stocks written by professional and amateur analysts: http://seekingalpha.com/. The firm’s most recent conference call can provide a quick way to get up to speed with some of the major issues facing the company. To find the transcript, click on the “Earnings” link for your company. 4. Professor Aswath Damodaran’s website has a variety of useful data, spreadsheets, and other materials: http://pages.stern.nyu.edu/~adamodar/ 5. The website of the company that you analyzing and the websites of its close competitors. Investor presentations sometimes posted in the Investor Relations section of the website are often very useful. Grading The project is worth 30% of your grade in the course. It will be graded on a 100-point scale. Each of the ten specific requirements discussed above are worth 10% of the project grade. Each of the 10 parts will be graded on both content and presentation, so format and organize your results in a way that makes them easy to find and read. It is possible to earn up to 10 percentage points of extra credit on your course grade (not just your project grade) for outstanding work on the project. You do not have to complete a perfect project to earn some extra credit. For example, you might make a major mistake estimating the horizon value in item 8 that leads to a project grade of less than 100%, but you might still get some extra credit points for doing a fabulous job on the WACC (item 5) and the competitive analysis (item 4). 4
Walmart is an American multinational retailing corporation that operates as a chain of hy discount department stores, and grocery stores. While headquartered in Bentonville, Ar founded by Sam Walton in 1962, the retailer is the world's largest company by revenue a largest private employer with about 2.2 million employees. I'm sure we all know Walmar slogan: "Save Money. Live Better", "Always Low Prices". Walmart vs. Costco vs. Target Costco and Target are Walmart's top two competitors as of today. Costco holds a market cap of 65.8 billion with Costco ranked #37 in sales while Target ranked #88 according to Forbes. Target holds a market cap of 49.4 billio Costco's current enterprise value is at $72,575. Target's current enterprise value is at $44,893. Walmart being th Costco http://www.forbes.com/companies/costco-wholesale/ Target http://www.forbes.com/companies/ rket cap of 65.8 billion with 205,000 employees, and sales being at $117.27 billion. a market cap of 49.4 billion with 341,000 employees, and sales being at $73.78 billion. $44,893. Walmart being the highest, holds an enterprise value of $ 251,527. Walmart http://www.forbes.com/companies/wal-mart-stores/ WAL-MART STORES INC (WMT) CashFlowFlag INCOME STATEMENT Fiscal year ends in January. USD in millions except per share data. Revenue Cost of revenue Gross profit Operating expenses Sales, General and administrative Total operating expenses Operating income Interest Expense Other income (expense) Income before income taxes Provision for income taxes Minority interest Other income Net income from continuing operations Net income from discontinuing ops Other Net income Net income available to common shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted EBITDA WAL-MART STORES INC (WMT) CashFlowFlag BALANCE SHEET Fiscal year ends in January. