Wal-Mart

Background Information

Ш Wal-Mart Inc.

Corporate Headquarters

* 702 Southwest 8th street

Bentonville, Ar 72716-8001

Top Executives

* President and CEO: H. Lee Scott

* Chairman of the Board: S. Robson Walton

* Chairman, Executive Committee of the Board: David D. Glass

* Chief Financial officer & Executive Vice President: Thomas M. Schoewe

Industry

* General Merchandise, SIC code: 5399

Divisions

* Wal-mart stores

* Sam's Club

* International

Major Products

* Hardware

* House-wares

* Auto Supplies

* Small Appliances

* Domestics

* Grocery

* Candy

* Tobacco

* Pharmaceuticals

* Electronics

* Health & Beauty Aids

* Sporting Goods

* Toys

* Stationary

* Jewelry

* Shoes

* 1-hour Photo

Major Competitors

* Target

* Sears Roebuck & Co.

* Kmart

* Costco Wholesale

Most Successful Wal-mart Brands

* Ol' Roy

* Great ValueТ

* EquateТ

Financial Analysis

Ш Profitability

Wal-mart experienced sales growth of 20% in the fiscal year of 2000. This impressive increase is a direct result of the companies expansion program. Wal-mart has also acquired a few international stores, which are doing very well and adding to the companies' profit. As the table shows wal-mart is no stranger to climbing profits, in fact wal-mart has managed to increase sales by no less than 12% (typically more) each year for 11 consecutive years.

Year Net Earnings Net Sales Profitability

2000 $5,377 $165,013 0.0326

1999 $4,430 $137,634 0.0322

1998 $3,526 $117,958 0.0299

1997 $3,056 $104,859 0.0291

1996 $2,740 $93,627 0.0293

Ш Analysis

Ш Liquidity

Wal-marts' liquidity has been decreasing since 1996, which is a good sign from a growing company.

In 2000 wal-marts liquidity dropped off drastically, this is on account of their expansion projects. They are willing to take some short-term risks, because they are very confident it will pay off down the road. A lot of wal-marts' money is being pumped into the super centers and also financing the over seas expansion.

Year Current Assets Short-term Debt Liquidity

2000 $24,356 $25,803 0.9439

1999 $21,132 $16,762 1.2607

1998 $19,352 $14,460 1.3383

1997 $17,331 $11,454 1.5131

1996 $15,338 $9,973 1.5380

Ш Analysis

Ш Capital Management

To say wal-mart is healthy is an under statement, thriving is a bit more fitting. The company has plenty of assets to cover their overall debt. Wal-mart continues to widen the gap between total assets and overall debt, the companies leverage has been increasing for 5 years running. By keeping their assets high and debt low wal-mart is assuring increased profits and happy shareholders for years to come.

Year Total Assets Overall Debt Leverage

2000 $70,349 $25,803 2.7264

1999 $49,996 $16,762 2.9827

1998 $45,384 $14,460 3.1386

1997 $37,541 $11,454 3.2775

1996 $32,819 $9,973 3.2908

Ш Analysis

Ш Asset Management

Once again wal-mart demonstrates why it is looked at as the 5th most admired company in the United States. Wal-marts' inventory ratio has been on the rise for at least five years. As wal-mart grows and gains experience it creates a very strong base for it self. It is one of the few companies today that actually learns from and builds on its mistakes.

Year Cost of goods Sold Total Inventory Inventory Turnover

2000 $129,664 $19,973 6.4920

1999 $108,725 $17,076 6.3671

1998 $93,438 $16,497 5.6639

1997 $83,510