Financial Analysis

Wal-Marts current ratio increased from 0.81:1 in 2008 to 0.88:1 in 2009 while their
quick ratio also increased from 0.16:1 in 2008 to 0.20:1 in 2009. This indicates that the company
has enough liquid assets to pay its short term debts and obligations.
Wal-Mart inventory turnover increased from 8.32 in 2008 to 8.79 in 2009, thus the
company improved in their inventory management. Inventory days became shorter signifying
quick replacement and sale of stocks.
Accounts receivable turnover decreased from 116.66 in 2008 to 107.47 in 2009 which
resulted from credit issued to the customers ; the companys average collection period increased
from 3.13days to 3.40 days which signals inefficient management of receivables.
The companys fixed asset turnover increased from 4.23 in 2008 to 4.35 in 2009 showing
that an increase in fixed asset investment resulted to a certain increase in sales. The total asset
turnover elevated from 2.41 in 2008 to 2.48 in 2009 which resulted from high level of capital
investment relative to sales volume.

The companys leverage ratios shows that its debt to total asset ratio decreased from
60.50% to 60%. It means that the companys obligations to its creditor diminished for the
following year. Also, its debt to equity decreased by .03% during 2009 and it shows that
resources provided by the creditor to company also reduced. The long term debt-to-equity
escalated from 62.57% to 65.49 during the cumulative year 2008-2009 and it indicated that Walmarts long term debt increased by 2.92%. Time interest earned ratio increased from 0.24%
which shows that the company has more capability to pay its annual fixed interest charges.
Wal-Marts profitability ratios resulted in increased in its Operating Margin from 5.36%
in 2008 to 5.68% in 2009 this shows that the company is making enough money from its ongoing
operations to pay its variable cost and its fixed cost. It indicates how they effectively manage
cost and leverage expenses. Net profit margin decreased from 3.40% in 2008 to 3.34% in 2009 as
a result of regression.
The return on total asset (ROA) decreased from 8.5% in 2008 to 8.4% in 2009 ,this
measures the overall asset profitability, so Wal-mart wasnt able to maintain the effectiveness of
their asset management. The return on investment (ROI) also decreases by .3%. The increased in
investment became more significant than the increased in net profit. the return on equity for 2009
is 21.2%.
The increase in net sales for the year 2009 is lower than that of 2008 resulting to a
decrease in net income margin. However, the earnings per share and the dividend per share of the
company increases in 2009.