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Total cash Receivables Inventories Prepaid expenses Other current assets Total current assets Non-current assets Property, plant and equipment Land Fixtures and equipment Other properties Property and equipment, at cost Accumulated Depreciation 2007-01 2008-01 2009-01 348650 378799 405607 46588 286515 306158 84498 92284 99449 64001 64001 20497 1809 280 18968 6365 425 70288 70288 21996 2103 305 20198 6908 406 76651 76651 22798 2184 284 20898 7145 499 12178 -894 12884 -153 13254 146 11284 11284 12731 12731 13400 13400 2,71 2,71 3,13 3,13 3,4 3,39 4164 4168 26236 4066 4072 28618 3939 3951 29821 2007-01 2008-01 2009-01 7373 7373 2840 33685 2690 5569 5569 3654 35180 3182 46588 47585 7275 7275 3905 34511 3063 195 48949 18612 27134 69444 115190 -26750 19879 30236 78269 128384 -31367 19852 32158 79151 131161 -35508 Property, plant and equipment, net Goodwill Other long-term assets Total non-current assets Total assets Liabilities and stockholders' equity Liabilities Current liabilities Short-term debt Capital leases Accounts payable Taxes payable Accrued liabilities Other current liabilities Total current liabilities Non-current liabilities Long-term debt Capital leases Deferred taxes liabilities Minority interest Other long-term liabilities Total non-current liabilities Total liabilities Stockholders' equity Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity WAL-MART STORES INC (WMT) Statement of CASH FLOW Fiscal year ends in January. USD in millions except per share data. Cash Flows From Operating Activities Net income Depreciation & amortization Deferred income taxes (Gain) Loss from discontinued operations Accounts receivable Inventory Accounts payable Accrued liabilities Income taxes payable Other working capital Other non-cash items Net cash provided by operating activities Cash Flows From Investing Activities 88440 13759 2406 104605 151193 97017 16071 2841 115929 163514 95653 15260 3567 114480 163429 8283 11269 7669 28090 30370 28849 15381 16815 51754 58454 18789 83 55390 27222 3513 4971 2160 29799 3603 5111 1939 31349 3200 6014 2191 37866 89620 40452 98906 42754 98144 2834 55818 2921 61573 151193 3028 57319 4261 64608 163514 3920 63660 -2295 65285 163429 2007-01 2008-01 2009-01 11284 5459 89 12731 6317 -8 13400 6739 581 -1274 -775 -220 2718 1888 20164 1335 754 20354 1525 1122 23147 Investments in property, plant, and equipment Property, plant, and equipment reductions Acquisitions, net Other investing charges Net cash used for investing activities Cash Flows From Financing Activities Short-term borrowing Long-term debt issued Long-term debt repayment Repurchases of treasury stock Cash dividends paid Other financing activities Net cash provided by (used for) financing activities Effect of exchange rate changes Net change in cash Cash at beginning of period Cash at end of period Free Cash Flow Operating cash flow Capital expenditure Free cash flow Supplemental schedule of cash flow data Cash paid for income taxes Cash paid for interest WAL-MART STORES INC (WMT) CashFlowFlag BALANCE SHEET Fiscal year ends in January. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Total cash Receivables Inventories Prepaid expenses Total current assets Non-current assets Property, plant and equipment Land Fixtures and equipment Other properties Property and equipment, at cost Accumulated Depreciation Property, plant and equipment, net Goodwill Other long-term assets Total non-current assets -15666 394 542 267 -14463 -14937 957 -1595 -95 -15670 -11499 714 -738 781 -10742 -1718 -2802 -319 -4839 97 959 6414 7373 -7691 -3586 4143 -7134 252 -2198 7767 5569 -3521 -3746 -2651 -9918 -781 1706 5569 7275 20164 -15666 4498 20354 -14937 