Business Walmart

Business Walmart

Outline

  I. Analysis and interpretation of sales and profit figures

    a. Gross and net profit margin

    b. Operating profit margin

  II. Analysis and interpretation of financial ratios

    a. Return on Assets (ROA)

    b. Return on Equity (ROE)

    c. Earnings per share

    d. Dividend payout ratio

III. Conclusion

Wal-Mart and Tesco Incorporation

Analysis and interpretation of sales and profit figures

      Wal-Mart and Tesco operate within the retail industry. Wal-Mart Stores Incorporation has a number of retail stores under different formats which are distributed around the world. In the United States, Wal-Mart operates three main formats which include Sam’s Club, International and Wal-Mart US.   Since its inception, Wal-Mart has been committed towards saving the customers money (EBIT Financial Analysis Center. 2011, para. 4).

      Over the past few years, Wal-Mart and Tesco have been successful as a result of effective management. For example, Tesco has managed to maintain a relatively high sales revenue level (Tesco, 2010, 2010).   This has resulted from its effectiveness in formulating and implementing the pricing strategy. On the other hand, Wal-Mart has incorporated a low pricing strategy which enables it to attract a large number of customers.

      Their strategy to incorporate a broad assortment of consumer products has played a vital role in the firms’ effort to attract and retain its customers. However, as a result of the 2007 economic recession, the firms experienced a significant reduction in their sales level. The table below illustrates Wal-Mart’s growth in sales over the past five years.

Table 1: Wal-Mart’s and Tesco’s net sales

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|Year                                       |2010                     |2009                   |2008...