Financial Analysis of Wal-Mart

Financial Analysis of Wal-Mart

Introduction

The report is based upon the performance of Wal-Mart over the last three years, ranging from 2011 to 2013. Various major events have been taken into account which is set to have an impact upon the financial performance of Wal-Mart, such as imposition of the penalty over the last year. Its basic aim is to develop an understanding of the various financial measures used to forecast the financial performance of a particular company. The financial analysis has been done on the basis of univariate and multivariate analysis.

The structure of the report is designed in a categorical manner. Firstly, the historical overview of the company is provided, along with the major events that have occurred during the last three years and their financial implications. Secondly, Wal-Mart's performance is evaluated through financial analysis and the financial analysis is done through univariate and multivariate models (Tsay, R. S. 2005). Lastly, an appendix section is placed where all Wal-Mart's financial statements are provided along with the calculations of the financial analysis.

Historical overview and major events

Historical overview

Wal-Mart's foundation was laid by Sam Walton who opened the first Wal-Mart store in 1962. In 1970 Wal-Mart became a public limited company. By 1990, it had become the top retailer in the country. Its philosophy was to provide the customer with cheap prices. By the start of the millennium, Wal-Mart had its presence all over the world, whether it was United Kingdom or China. As of today Wal-Mart is the largest retailer in the world and has more than 10,000 retail units all around the world. Wal-Mart has grown at a phenomenal rate over the years. It is also the largest employer in the world providing employment to around 2.2 Million individuals. In 2012, Wal-Mart celebrated its fifty years (MarketLine. 2013).

Major events

Over the last three years, Wal-Mart's financial performance has been affected by a number of events such as being accused and even pleading to environmental crimes. According to Wal-Mart's higher management, it is their uttermost priority to lead in terms of social and environment perspectives. For that they have taken several measures, but still there are certain gaps left and they need to be taken care.

Every organization, irrespective of its size, shall have some sort of contribution towards Corporate Social Responsibility (CSR) activities. Without a proper base in the shape of a society, it would be really difficult for any organization to grow or even survive. Therefore, it is the responsibility of the company to give something back to the society as well, in the form of CSR activities. Over these three years, Wal-Mart has taken a number of initiatives related to environmental and social concerns.

Wal-Mart understands that it is its 'responsibility to lead” as far as CSR is concerned. Hence, it has set aside a major proportion of budget for these activities. According to the Wal-Mart's 2013 Global Responsibility Report, they have clearly outlined the responsibility categories as Social, Environmental, Company, and ...