5417 23147 -11499 11648 2014-07 6184 6184 6146 45451 1851 59632 177975 5549 183524 -64801 118723 19758 5872 144353 2014-10 2015-01 6718 6718 6091 51501 1531 65841 9135 9135 6778 45141 2224 63278 183126 183126 -65634 117492 18888 5668 142048 26261 47851 108522 182634 -65979 116655 18102 5671 140428 Total assets Liabilities and stockholders' equity Liabilities Current liabilities Short-term debt Capital leases Accounts payable Taxes payable Accrued liabilities Other current liabilities Total current liabilities Non-current liabilities Long-term debt Capital leases Deferred taxes liabilities Minority interest Total non-current liabilities Total liabilities Stockholders' equity Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity 203985 207889 203706 8175 301 36828 511 18237 3100 67152 10893 302 39656 383 18773 1553 71560 6402 287 38410 3613 16560 43004 2695 8311 5077 59087 126239 41720 2767 7789 4944 57220 128780 41086 2606 8805 4543 57040 122312 323 2208 77172 -1957 77746 203985 323 2223 80814 -4251 79109 207889 323 2462 85777 -7168 81394 203706 65272 2010-01 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 TTM 408214 421849 446950 469162 476294 485651 482130 484604 304657 315287 335127 352488 358069 365086 360984 360512 103557 106562 111823 116674 118225 120565 121146 124092 79607 79607 23950 2065 181 22066 7139 513 513 14927 -79 -513 14335 14335 81020 81020 25542 2205 201 23538 7579 604 604 15959 1034 -604 16389 16389 85265 85265 26558 2322 162 24398 7944 688 688 16454 -67 -688 15699 15699 88873 88873 27801 2251 187 25737 7981 757 757 17756 3,71 3,7 4,48 4,47 3866 3877 31288 3656 3670 33384 2010-01 2011-01 93418 93418 27147 2461 113 24799 7985 736 736 16814 285 -736 16363 16363 97041 97041 24105 2548 81 21638 6558 386 386 15080 100891 100891 23201 2347 87 20941 5886 595 595 15055 -757 16999 16999 91353 91353 26872 2335 119 24656 8105 673 673 16551 144 -673 16022 16022 -386 14694 14694 -595 14460 14460 4,54 4,52 5,04 5,02 4,9 4,88 5,07 5,05 4,58 4,57 4,61 4,6 3460 3474 34850 3374 3389 36489 3269 3283 35861 3230 3243 36433 3207 3217 33640 3127 3137 33093 2012-01 2013-01 7907 7907 4144 33160 2980 140 48331 7395 7395 5089 36318 2960 131 51893 6550 6550 5937 40714 1685 89 54975 7781 7781 6768 43803 1588 22591 37805 80215 140611 -38304 24386 40885 89218 154489 -46611 23499 41916 95523 160938 -48614 2014-01 2015-01 2016-01 9135 9135 6778 45141 2224 8705 8705 5624 44469 1441 59940 7281 7281 6677 44858 1909 460 61185 63278 60239 25612 43699 102413 171724 -55043 26184 45756 106738 178678 -60771 26261 47851 108522 182634 -65979 25624 49950 112480 188054 -71538 102307 16126 3942 122375 170706 107878 16763 4129 128770 180663 112324 20651 5456 138431 193406 116681 20497 5987 143165 203105 117907 19510 6149 143566 204751 116655 18102 5671 140428 203706 116516 16695 6131 139342 199581 4573 346 30451 1365 18734 92 55561 5686 336 33557 157 18701 47 58484 6022 326 36608 1164 18154 26 62300 12392 327 38080 5062 15957 6402 287 38410 3613 16560 5453 551 38487 3065 17063 71818 11773 309 37415 3520 16239 89 69345 65272 64619 33231 3170 5508 2180 307 44396 99957 40692 3150 6682 2705 408 53637 112121 44070 3009 7862 4446 404 59791 122091 38394 3023 7613 5395 519 54944 126762 41771 2788 8017 5084 1491 59151 128496 41086 2606 8805 4543 38214 5816 7321 3065 57040 122312 54416 119035 3577 63967 998 68542 180663 342 3692 68691 -1410 71315 193406 332 3620 72978 -587 76343 203105 323 2362 76566 -2996 76255 204751 323 2462 85777 -7168 81394 203706 317 1805 90021 -11597 80546 199581 