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WAL-MART

CORPORATION
NICK BISPLINGHOFF, PARKER DUNSHEE, EDITH PAGE, CARLY
SMITH

MERCHANDISING BUSINESS
Wal-Mart is a merchandising business, like our
competitor, Target
Worlds Largest Retailer
4,900 stores in the U.S.
It provides a one stop shop for households of all incomes
Price matching policy

COMPETITOR
Target
Merchandising Company on a smaller scale
1,800 stores in the U.S.
Typically higher prices
Designer brands

Inventory Turnover
Wal-Mart
2014
Cost of Merchandise Sold

Average Inventory

Inventory Turnover

Average Inventory
Average Daily Cost of
Merchandise Sold
Number of Days Sales in
Inventory

Target

2013

2014

2013

$ 358,069.00

$ 352,297.00

$ 51,160.00

$ 50,568.00

$ 44,330.50

$ 42,258.50

$ 8,334.50

$ 7,910.50

8.08

8.34

6.14

6.39

$ 44,330.50

$ 42,258.50

$ 8,334.50

$ 7,910.50

$ 981.01

$ 965.20

$ 140.16

$ 138.54

45.19

43.78

59.46

57.10

Accounts Receivable Turnover


Wal-Mart

Net Sales
Average Accounts
Receivable
Accounts Receivable
Turnover

Target

2014

2013

2014

2013

$ 473,076.0

$ 465,604.00

$72,596.00

$ 71,960.00

$ 6,722.50

$ 6,352.50

$ 2,920.50

$ 5,884.00

70.37

73.29

24.86

12.23

Number of Days Sales in Receivables


Wal-Mart
2014

Target

2013

2014

2013

Average Accounts Receivable

$ 6,722.50

$ 6,352.50

$ 2,920.50

$ 5,884.00

Average Daily Sales (Net Sales/


365)

$ 1,296.10

$ 1,275.63

$ 198.89

$ 197.15

5.19

4.98

14.68

29.85

Number of Days' Sales in


Receivables

Shows the average number of days it takes to collect a receivable


Targets ratios are at least twice as large as Wal-marts ratios
Continue to have efficient sales methods through affordable and
competitive pricing

Working Capital and Current Ratio


Wal-Mart

Target

2014

2013

Current Assets

$ 61,185

$ 59,940

$ 11,573

$ 16,388

Current Liabilities

$ 69,345

$ 71,818

$ 12,777

$ 14,031

Working Capital

$ (8,160)

$ (11,878)

$ (1,204)

$ 2,357

Current Assets

$ 61,185

$ 59,940

$ 11,573

$ 16,388

Current Liabilities

$ 69,345

$ 71,818

$ 12,777

$ 14,031

0.88

0.83

0.91

1.17

Current Ratio

2014

Found that Wal-Mart carries a lot of Accounts Payable


To improve must buy less on credit, pay off more debts
Easier to decrease liabilities than to increase Assets in our case

2013

Free Cash Flow


Target

Wal-Mart
2014

2013

2014

2013

Cash Flow from Operating Activities

$ 23,257.00

$25,591.00

$ 6,520.00

$ 5,325.00

Less Investments in PP&E needed to maintain


current production

$ 13,115.00

$12,898.00

$ 3,453.00

$ 3,277.00

Free Cash Flow

$ 10,142.00

$12,693.00

$ 6,520.00

$ 2,048.00

High NI allows for Greater Cash Flow from Operating Activities


Efficient inventory, selling, and pricing strategies
Have more cash on hand than Target
Keep being efficient in sales to continue this
Use this Free Cash Flow to improve two ratios we lost

Current Event
December, 2013 Security Breach in Target-40 Million
shoppers credit card information
Target ignored a red flag that was raised by their
malware security system
This impacted their net earnings from 2,999 in 2013 to
1,971 in 2014 (in millions)

Works Cited

"2013 Annual Report | Target Corporate." 2013 Annual Report | Target Corporate. Web. 7 Nov. 2014.
"EDGAR." SEC.gov. Web. 5 Nov. 2014.
Riley, Michael, Ben Elgin, Dune Lawrence, and Carol Matlack. "Missed Alarms and 40 Million Stolen
Credit Card Numbers: How Target Blew It." Bloomberg Business Week. Bloomberg, 13 Mar. 2014. Web.
14 Nov. 2014.
"Walmart Annual Reports." Walmart Annual Reports. Web. 16 Nov. 2014.