Question

Compare and contrast Walmart ratios with the industry ratios. following the table below.

Ratios	Walmart (2019)	Industry (2019)
Current Ratio	0.8	1.10
Debt to Equity Ratio	0.97	1.54
Return on Assets	2.33	5.41
Return on Equity	7.04	15.70
Inventory Turnover	8.7	18
Asset Turnover	2.33	65

Answer 1

1]	Liquidity:
	The liquidity ratio of Walmart is much lower than the industry average,
	which indicates that the liquidity position of Walmart is less than
	satisfactory. Walmart should be facing serious liquidity problems.
2]	Asset management:
	The inventory turnover and the asset turnover ratios are very low when
	compared to the industry ratios. It is indicative of poor asset
	management; that is poor utilization of assets. Poor management of
	assets would lead to poor operating results.
3]	Debt equity rate is lower indicating that the debt proportion in capital
	is lower. It will have the effect of lowering the ROE.
4]	The return on assets is very low when compared to the industry. It
	reflects the lower profitability and lower asset utilization achieved.
5]	ROE:
	The ROE of Walmart is less than half of the industry, which is due to
	lower return on assets and lower debt equity rate [leverage].
	CONCLUSION:
	Walmarts asset management, liquidity and profitability are significantly
	lower than that of the industry, which is a reflection of its poor
	asset management and inefficient operational performance.