378 3803 66638 -70 70749 170706 2010-01 14848 7157 -504 79 -297 2265 1052 1348 301 26249 2011-01 16993 7641 651 -1034 -733 -3086 2557 -433 1087 23643 2012-01 16387 8130 1050 67 -796 -3727 2687 59 398 24255 2013-01 17756 8501 -133 -614 -2759 1061 271 981 527 25591 2014-01 2015-01 2016-01 TTM 16695 8870 -279 -144 17099 9173 -503 -285 15080 9454 -672 15055 9805 1482 -1667 531 103 -1224 -566 938 23257 -1229 2678 1249 166 -569 785 28564 -703 2008 1303 418 3526 1897 -491 1410 27389 -534 379 32028 -12184 1002 -13510 580 -3548 -131 -16609 -12898 532 -316 71 -12611 -13115 727 -15 105 -12298 -12174 570 -11477 635 -10713 1056 -438 -11620 -12699 489 -202 219 -12193 479 -11125 167 -10675 -4501 -14158 -1033 5546 -6379 -7276 -4217 -832 -14191 194 632 7275 7907 503 11396 -4443 -14776 -4437 -271 -12028 66 -512 7907 7395 3019 5050 -4939 -6298 -5048 -242 -8458 -33 -845 7395 6550 2754 211 -1478 -7600 -5361 -498 -11972 223 1231 6550 7781 911 7072 -4968 -6683 -6139 -1210 -11017 -442 -500 7781 7281 -6288 5174 -3904 -1015 -6185 -2853 -15071 -514 1854 7281 9135 1235 39 -4432 -4112 -6294 -2558 -16122 -1022 -430 9135 8705 132 -2050 -8646 -6248 -1186 -17998 -923 -1051 6990 5939 26249 -12184 14065 23643 -12699 10944 24255 -13510 10745 25591 -12898 12693 23257 -13115 10142 28564 -12174 16390 27389 -11477 15912 32028 -10713 21315 7389 2141 6984 2163 5899 2346 7304 2262 8641 2362 8169 2433 8111 2540 2015-04 2015-07 7759 7759 5813 46310 2251 62133 5751 5751 5275 45007 2099 58132 183493 183493 -67808 115685 17531 5398 138614 178899 7194 186093 -69582 116511 17799 6178 140488 2015-10 2016-01 6990 6990 5012 50706 2404 65112 8705 8705 5624 44469 1441 60239 187608 187608 -70652 116956 17051 6025 140032 25624 49950 112480 188054 -71538 116516 16695 6131 139342 2016-04 2016-07 2016-10 7597 7597 5187 44513 1800 59097 7676 7676 5275 43453 1828 58232 5939 5939 5344 49822 2296 63401 189963 189963 -73469 116494 16751 6363 139608 178596 11544 190140 -74730 115410 16339 7905 139654 179667 11482 191149 -76061 115088 17792 10576 143456 200747 198620 205144 199581 198705 197886 206857 6840 427 37224 1707 18685 4741 69624 5749 463 37225 373 18290 3162 65262 7706 558 40553 587 19499 1589 70492 5453 551 38487 3065 17063 64619 6070 559 37997 1328 19605 4723 70282 4197 551 39902 720 19651 3101 68122 7348 549 42990 459 21243 1541 74130 38867 4097 8169 3416 54549 124173 38581 4262 8391 3253 54487 119749 38617 5581 7824 3059 55081 125573 38214 5816 7321 3065 54416 119035 37151 6242 7272 2575 53240 123522 36673 6070 7877 2619 53239 121361 36178 5930 10144 2782 55034 129164 323 2354 82492 -8595 76574 200747 321 1979 84959 -8388 78871 198620 321 2006 87903 -10659 79571 205144 317 1805 90021 -11597 80546 199581 313 1720 84145 -10995 75183 198705 310 1915 85972 -11672 76525 197886 308 2084 87636 -12335 77693 206857 COSTCO WHOLESALE CORP (COST) CashFlowFlag INCOME STATEMENT Fiscal year ends in August. USD in millions except per share data. Revenue Cost of revenue Gross profit Operating expenses Sales, General and administrative Total operating expenses Operating income Interest Expense Other income (expense) Income before income taxes Provision for income taxes Minority interest Other income Net income from continuing operations Other Net income Net income available to common shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted EBITDA COSTCO WHOLESALE CORP (COST) CashFlowFlag BALANCE SHEET Fiscal year ends in August. