Walmart Financial Analysis: Five-Year Performance Review
This paper presents a comprehensive financial analysis of Walmart Stores Inc. using five years of financial data spanning 2007 to 2011. The analysis covers net sales growth, key profitability ratios including return on equity and return on assets, and cash flow performance across operating, investing, and financing activities. The paper also examines how the 2008–2009 global financial crisis affected Walmart's performance and how the company recovered. Additionally, Walmart's competitive position relative to Target, Costco, and BJ's Wholesale Club is assessed through comparative financial metrics, concluding with a projection of sustained long-term growth.
- Introduction and Company Overview: Walmart background, scale, and report objectives
- Five-Year Net Sales Performance: Net sales growth and percentage trends 2007–2011
- Ratio Analysis and Profitability: ROE, ROA, margins, and liquidity ratios analyzed
- Cash Flow Analysis: Operating, investing, and financing cash flows reviewed
- Competitive Comparison: Walmart benchmarked against Target, Costco, and BJ's
- Conclusion: Summary of findings and long-term growth projection
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What makes this paper effective
- Grounds every analytical claim in specific numerical data drawn from Walmart's annual reports, making the argument concrete and verifiable.
- Uses a logical progression from internal performance (sales, ratios, cash flow) to external benchmarking (competitor comparison), giving the analysis both depth and breadth.
- Contextualizes Walmart's financial dip during 2008–2009 within the broader macroeconomic environment of the global financial crisis, demonstrating awareness of external factors.
Key academic technique demonstrated
The paper demonstrates effective use of financial ratio analysis as an evaluative framework. By calculating and presenting metrics such as ROE, ROA, gross profit margin, and debt-to-equity ratio across multiple years, the author moves beyond simple revenue reporting to assess the quality and sustainability of Walmart's financial performance over time.
Structure breakdown
The paper opens with a brief company overview and states its analytical objective. It then presents tabular five-year sales data before drilling into ratio analysis and cash flow performance. A dedicated section benchmarks Walmart against its top three retail competitors using side-by-side metrics. The paper closes with a short conclusion summarizing findings and offering a growth projection. Tables and figures are cited throughout to support each analytical point.
Introduction and Company Overview
Walmart Stores Inc. is a multinational retail corporation rebranded as Walmart in 2008. Founded in 1962, Walmart has grown into one of the largest American corporations, operating a vast chain of retail stores. The company sells a wide variety of consumer goods including electronics, toys, automotive products, furniture, and video games, among many others. Walmart serves approximately 200 million customers per week and recorded net sales of $419 billion at the end of fiscal year 2011. By 2012, the company was operating in 27 countries and recorded $443 billion in sales (Walmart Annual Report).
The objective of this report is to provide a financial analysis of Walmart using the last five years of financial data to evaluate the company's overall performance.
Five-Year Net Sales Performance
The analysis uses a five-year financial summary to evaluate Walmart's performance from 2007 to 2011. The data in Table 1 reveals that Walmart recorded healthy financial results throughout this period. Net sales grew from $344 billion in 2007 to $418 billion in 2011, representing an increase of more than 21% over the five-year span.
Despite this absolute growth in sales, the percentage rate of net sales increase declined over the same period. In 2007, Walmart recorded an 11.6% increase in net sales; by 2011, that figure had fallen to 3.4% (see Table 1 and Fig. 1). The primary driver of this slowdown was the global financial crisis, which adversely affected many large companies in the United States and Europe. Many corporations experienced declining sales between 2008 and 2009 as a direct consequence of the global financial downturn.
Table 1: Walmart Net Sales, 2007–2011 (USD$ Million)
Net sales: $344,759 (2007) | $373,821 (2008) | $401,087 (2009) | $405,132 (2010) | $418,952 (2011)
% Net sales increase: 11.6% (2007) | 8.4% (2008) | 7.3% (2009) | 1.0% (2010) | 3.4% (2011)
Gross profit margin: 23.4% (2007) | 24.0% (2008) | 24.2% (2009) | 24.9% (2010) | 24.7% (2011)
Total assets: $151,274M (2007) | $163,200M (2008) | $163,096M (2009) | $170,407M (2010) | $180,663M (2011)
Source: Walmart Annual Report 2011.
Works Cited
Annual Report. Walmart Annual Report. Walmart Stores Inc., 2011.
Stock Analysis. "Walmart Stores Inc. (WMT) | Statement of Cash Flows." Stock Analysis Net, 2011.
Yahoo Finance. "Walmart Stores, Inc. Common Stock (WMT)." Yahoo Inc., 2012.
Zenith Management Consulting. Case Study: How to Exploit Walmart's Weakness. Zenith Management Consulting White Paper, 2006.
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