Walmart vs Target Financial Analysis - 5129 Words

FINANCIAL ACCOUNTING REPORT – TEAM 8 CASE ANALYSIS OF WAL-MART INC AND TARGET CORPORATION SUBMITTED BY: Amaresh Chandra Panda K H Gupta Mehul Shah SNDS Ramanish Sadhu Upasana Patra Table of Contents EXECUTIVE SUMMARY ....................................................................................................................... 2 RATIO ANALYSIS ................................................................................................................................ 2 PROFITABILITY RATIOS....................................................................................................................... 2 NET MARGIN†¦show more content†¦RATIO ANALYSIS PROFITABILITY RATIOS NET MARGIN Net Margin is the ratio of net profits to revenues of a company. It is used as an indicator of a company’s ability to control its costs and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to company with individual industries having typically expected ranges given similar constraints within the industry. For example, a retail company might be expected to have low net margins while a technology company could generate margins of 15-20% or more. Companies that increase their net margins over time generally see their share price rise over time as well as the company is increasing the rate at which it turns dollars earned into profits. 2 A snapshot of the Net Margins for Wal-Mart Stores Inc. is shown below: Net Margin Wal-Mart 2010 3.90% 2011 3.50% 2012 3.60% Table 1 - Net Margins for Wal-Mart Inc. Wal-Mart Stores Inc.s net profit margin deteriorated marginally from 2010 to 2011 but then slightly improved from 2011 to 2012. Net Margin Wal-Mart Target Industry Average 2010 3.90% 4.30% N.A 2011 3.50% 4.20% N.A 2012 3.60% 4.10% 3.3% Table 2 - Net Margins for Wal-Mart Inc. and Target Corp. The Net Margin’s for Target Corp. has alsoShow MoreRelatedCourse Projec Essay example1354 Words   |  6 PagesACCT504 Professor Morrison Target vs. Walmart ACCT504 Professor Morrison Measuring Ability to Pay Current Liabilities: Target and Walmarts current ratio have a .03 different meaning that both comapnies have a high chance of paying off their debts if they need arises. Measuring Turnover: Walmart has the advantage for the inventory turnover and accounts receivable turnover ratios. Walmart turns over their inventory 10.1 times to Targets 6.1 times and Walmart turns over their accountsRead MoreWalmart: A Strategic Management Case study Financial Perspective959 Words   |  4 Pagesdepartment stores of the likes of Target and Kmart. Costco offers competition to Sam Club format of Wal-Mart. In niche small markets, dollar stores are offering strong competition to Wal-Mart. Kroger competes with Neighbor market and supercenters of Wal-Mart especially on the grocery product line. Target competes with Discount stores and supercenter shopping formats of Wal-Mart with Target commanding a small premium on prices as it follows fashion trend. Market segment of Target is the high-income customersRead MoreFinancial Statements Of Target And Walmart2905 Words   |  12 Pages The Financial Statement Analysis Srikanth Gurram University Of Colorado Denver Abstract This report is to compare the financial statements of Target and Walmart for last three years and analyze its financial performance. The data has been downloaded from www.sec.gov for analysis. This report initially compares the financial healthiness of both firms based on the financial ratios and then discusses the factors that could have impacted these firms’ finances in last three years. This reportRead MoreCostco Vs. Competitors And The Past Performance1009 Words   |  5 Pagesof revenue and net income (Exhibit 3) of Costco with Kroger, Target and Walmart, Costco has impressive growth rate of 3.7%- revenue and 15.56% of net income, where as the biggest competitor Walmart has growth of 1.07% - revenue and (-2.28%) of net income growth. ORGANIZATIONAL ANALYSIS Financial Analysis Analyzing the competitive landscape is critical to assess the overall standing for Costco relative to its peers. However, a financial evaluation is essential for the investment purpose. A glanceRead MoreInternational Business Strategies : Porter s Diamond Model1391 Words   |  6 Pagesthe USA’s, Walmart. The main objective is to discuss the model to determine if it is of any use in terms of explaining home and host location strategies. Porter quotes â€Å"A nation’s competitiveness depends on the capacity of its industry to innovate ad upgrade†¦ In a world of increasingly global competition, nations have become more, not less, important† (Porter, 73). Porters model, or sometimes to referred to as Diamond Model, is a strategy that companies are able to utilise for an analysis of theirRead MoreSwot Analysis : Target Corporation Essay1745 Words   |  7 PagesTarget Corporation is known worldwide as a large retail chain that brings in millions of dollars each fiscal year. The ability to remain competitive in a saturated industry could prove difficult to some retailers, but Target remains one of the leaders in the retail market. With success comes risk. Target Corporation competes against online retailers as well as â€Å"big box† stores to remain competitive. As Target Corporation is evaluated, one must observe market analysis, the current situation of theRead MoreTechnology and Its Impact on Retail Stores2008 Words   |  9 Pagesrequired a lot of people, processing large amounts of data, and requiring lengthy delays in the results from weeks to even months. In the end, by the time the data was of any use it would have bee n out dated. In today’s markets, such retailer’s like Target rely on technology. With the current economy, and the number of business being forced to file for bankruptcy and ultimately closing their doors forever, now more the ever businesses need to gain a competitive advantage over their competition. TechnologyRead MoreWal-Mart Internationalization15922 Words   |  64 PagesTable of Contents INTRODUCTION 2 COMPANY HISTORY AND BACKGROUND 4 Organizational Culture 5 International Penetration 6 INDUSTRY DESCRIPTION 9 Industry Analysis 9 Table 1: TED Spread (2005-2010) 11 Table 2: VIX (2005-2010) 12 Table 3: FCI (2005-2010) 12 Size of the U.S. Retail Market 13 Table 4: SP Retail Index (2005-2010) 14 Table 5: U.S. Retail Sales (2005-2010) 14 Structure of the U.S. Retail Market 15 Table 6: U.S. Retail SalesRead MoreStudy2862 Words   |  12 PagesMarketing Mix Marketing: the process of conceiving ideas, products and services which are attractive to customers. Goal is to avoid pure competition Target market: group of likely consumers for product and service. Attract them with good marketing mix Marketing mix: shaping the combination of the product and approach to maximize customer value Predict tastes and preferences Attempt to understand human behavior- perception shape behavior, learned behavior over time creates expectations Read MoreSwot Analysis : Whole Foods Market1618 Words   |  7 Pagesof the research and information originates from the company’s 2014 annual report. The Form10-K, reputable internet sources and the Whole Foods Market company website provided the data and information to establish a complete SWOT analysis. The research and SWOT analysis has been used to recommend a strategy for growth and sustainability of Whole Foods Market. Company Background Whole Foods Market is a leading retailer of natural and organic foods. The company was created through a merger