In: Accounting
Discussed and synthesized what the ratios tell you immediately
about the company and its top competitor. Discussed and synthesized
some potential long term problems with the information received
from the ratios for the company and the top competitor.
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Walmart's Key Financial Ratios and Statistics FYE: 1/31
Profitability | 2018 | Leverage | 2018 |
Net Inc/Comm Equity | 3.35 | Total Liab/Total Assets | 0.62 |
Net Inc/Total Assets | 0.05 | Total Liab/Inv Cap | 1.09 |
Net Inc/Inv Cap | 0.08 | Total Liab/Comm Equity | 43.04 |
Pretax Inc/Net Sales | 0.03 | Interest Coverage Ratio | 7.49 |
Net Inc/Net Sales | 0.02 | Curr Debt/Equity | 0.12 |
Cash Flow/Net Sales | 0.06 | LTD/Equity | 0.47 |
SG&A/NetSales | 0.21 | Total Debt/Equity | 0.60 |
Asset Utilization | Liquidity | ||
Net Receivables Turnover | 87.40 | Quick Ratio | 0.20 |
Inventory Turnover | 8.60 | Current Ratio | 0.76 |
Inventory Day Sales | 0.02 | Net Rec/Curr Assets | 0.09 |
Net Sales/Work Cap | -26.53 | Inv/Curr Assets | 0.73 |
Net Sales/PP&E | 4.36 |
1.Walmart has Higher Net Inc/Comm equity ratio, it means Walmart
is using it's equity very well which is good for long term
purpose.
2. Walmart has Higher Net Inc/Total asset ratio, it means Walmart
is using it's Assets properly.
3.Both company has same ratio of Pre Tax Inc/Net Sales.
4.Walmart has higher ratio of Net receivale turnover however Amazon
has very low which is not good for long term purpose. Amazon is not
utilizing it's Assets properly.
5.In case of Net sales/Waork cap ratio Walamrt is in negative
whereas Amazon has much better ratio ie.76.87% which is too
good.
5.Walmart has lower ratio of Total liab/Total assets which is good.
they have higher asset value & lower liability. In this case
Amazon has to maintain it's ratio. this ratio means lower is
better.
6.In case of Interest coverage ratio higer means company is too
safe. they are more capable of paying it's liablility.
Walmart has higher Interest coverage ratio which means they are
more safe than Amazon.
7.Amazon has higher quick ratio means they are more able to convert
asset in Lliquid term which means they are in a good
position.
8.In case of Inventory/Current asset Walmart has higher ratio than
Amazon, it means Walmart has block their money in Inventory more
than Amazon.
9.In case of current raio Amazon has higher ratio than Walmart, it
means Amazon is much safe than Walmart.
Current ratio should be 2:1 as per standard. if it is lower than 1
it means company is in problem.
10.In case of Long term debt/Equity Walmart has more share of equit
than debt ehich means shareholders are more realiable on Walmart.
whereas in Amazon Long term debt has more than equity ehich means
shareholders are lesser reliable on this company, Amazon hae more
liability to pay interest which is not good indication for long
term perspective.