Wal-Mart: Using Investments To One's Advantage Return Term Paper

Wal-Mart: Using Investments to One's Advantage

Return on Assets & Return on Equity

A return on assets (ROA) ratio is a way for a company to recognize how profitable it is in accordance with its total assets. This formula allows for the company to observe how efficient their management team is at using its assets in a way that will generate more generous earnings for the company and the shareholders. The formula, a favorite to investors, can easily be determined by taking the company's net income and dividing it by its total assets (Crosson, et al., 2008).

The return on equity (ROE) ratio is the amount of net income that is returned as a percentage of the shareholders' equity (Loth, 2011). This formula, also a favorite to investors, measures a company's ability to be profitable by showing how much money the company is able to generate with shareholder investments (Loth, 2011).

Why ROA & ROE are Significant to Wal-Mart

As a publicly traded company, Wal-Mart should be concerned about their ROA and ROE ratios for a variety of different reasons. First, these ratios allow the company to evaluate their performance on a yearly basis. The ratios are able to advise Wal-Mart's management team as to what functions of the business operations are functioning in ways that benefit the company, and which...

...

Secondly, Wal-Mart is able to compare themselves with other businesses within their industry to observe if they are successfully or if they should seek improvement. Because these are two ratios that educated investors seek to know, Wal-Mart will want to make sure it is able to compete within their industry.
3.0 Wal-Mart's Investments

One of Wal-Mart's most current investments has been the expansion to Argentina. Wal-Mart intends on opening over ten new stores in the country. This will create nearly 2,000 jobs for Argentineans, and at the same time it will create a new source of income for Wal-Mart Corporation. While the company has not seen a large return on this investment, it predicts a great return in its future. Once the Argentinean Wal-Marts are able to make profits, the company intends on being just as successful in Argentina as it is in other South American countries.

4.0 Personal Investments

Personally, I invest by using the concept of spreading savings into different types of investments. As a young person, I understand that I have a great deal of time before I retire, and therefore, I have a fair amount of time to invest in more risky investments. However, because of my personal investment style, I wish to remain as least risky as possible…

Sources Used in Documents:

References

Crosson, S.V., Needles, B.E. Jr., Needles, B.E., Powers, M. (2008). Principles of accounting.

Boston: Houghton Mifflin. p. 209.

Loth, R. (2011). Profitability indicator ratios: Return on equity. Retrieved March 27, 2011 from http://www.investopedia.com/university/ratios/profitability-indicator/ratio4.asp

Walmart.com. (2011). Walmart announces investments in Argentina for over 100 million dollars
in 2009. Retrieved March 27, 2011 from http://walmartstores.com/pressroom/news/8514.aspx


Cite this Document:

"Wal-Mart Using Investments To One's Advantage Return" (2011, March 28) Retrieved April 24, 2024, from
https://www.paperdue.com/essay/wal-mart-using-investments-to-one-advantage-120424

"Wal-Mart Using Investments To One's Advantage Return" 28 March 2011. Web.24 April. 2024. <
https://www.paperdue.com/essay/wal-mart-using-investments-to-one-advantage-120424>

"Wal-Mart Using Investments To One's Advantage Return", 28 March 2011, Accessed.24 April. 2024,
https://www.paperdue.com/essay/wal-mart-using-investments-to-one-advantage-120424

Related Documents

41 in the next three years. The current price for Wal-Mart implies strong growth prospects. The company does have a sound strategy to retain its new customers and refocus growth efforts on less-saturated markets overseas. In short, while there can be little doubt as to Wal-Mart's operational excellence, it is not necessarily a great investment. Growth has in recent years been of the slow and steady variety. The company's present valuation

Corporate Mission As the largest mass merchandiser in the world, Wal-Mart's work in supply chain execution, research, and policies defines best practices for the broader high volume retailing industry worldwide. Wal-Mart is comprised of three operating segments including the Wal-Mart stores, Sam's Club and the International Stores. The typical Wal-Mart discount store as 50 departments or more and a few are offering groceries in addition to apparel, fabrics, stationery and books,

The Price-Sensitive Affluents, Wal-Mart has learned (Wal-Mart Annual Reports) is more interested in finding an exceptionally good deal and not necessarily concerned about the shopping experience. This is particularly true as one of the strongest factors influencing the execution of their strategy, the emerging global recession during this timeframe, takes hold. Again as with the Price Value Shopper and the paradoxical purchasing patterns of the Brand Aspirational segment show,

Wal-Mart Corporation Mission and Vision Statement Analysis Linking Wal-Mart's Mission and Vision to Their Strategic Goals ands Objectives Assessing the Link Between Wal-Mart's Financial Performance And Its Strategic Goals Wal-Mart Competitive and Marketing Analysis Wal-Mart Marketing Analysis Selecting An Appropriate Strategy (low cost, differentiation or niche) For Maximizing Organization's Return on Shareholders Potential Wal-Mart Merger & Acquisition Strategy Incentive and Reward Strategies for Wal-Mart Employees Evaluating How Current Strategies Define Ethicacy Levels at Wal-Mart Wal-Mart Ratio Analysis Income Statement Analysis,

Wal-Mart's SWOT Analysis and Generic Business-Level Strategy Walmart's SWOT Analysis Wal-Mart's SWOT Analysis and Generic Business-Level Strategy Wal-Mart's SWOT Analysis and Generic Business-Level Strategy Wal-Mart Wal-Mart is the world's leading corporation in the retail industry. It operates in 27 countries of the world with 69 well-recognized brands. With this huge scale of operations and vast business network, Wal-Mart serves a large number of customers with numerous product categories in its retail stores, departmental stores, and

Robson Walton - Chairman of the Board of Directors of Wal-Mart Stores, Inc. Stephen P. Whaley - Senior Vice President and Controller Eric S. Zorn - Executive Vice President and President, Wal-Mart Realty III. INTERNAL ENVIRONMENT: STRENGHTS and WEAKNESSES A. CORPORATE STRUCTURE Wal-Mart's retail division is formed from four major subsidiaries: Wal-Mart Discount Stores, Wal-Mart Supercenters, Wal-Mart Neighborhood Markets and Sam's Clubs. (Wal-Mart Facts, 2007) Wal-Mart Discount Stores more than 1,000 in U.S. alone average