Walmart Financial Analysis
The industry average was not available through Reuters, stock analysis online, or any other database. Although, when thinking about their debt ratio in the past it seems to be a on the high side. Historically, Walmart has always had a debt ratio higher than the industry average. Walmart does not show very good strengths when it comes to debt management.
When looking at a companies profitability there are many ratios that need to be analyzed. Also, there are two groups of measures within the profitability which are the returns and the margins. These ratios include basic earning power, return on common equity, operating profit margin, return on total assets, gross profit margin, and net profit margin. Each of these ratios have something in common when referring to Walmart and that is that they are all drastically different in a positive sense. For instance, net profit margin, which indicates how much profit a company makes for every dollar it generates in revenue or sales, is 4.06 for Walmart in 2011(Stock-analysis). This is greatly different from the industry average and the range of comparability, once again in a negative way. The range of comparability is 4.008 to 6.012, Walmart's net profit margin falls just short of the range of comparability(Appendix B). Walmart has lower than normal profitability measures which could be due to lack of control over the expenses.
Market Based Measures Market based measures are a