FINANCIAL COMPANY COMPARISON

Wal-Mart & Costco

Wal-Mart & Costco

Wal-Mart

The stores of Wal-Mart are considered as one of the large retail chains of the world. The corporation's operations comprise three business segments: Wal-Mart U.S. engulfs diverse formats through which it operates large retail chain in regions of the United States. These formats and brands come under the umbrella of Wal-Mart brand. In addition, Wal-Mart is also engaged in online retail operations which are known as Wal-Mart.com. It is an international online retail chain that regulates its retail operations in 14 different countries; moreover, the enterprise controls different retail stores and restaurants that also include discount stores in order to retain the consumer. The Sam's Club comprises warehouse clubs that offer memberships in the U.S. and caters diverse online retail operations (samsclub.com).

Costco

The wholesale enterprise termed as Costco is responsible for controlling the operations related to the membership warehouses. The corporation offers several product lines that contain candy, snack foods, tobacco, alcoholic product and nonalcoholic beverages. Moreover, the company engulfs supplies used for cleaning and institutional supplies; it also offers Hardlines that include electronics, health and beauty aids, hardware, sporting goods, toys, and automotive supplies. The brands engulfed by the umbrella of food contain dry and institutionally packaged foods. In addition, the soft-lines of the company include jewelry, house wares, clothing and accessories, domestics, media, home furnishings, cameras and small appliances (Van Horne and John, 2008).

Current Issues Impacting Financial Statements of Wal-Mart

Wal-Mart signed a definitive agreement to acquire Kosmix on April 18, 2011, underscoring its commitment to social and mobile commerce. Terms of the transaction were not disclosed. Furthermore, Wal-Mart entered into a definitive agreement to acquire VUDU, Inc. on February 22, 2010, a provider of digital technologies and services that enable the delivery of entertainment content directly to broadband high-definition TVs and Blu-ray players. Terms of the transaction were not disclosed (Brigham and Michael, 2010).

Current Issues Impacting Financial Statements of Costco

Shareholders Costco approved an amendment to the Second Restated 2002 Stock Incentive Plan to increase by 8,000,000 the number of shares available to be granted under the plan on January 29, 2008 (Shim and Siegel, 2008). Costco announced its 2nd quarter earnings before market (tentative) on March 2, 2011. Furthermore, Costco announced its 1st quarter earnings before market on December 8, 2010.

Week 2 Vertical Analysis

Vertical Analysis of Wal-Mart

INCOME STATEMENT

2010

2009

2008

2007

2006

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Sales

100.00%

100.00%

100.00%

100.00%

100.00%

Less: COGS

75.22%

76.30%

76.50%

76.57%

76.94%

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G.P

24.78%

23.70%

23.50%

23.43%

23.06%

Other Op. Rev

5.91%

5.68%

5.87%

5.94%

5.93%

Less: Op Exp

19.65%

19.10%

18.77%

18.55%

18.16%

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Op Income

11.04%

10.28%

10.61%

10.82%

10.83%

Less: Interest Exp

0.07%

0.07%

0.06%

0.08%

0.08%

(no capitalized interest)

Other Inc (Expenses)

-0.47%

-0.47%

-0.48%

-0.44%

-0.38%

Unusual or Infreq. Item;

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IBT

10.51%

9.73%

10.06%

10.30%

10.37%

Less: Operation Taxes

5.45%

5.21%

5.39%

5.50%

5.56%

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N.I. before Min. Ern.

5.06%

4.52%

4.67%

4.81%

4.82%

Minority Share of Earnings (Loss)

0.00%

3.43%

3.55%

3.65%

3.70%

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N.I. before Nonrecurring Items

5.06%

7.95%

8.22%

8.46%

8.52%



Op. of Discontinued Segment;

Income (Loss)

-0.02%

0.04%

-0.04%

-0.26%

0.00%

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Net Income

5.06%

7.95%

8.22%

8.46%

8.52%

As it can be seen through vertical analysis of income statement of Wal-Mart, the net income is gradually declining over the past five years. However, the gross profit of the business has been good as it is showing gradual increase and consistent over the years.

BALANCE SHEET

2010

2009

2008

2007

2006

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ASSETS

CA:

Cash

5.57%

5.61%

4.41%

6.55%

6.42%

Mkt Securities

0.00%

0.00%

0.00%

0.00%

0.00%

G. Receivables

2.92%

3.01%

2.89%

2.52%

2.66%

Less: Allowance B/D

0.00%

0.00%

0.00%

0.00%

0.00%

Net Trade Rec

2.92%

3.01%

2.89%

2.52%

2.66%

Inv

23.35%

26.60%

27.85%

29.91%

32.20%

Prepaid Exp

2.10%

2.36%

2.52%

2.39%

2.56%

Other CA

0.10%

0.15%

0.00%

0.00%

0.00%

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Total CA

2.92%

3.01%

2.89%

2.52%

2.66%

L.T Assets:



Net Tangible Assets (other than construction in progress)

97.08%

96.99%

97.11%

97.48%

97.34%

Construction in ...