Walmart company profile: gross margin and earnings per share analysis 2014-2015

Overview
Incorporated in 1969, Walmart Inc. is today considered to be the world’s largest retailer. As the company points out on its website, its more than 10,000 stores spread across the world welcome 270 million members as well as customers every week (Walmart, 2018). Currently, the company has more than 2.3 million employees, whom it proudly refers to as associates. In essence, the retailer “operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, drugstores, and convenience stores; membership-only warehouse clubs; e-commerce Websites, and mobile commerce and voice-activated commerce applications” (Bloomberg, 2018).
Gross Margin and Earnings per Share
Gross Margin in 2014 and 2015
According to Heisinger (2009), “the gross profit margin ratio indicates the gross margin generated for each dollar in net sales and is calculated as gross margin (which is net sales – cost of goods sold) divided by net sales” (634).
The gross margin for 2014;
Net sales – cost of goods sold
$476,294 – $358,000 = $118,225
Gross margin ratio for 2014;
Gross margin/net sales
$118,225/$476,294 = 0.25
The gross margin for 2015;
Net sales – cost of goods sold
$485,651 – $365,086 = $120,565
Gross margin ratio for 2015;
Gross margin/net sales
$120,565/$485,651 = 0.25
NB: all dollar figures are in millions
As can be seen above, the gross margin increased by 1.98% within the period under consideration. The gross margin ratio for the two years under consideration, on the other hand, indicates that after factoring in the cost of goods sold, Walmart still has a good proportion of funds remaining from net sales.
Earnings per Share for 2014 and 2015
Earnings per share, as Heisinger (2009) points out, “indicates how much net income was earned for each share of common stock outstanding” (636). For the year 2014 and 2015, Walmart’s EPS was $4.88 and $5.05 respectively (Morning Star, 2018). Essentially, were the company to distribute all of its profits, this is the amount that would be allocated to each of Walmart’s share. The increase is indicative of better profitability in 2015, as compared to 2014.
References
Bloomberg (2018). Company Overview of Walmart Inc. Retrieved from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=313055
Heisinger, K. (2009). Essentials of Managerial Accounting. Mason, OH: Cengage Learning.
Morning Star (2018). Walmart Inc. WMT. Retrieved from http://financials.morningstar.com/ratios/r.html?t=WMT®ion=usa&culture=en-US
Walmart (2018). About Us. Retrieved from https://corporate.walmart.com/our-story