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The Company Analysis: Wal-Mart
Introduction
Wal-Mart is an American company that runs a chain of departmental stores. It is listed on the New York Stock Exchange (NYSE) and is the worlds largest corporation in terms of revenue base (Forbes, 2010). It has extended its operations to India, the United Kingdom, Mexico, and other parts of the world. The company has recorded improved business in the past few years with 51% of its revenue being realized on the grocery business in the US alone. This translates to $258 billion. The company still goes to record tremendous financial performance up to date (Weygandt, Kimmel, and Kiesso, 2008). The figures depicted in this report focus on the periods of January 2008 to 2010.
Current Asset base
According to the companys financial statements cited in Forbes (2010), the company has recorded a current asset base of 48,949,000,000 in 2009 and 48,331,000,000 in 2010. This amounted to a total of 97,280,000,000 in current assets for the periods of 2009 and 2010. The presentation of current assets should however be done in order of liquidity with the asset thats most easily translated into cash being the first to be posted in the financial statement. To most companies, the asset would be cash itself. Other current assets should follow in the same order including cash equivalents, accounts receivables, receivables, and other inventories in that order, depending on the nature of the company (Forbes, 2010).
The two biggest current assets the company recorded during the periods of 2009 and 2010 were cash and cash equivalents. In 2009, Wal-Mart recorded a cash base of 7,275,000,000 but the situation improved in 2010 with a cash base of 7,907,000,000. These two figures show an improvement from 2008 when the company recorded a current asset base of 5,569,000,000. This was the lowest record in the last four years.
Total Assets
During the periods of 2009 and 2010, the company recorded a total asset base of 334,135,000,000. This translated to a total asset base of 163,429,000,000 in 2009 and 170,706,000,000 in 2010. However, 2010 was the year the company recorded the highest figure of total assets in the recent four years. This was a summary of the total assets including fixed assets, noncurrent assets, and current assets (Forbes, 2010).
Accounts Payable
In 2009, the company recorded an accounts payable figure of 3,905,000,000 while in 2010, the figure was 4,144,000,000. This depicted a progressive pattern of accounts payables with lower figures posted in 2008 and 2007 (Forbes, 2010).
Current Liabilities
According to the companys 2009 balance sheet, current liabilities were 55,390,000. However, in 2010, the figure increased to 55,561,000,000. This was a sum of accounts payable, short-term debt, accrued liabilities, and other forms of current liabilities. The two biggest current liabilities were accounts payables, with figures of 28,849,000,000 and 30,451,000,000 posted in 2009 and 2010 respectively (Forbes, 2010).
Total Liabilities
In 2009, the company experienced a drop in total abilities as compared to 2008. The figures were 98,906,000,000 and 98,144,000,000 for 2009 and 2008 respectively. There was however an increase in total liabilities for the year 2010 with the company reporting a figure of 99,957,000,000 (Forbes, 2010).
Conclusion
Wal-Mart has in the past four years maintained a good position in its financial statements. With financial figures running into millions and billions of dollars, the company can able to effectively compensate for its running costs and still realize commendable profit levels (Weygandt, Kimmel, and Kiesso, 2008). Wal-Mart can therefore maintain its position as a formidable company of the 21st century.
References
Forbes. (2010). Wal Mart Stores Inc (Nyse: Wmt). Web.
Weygandt, J. J., Kimmel, P. D., & Kiesso, D. E. (2008). Financial Accounting. New York: John Wiley and Sons Inc.
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