Question

Examine WALMART cash flow statement for the most recent year only (e.g.: 2017). Analyze whether the cash flow is “healthy” or not.

Answer 1

Analysis of Cash flow Statement of WALMART
Financial Year 2017

The cash flow statement (consolidated) of WALMART presents the following figures:

• Opening Cash and Cash Equivalents: $8705 million
• Closing Cash and Cash Equivalents: $6,867 million
• Cash flow from Operating Activities: $31,530 million
• Cash flow from Investing Activities: $(13,987) million
• Cash flow from Financing Activities: $(18,929) million

Although a plain looking at the financial statements show a decrease of $1,838 million of cash and cash equivalents during the year, it is not a bad sign. The company has generated a cash surplus of $31,530 million from its core business activities (operating activities) which is quite impressive. The WALMART group has generated cash which is enough to cover substantial cash needs for investment and settlement of long-term liabilities without the need for depleting the existing cash reserves to a dangerously low level or without the need to raise the finance from external sources. The company has also paid a cash dividend of $6,216 million which is also a healthy sign which depicts the sufficiency of cash available.

Overall, the cash flows are healthy for WALMART group during the financial year 2017.