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Short-term investments Total cash Receivables Inventories Deferred income taxes Other current assets Total current assets Non-current assets Property, plant and equipment Land Fixtures and equipment Other properties Property and equipment, at cost Accumulated Depreciation 2014-08 2014-11 2015-02 35523 26866 27454 31037 23385 23897 4486 3481 3557 3395 3395 1091 35 30 1086 381 8 8 705 -8 697 697 2711 2711 770 26 35 779 274 9 9 505 -9 496 496 2680 2680 877 27 20 870 263 9 9 607 -9 598 598 1,59 1,58 1,13 1,12 1,36 1,35 438 442 1442 439 442 1059 440 443 1157 2014-08 2014-11 2015-02 5738 1577 7315 1148 8456 669 5969 1650 7619 1248 9644 645 5866 1587 7453 1287 8558 760 17588 19156 18058 4716 4845 13114 22675 -7845 4697 5022 13040 22759 -7961 4907 5016 12961 22884 -8012 Property, plant and equipment, net Other long-term assets Total non-current assets Total assets Liabilities and stockholders' equity Liabilities Current liabilities Short-term debt Accounts payable Taxes payable Accrued liabilities Deferred revenues Other current liabilities Total current liabilities Non-current liabilities Long-term debt Deferred taxes liabilities Minority interest Other long-term liabilities Total non-current liabilities Total liabilities Stockholders' equity Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity COSTCO WHOLESALE CORP (COST) Statement of CASH FLOW Fiscal year ends in August. USD in millions except per share data. Cash Flows From Operating Activities Net income Depreciation & amortization Deferred income taxes Stock based compensation Inventory Accounts payable Other working capital Other non-cash items Net cash provided by operating activities Cash Flows From Investing Activities Investments in property, plant, and equipment Purchases of investments Sales/Maturities of investments Other investing charges Net cash used for investing activities 14830 606 15436 33024 14798 659 15457 34613 14872 670 15542 33600 8491 578 3004 1254 1085 14412 9783 420 2992 1305 1519 16019 1200 8302 433 3191 1318 3805 18249 5093 1004 212 5034 990 211 3830 1096 219 6309 20721 6235 22254 5145 23394 2 4919 7458 -76 12303 33024 2 4963 7782 -388 12359 34613 2 5064 5937 -797 10206 33600 2014-08 2014-11 2015-02 705 321 -61 76 21 -74 -140 -6 842 505 254 607 260 150 -1328 1445 186 -84 1128 86 933 -1208 227 -5 900 -567 -647 606 2 -606 -555 -426 342 -14 -653 -612 -231 295 21 -527 Cash Flows From Financing Activities Short-term borrowing Long-term debt issued Long-term debt repayment Excess tax benefit from stock based compensation Repurchases of treasury stock Cash dividends paid Other financing activities Net cash provided by (used for) financing activities Effect of exchange rate changes Net change in cash Cash at beginning of period Cash at end of period Free Cash Flow Operating cash flow Capital expenditure Free cash flow Supplemental schedule of cash flow data Cash paid for income taxes Cash paid for interest COSTCO WHOLESALE CORP (COST) CashFlowFlag BALANCE SHEET Fiscal year ends in August. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Short-term investments Total cash Receivables Inventories Deferred income taxes Other current assets Total current assets Non-current assets Property, plant and equipment Land Fixtures and equipment Other properties Property and equipment, at cost Accumulated Depreciation Property, plant and equipment, net Goodwill Other long-term assets Total non-current assets Total assets Liabilities and stockholders' equity 91 117 15 -77 9 -163 -311 13 -244 10 2 5736 5738 62 -18 10 -84 -167 -108 -136 231 