Profitability Walmart\'s Key Financial Ratios and Statistics FYE: 1/31 Discussed

Question

Profitability

Walmart's Key Financial Ratios and Statistics FYE: 1/31

Discussed and synthesized what the ratios tell you immediately about the company and its top competitor. Discussed and synthesized some potential long term problems with the information received from the ratios for the company and the top competitor. Amazon's Key Financial Ratios and Statistics   FYE: 12/31

Profitability

2017 Leverage 2017 Net Inc/Comm Equity 0.16 Total Liab/Total Assets 0.79 Net Inc/Total Assets 0.02 Total Liab/Inv Cap 1.41 Net Inc/Inv Cap 0.04 Total Liab/Comm Equity 5.30 Pretax Inc/Net Sales 0.02 Interest Coverage Ratio 5.49 Net Inc/Net Sales 0.02 Curr Debt/Equity NA Cash Flow/Net Sales 0.10 LTD/Equity 0.89 SG&A/NetSales 0.35 Total Debt/Equity 0.89 Asset Utilization Liquidity Net Receivables Turnover 16.54 Quick Ratio 0.76 Inventory Turnover 8.14 Current Ratio 1.04 Inventory Day Sales 0.02 Net Rec/Curr Assets 0.22 Net Sales/Work Cap 76.87 Inv/Curr Assets 0.27 Net Sales/PP&E 3.64

Explanation / Answer

1.Walmart has Higher Net Inc/Comm equity ratio, it means Walmart is using it's equity very well which is good for long term purpose.
2. Walmart has Higher Net Inc/Total asset ratio, it means Walmart is using it's Assets properly.
3.Both company has same ratio of Pre Tax Inc/Net Sales.
4.Walmart has higher ratio of Net receivale turnover however Amazon has very low which is not good for long term purpose. Amazon is not utilizing it's Assets properly.
5.In case of Net sales/Waork cap ratio Walamrt is in negative whereas Amazon has much better ratio ie.76.87% which is too good.
5.Walmart has lower ratio of Total liab/Total assets which is good. they have higher asset value & lower liability. In this case Amazon has to maintain it's ratio. this ratio means lower is better.
6.In case of Interest coverage ratio higer means company is too safe. they are more capable of paying it's liablility.
Walmart has higher Interest coverage ratio which means they are more safe than Amazon.
7.Amazon has higher quick ratio means they are more able to convert asset in Lliquid term which means they are in a good position.
8.In case of Inventory/Current asset Walmart has higher ratio than Amazon, it means Walmart has block their money in Inventory more than Amazon.
9.In case of current raio Amazon has higher ratio than Walmart, it means Amazon is much safe than Walmart.
Current ratio should be 2:1 as per standard. if it is lower than 1 it means company is in problem.
10.In case of Long term debt/Equity Walmart has more share of equit than debt ehich means shareholders are more realiable on Walmart. whereas in Amazon Long term debt has more than equity ehich means shareholders are lesser reliable on this company, Amazon hae more liability to pay interest which is not good indication for long term perspective.

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