Working Capital;
Walmart;
Working capital = Total current assets-Total current liabilities
Increase in total current assets in the year 2014 is (61985-59940) =USD 1245
Decrease in total current liabilities in the year 2014 is (69345-71818) =USD-2473
Therefore; working capital is 1245--2473=USD 3718
Whole Foods;
Decrease in total current assets in the year 2013 is (2103000-1980000) =USD123000
Increase in current liabilities in the year 2013 is (1088000-977000) =USD111000
Therefore; working capital=-123000-111000=USD -234000
Current Ratios;
Walmart;
Current ratio = Current Assets/Current Liabilities
Current Assets=1245
Current Liabilities=2473
Therefore; current ratio=1245/2473=0.5034
Having a ratio of less than 1 shows that the company’s liabilities exceed the assets and therefore, the company may not be able to pay off its financial obligations using the assets.
Whole Foods;
Current Assets=-123000
Current Liabilities=-111000
Therefore, Current ratio=-123000/-111000=1.1081
The firm’s ratio is more than 1 showing its financial ability to pay off liabilities with its assets.
Ratio of Liability to Stockholders’ Equity;
Debt to Equity Ratio=Total Liabilities/Stockholders’ Equity Walmart;
Increase in Total Liabilities = (128496-126762) =1734
Decrease Stockholders Equity= (76255-76353) =-98
Therefore, debt to equity ratio= 1734/-98=-17.6939
A ratio of less than 1 shows that a greater proportion of assets is contributed by the stockholders and indicates a greater protection for the money of creditors.
Whole Foods; Increase in stockholders’ equity= (3878000-3802000) =76000
Increase in liabilities= (1660000-1492000) = 168000
Therefore, debt to equity ratio = 168000/76000=2.2105
A higher than 1 ratio indicates that a greater proportion of the company’s assets are contributed by creditors. This shows that stockholders want to get benefit from the creditors. From the analysis of both companies, it can be concluded that both companies rely on credit financing to a large extent over the years as can be seen in the balance sheet. In terms of how the two companies have set up their financial structures, it is clear that a large proportion of assets in the Walmart Stores have been contributed by the stockholders.
This can be seen through the low equity ratio. Therefore, creditors may be more willing to give loans to this firm as the security of their money is most likely assured. Conversely, the equity ratio of Whole Foods indicates that a larger portion of assets is from creditors. This ratio could be appropriate for the stockholders who want to gain from the creditors by using their money to do their business.
Considering the current ratios, Whole Foods displays a higher capability to pay off debts compared to Walmart Stores. This could also indicate higher profit margins for Whole Foods
Market.
In view of this analysis, I would recommend a loan to the Whole Foods Market as it displays a stronger financial structure. The company has also got higher capability to pay its debts using the current assets. Its current assets are more than its liability.
Current Events for Walmart Stores;
The Walmart Stores has formed a joint venture with CROSSMARK that will help the company in planning, organizing and scheduling the events in their stores. The venture is called “Shopper Events” which has experienced and skilled staff. It will help in the marketing of products and services.
The company plans to add about 28 million net retail square feet worldwide in the coming year. This will translate a decrease from the anticipated above 30 million as a result of moderation of large format store growth and accelerated e-commerce investments.
In the fiscal year 2016, investments in e-commerce are expected to range between $1.2-1.5 billion from around $1 billion estimated for the current year.
The capital investments will be between $11.6 and $12.9 billion for 2016 including the investment in e-commerce. This decrease from 2015 is as a result of change in mix of spending toward more digital growth and a moderation of physical store growth.