5738 5969 -114 -265 -211 -103 5969 5866 842 -567 275 1128 -555 573 900 -612 288 150 33 282 23 2007-08 2008-08 2009-08 2780 576 3356 762 4879 327 2619 656 3275 748 5039 400 3157 570 3727 834 5405 371 9324 9462 10337 3010 2747 7312 13069 -3549 9520 3217 3057 8055 14329 -3974 10355 3341 3265 8717 15323 -4423 10900 763 10282 19607 865 11220 20682 742 11642 21979 Liabilities Current liabilities Short-term debt Accounts payable Taxes payable Accrued liabilities Deferred revenues Other current liabilities Total current liabilities Non-current liabilities Long-term debt Deferred taxes liabilities Minority interest Other long-term liabilities Total non-current liabilities Total liabilities Stockholders' equity Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity 114 5125 140 5225 97 5450 1495 692 1156 8582 1604 748 1157 8874 1720 824 1190 9281 2108 224 69 2206 328 82 2206 388 2401 10983 2616 11490 86 2680 11961 3118 5132 373 8623 19607 3543 5361 288 9192 20682 2 3811 6101 104 10018 21979 2015-05 2015-08 2015-11 2016-02 2016-05 2016-08 2016-11 TTM 26101 35778 27220 28170 26769 36560 28099 119598 22687 31096 23621 24469 23162 31649 24288 103568 3414 4682 3599 3701 3607 4911 3811 16030 2593 2593 821 31 9 799 280 3 3 519 -3 516 516 3526 3526 1156 40 40 1156 378 11 11 778 -11 767 767 2832 2832 767 33 28 762 275 7 7 487 -7 480 480 2845 2845 856 31 16 841 286 9 9 555 -9 546 546 2749 2749 858 30 7 835 286 4 4 549 -4 545 545 3720 3720 1191 39 29 1181 396 6 6 785 -6 779 779 2962 2962 849 29 26 846 291 10 10 555 -10 545 545 12276 12276 3754 129 78 3703 1259 29 29 2444 -29 2415 2415 1,17 1,17 1,75 1,73 1,1 1,09 1,24 1,24 1,24 1,24 1,78 1,77 1,24 1,24 5,5 5,48 440 443 1092 439 443 1547 438 441 1066 440 442 1157 439 441 1156 438 441 1628 438 441 1172 439 441 5113 2015-05 2015-08 2015-11 5063 1742 6805 1195 8869 765 4801 1618 6419 1224 8908 748 5054 1229 6283 1359 10382 834 17634 17299 4971 5145 13199 23315 -8232 4961 5274 13429 23664 -8263 2016-02 2016-05 2016-08 2016-11 3633 1222 4855 1453 8908 4884 1137 6021 1300 8927 3379 1350 4729 1252 8969 4805 1311 6116 1498 10721 18858 313 15529 294 16542 268 15218 235 18570 5079 5480 13797 24356 -8489 5140 5623 13939 24702 -8637 5266 5834 14352 25452 -8961 5395 6077 14695 26167 -9124 5389 6173 14876 26438 -9282 15083 774 15857 33491 15401 740 16141 33440 15867 726 16593 35451 16065 794 16859 32388 16491 840 17331 33873 17043 902 17945 33163 17156 806 17962 36532 1200 8895 466 2979 1336 1860 16736 1283 9011 1281 10378 89 8222 1193 8828 1100 7612 1159 11003 3281 2059 906 16540 3248 3465 3259 3386 18293 3657 15433 3719 16999 4431 1362 1070 15575 3396 1414 2189 19161 4826 1115 227 4864 1193 226 4845 1233 232 4886 3921 4061 3933 6168 22904 6283 22823 6310 24603 234 835 5955 21388 243 1205 5369 22368 253 1195 5509 21084 258 1207 5398 24559 2 5147 6164 -726 10587 33491 2 5218 6518 -1121 10617 33440 2 5247 6704 -1105 10848 35451 2 5341 7001 -1344 11000 32388 2 5404 7225 -1126 11505 33873 2 5490 7686 -1099 12079 33163 2 5528 7882 -1439 11973 36532 2015-05 519 262 2015-08 778 351 -59 93 -210 94 2015-11 2016-02 2016-05 487 271 555 285 549 291 101 1375 -1917 391 1 791 -624 -302 302 4 -620 65 -285 549 144 -25 1229 -19 1028 186 -1473 1435 -10 -85 811 -421 -376 223 -21 -595 -805 -468 574 -6 -705 -715 -197 584 -4 -332 2016-08 2016-11 TTM 75 106 434 211 193 1859 785 408 111 97 -33 -1484 -45 -8 -169 555 297 49 211 -1983 3707 47 -90 2793 2444 1281 335 484 -535 740 604 -79 5274 -461 -288 382 -1 -368 -849 -645 441 28 -1025 -667 -402 416 -2 -655 -2601 -1637 1541 29 -2668 -14 31 88 63 12 -123 -2358 1013 -1470 33 -803 5866 5063 2 -256 -351 5 -481 -104 -262 5063 4801 74 -142 -71 -219 -224 -2 253 4801 5054 1229 -421 808 1028 -805 223 2010-08 3214 1535 4749 884 5638 437 2011-08 4009 1604 5613 965 6638 490 -110 -80 208 91 -88 -178 -160 39 -466 -944 -1324 -2855 -1382 -1563 -29 -1421 5054 3633 -137 -176 92 -301 61 1251 3633 4884 -136 -394 -12 -331 39 -122 -198 -201 -660 -1525 4884 3359 1478 3379 4857 -249 5054 4805 811 -715 96 791 -624 167 1859 -461 1398 -169 -849 -1018 2793 -667 2126 5274 -2601 2673 298 31 149 21 98 41 408 30 171 34 826 126 2012-08 3528 1326 4854 1026 7096 550 2013-08 4644 1480 6124 1201 7894 621 2014-08 5738 1577 7315 1148 8456 669 2015-08 4801 1618 6419 1224 8908 748 2016-08 3379 1350 4729 1252 8969 11708 13706 13526 15840 17588 17299 268 15218 3484 3513 9363 16360 -5046 11314 3819 4002 10547 18368 -5936 12432 4961 5274 13429 23664 -8263 15401 5395 6077 14695 26167 -9124 17043 623 13055 26761 4409 4472 12141 21022 -7141 13881 63 499 14443 30283 4716 4845 13114 22675 -7845 14830 793 12107 23815 4032 4261 11253 19546 -6585 12961 66 587 13614 27140 606 15436 33024 740 16141 33440 902 17945 33163 26 5947 1893 869 1328 10063 900 6544 122 2746 1114 624 12050 1 7303 485 2523 1101 847 12260 8491 578 3004 1254 1085 14412 1283 9011 1100 7612 7872 459 2747 1167 1012 13257 3281 2059 906 16540 4431 1362 1070 15575 2141 681 101 1253 885 571 1381 981 157 4998 1016 179 5093 1004 212 4864 1193 226 4061 2519 14779 6193 19450 6309 20721 6283 22823 253 1195 5509 21084 2923 12986 2709 14759 4115 6590 124 10829 23815 2 4516 7111 373 12002 26761 2 4369 7834 156 12361 27140 2 4670 6283 -122 10833 30283 2 4919 7458 -76 12303 33024 2 5218 6518 -1121 10617 33440 2 5490 7686 -1099 12079 33163 Period Ending 2006 2007 2008 2009 2010 WMT COST 0,90 1,22 0,81 1,20 0,88 0,99 0,87 1,05 0,89 1,05 WMT COST 0,25 0,63 0,21 0,59 0,26 0,52 0,27 0,52 0,27 0,51 Current Ratio Quick Ratio 2011 2012 2013 2014 2015 TTM or MRQ 0,88 1,03 0,83 1,01 0,88 0,97 0,97 0,98 0,93 0,97 0,86 0,98 0,23 0,46 0,22 0,43 0,24 0,45 0,28 0,40 0,24 0,41 0,18 0,40 Working Capital Current Assets Current Liabilities Oct-15 65112 70492 Oct-16 63401 74130 -5380 -10729 Oct-15 65112 70492 Oct-16 63401 74130 0,92367928 0,85526777 Oct-15 Oct-16 Current Ratio Current Assets Current Liabilities Quick Ratio Strengths Weaknesses Opportunities Threats Walmart The largest retailer in the world with an unmatched scale of operations and strong market power over suppliers and competitors. Strong international presence. High efficiency of supply chain. Cost leadership strategy. Thin profit margins. Easily copied business model. Poorly prepared investment decisions. Dependent solely on sales from the U.S. market. Expand ecommerce and focus on consumer markers such as Latin America and Asia. Partnerships with large companies providing multiple services. Expanding product line. Online shopping. Competition from companies such as Costco and Target. Conflict of interests. International barriers. Market saturation. Costco Strong market presence. Expansive supply chain. Strong brand. Pricing Authority. Limited product mix. Low profit margins. Exclusivity to members. Geographic dependence. Diversification. Expansion of product mix. Expansion of locations. Attraction to younger customers. Competition with retail stores. Online competition. Low consumer confidence. Increased labor wages and demand. WACC = wdrd*(1 – T) + wprp + wsrs

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