Melissa S Andersen

Case Study: Financial Statements for Walmart Stores Inc. and Macy’s Inc.

Comparison of financial matrices of Walmart and Macy’s

WALMART METRICS MACY’S

21.72% RATE OF EQUITY (ROE) 24.55%
9.46% RATE OF ASSETS (ROA) 8.28%
12.26% RATE OF FINANCIAL LEVERAGE 16.27%
5.96% ACCOUNTS PAYABLE TURNOVER 3.38%
2.77% PROFIT MARGIN 4.36%
2.31% ASSET TURNOVER 1.33%
69.32% ACCOUNTS RECEIVABLE TURNOVER 75.29%
.75% COLLECTING MONEY FROM SALES (WEEKS) .69%
8.05% INVENTORY TURNOVER 3.15%
6.46% INVENTORY SAT WITH FIRM (WEEKS) 16.51%
4.02% PROPERTY, PLANT, AND EQUIPMENT TURNOVER 3.41%
-1.52% CASH TO CASH CYCLE (WEEKS) 1.82%

Walmart performs better on:

 Rate of assets: Walmart’s management is more efficient at using it’s assets to generate earnings
than Macy’s.
 Asset Turnover: Having higher Inventory turnover, and property, plant, and equipment turnover,
Walmart therefore has better Asset turnover.
 Inventory Turnover: Walmart’s Inventory Turnover is higher than Macy’s implying that Walmart
has better inventory management as well.
 Cash to Cash cycle: Walmart has more time to collect money from sales before paying suppliers
then Macy’s. The information and sourcing drivers help a firm to perform better, increase
efficiency, improve responsiveness, and reduce cost of firm.
 Property, Plant, and Equipment Turnover: Walmart in PPET and C2C. Facilities play a crucial role
in that Walmart needs less storage space compared to Macy

Macy’s performs better on:

 Rate of Equity: In the view of the shareholder, Macy’s has more return of investment by
shareholder equity than Walmart does.
 Rate of Financial Leverage: Macy’s out performance in ROE and ROA create this.
 Profit Margin: because Macy’s has a lower asset turnover, return of assets, and return of equity
than Walmart, they are more profitable.
 Accounts Receivable Turnover: Macy’s can collect more quickly than Walmart
 Accounts Payable Turnover: Macy’s has better accounts payable turnover than Walmart. Profit
Margin, accounts receivable turnover, accounts payable turnover are transportation cost and
cost of goods.