Current Events for Whole Foods Market; Apparently, Whole Foods operates leases from Safeway Inc for seven locations that were acquired in February this year. They were previously operated as Dominick’s stores. Walmart’s Balance Sheet In Millions of USD (except for per share items)
As of 2014-01-31
As of 2013-01-31
As of 2012-01-31
As of 2011-01-31
Cash & Equivalents 6,627.00 7,066.00 6,003.00 6,891.00
Short Term Investments - - - -
Cash and Short Term Investments 6,627.00 7,066.00 6,003.00 6,891.00
Accounts Receivable - Trade, Net 6,677.00 6,768.00 5,937.00 5,089.00
Receivables - Other - - - -
Total Receivables, Net 6,677.00 6,768.00 5,937.00 5,089.00
Total Inventory 44,858.00 43,803.00 40,714.00 36,437.00
Prepaid Expenses 1,909.00 1,588.00 1,774.00 2,960.00
Other Current Assets, Total 1,114.00 715.00 547.00 635.00
Total Current Assets 61,185.00 59,940.00 54,975.00 52,012.00
Property/Plant/Equipment, Total -
Gross 178,678.00 171,724.00 160,938.00 154,489.00
Accumulated Depreciation, Total -60,771.00 -55,043.00 -48,614.00 -46,611.00
In Millions of USD (except for per
share items)
As of 2014-
01-31
As of 2013-
01-31
As of 2012-
01-31
As of 2011-
01-31
Goodwill, Net 19,510.00 20,497.00 20,651.00 16,763.00
Intangibles, Net - - - -
Long Term Investments - - - -
Other Long Term Assets, Total 6,149.00 5,987.00 5,456.00 4,129.00
Total Assets 204,751.00 203,105.00 193,406.00 180,782.00
Accounts Payable 37,415.00 38,080.00 36,608.00 33,676.00
Accrued Expenses 18,793.00 18,808.00 18,180.00 18,701.00
Notes Payable/Short Term Debt 7,670.00 6,805.00 4,047.00 1,031.00
Current Port. of LT Debt/Capital
Leases 4,412.00 5,914.00 2,301.00 4,991.00
Other Current liabilities, Total 1,055.00 2,211.00 1,164.00 204.00
Total Current Liabilities 69,345.00 71,818.00 62,300.00 58,603.00
Long Term Debt 41,771.00 38,394.00 44,070.00 40,692.00
Capital Lease Obligations 2,788.00 3,023.00 3,009.00 3,150.00
Total Long Term Debt 44,559.00 41,417.00 47,079.00 43,842.00
Total Debt 56,641.00 54,136.00 53,427.00 49,864.00
Deferred Income Tax 8,017.00 7,613.00 7,862.00 6,682.00
Minority Interest 6,575.00 5,914.00 4,850.00 3,113.00
Other Liabilities, Total - - - -
Total Liabilities 128,496.00 126,762.00 122,091.00 112,240.00
Redeemable Preferred Stock, Total - - - -
Preferred Stock - Non Redeemable,
Net - - - -
Common Stock, Total 323.00 332.00 342.00 352.00
Additional Paid-In Capital 2,362.00 3,620.00 3,692.00 3,577.00
Retained Earnings (Accumulated Deficit) 76,566.00 72,978.00 68,691.00 63,967.00
Treasury Stock - Common - - - -
Other Equity, Total -2,996.00 -587.00 -1,410.00 646.00
Total Equity 76,255.00 76,343.00 71,315.00 68,542.00
Total Liabilities & Shareholders'
Equity 204,751.00 203,105.00 193,406.00 180,782.00
Shares Outs - Common Stock
Primary Issue - - - -
Total Common Shares Outstanding 3,233.00 3,314.00 3,418.00 3,516.00
Whole Foods Market Balance sheet
Period Ending Sep 29, 2013 Sep 30, 2012 Sep 25, 2011
Assets
Current Assets
Cash And Cash Equivalents 401,000 192,000 303,960
Short Term Investments 733,000 1,131,000 442,320
Net Receivables 339,000 329,000 296,486
Inventory 414,000 374,000 336,799
Other Current Assets 93,000 77,000 73,579
Total Current Assets 1,980,000 2,103,000 1,453,144
Long Term Investments 302,000 221,000 52,815
Property Plant and Equipment 2,428,000 2,193,000 1,997,212
Goodwill 679,000 663,000 662,938
Intangible Assets 65,000 62,000 67,234
Accumulated Amortization - - -
Other Assets 12,000 9,000 8,584
Deferred Long Term Asset Charges 72,000 43,000 50,148
Total Assets 5,538,000 5,294,000 4,292,075
Liabilities
Current Liabilities
Accounts Payable 651,000 580,000 536,327
Short/Current Long Term Debt 1,000 1,000 466
Other Current Liabilities 436,000 396,000 342,568
Total Current Liabilities 1,088,000 977,000 879,361
Long Term Debt 26,000 23,000 17,439
Other Liabilities 46,000 51,000 50,194
Deferred Long Term Liability Charges 500,000 441,000 353,776
Minority Interest - - -
Negative Goodwill - - -
Total Liabilities 1,660,000 1,492,000 1,300,770
Stockholders' Equity
Misc Stocks Options Warrants - - -
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock 2,765,000 2,592,000 2,120,972
Retained Earnings 1,265,000 1,233,000 870,497
Treasury Stock (153,000) (28,000) -
Capital Surplus - - -
Other Stockholder Equity 1,000 5,000 (164)
Total Stockholder Equity 3,878,000 3,802,000 2,991,305
Net Tangible Assets 3,134,000 3,077,000 2,261,133
