Fin 534 Financial Analysis Paper

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Financial Research Report for Walmart FIN 534 Financial Management Financial Research Report - Walmart Financial managers are responsible for establishing investment strategies for businesses. As a financial manager I have been asked to select a publicly traded corporation that is a good investment alternative for a client. There are various characteristics that I consider in the investment. The company must have a long history of success in the marketplace. Another desired attribute is that it must operate in than one country making the firm a global enterprise. Looking for companies that during the last three years earn a positive net income. The firm's stocks must be considered a blue chip stock. Blue chip stocks are stocks issued…show more content…
The formula to calculate current ratio is current assets divided by current liabilities. Walmart had a current ratio in 2014 of 0.88 which is 0.04 higher than its 2013 results. The fact that the current ratio of the company increased by 0.04 is a positive sign. The company's current ratio is a bit below the general rule of a current ratio being good if is above the 1.0 threshold. In 2014 the debt ratio of Walmart was 0.60. The debt ratio shows the solvency of the company. A debt ratio is good if is the below the 1.0 threshold, thus Walmart is not too highly leverage and has an acceptable level of overall…show more content…
Despite the success of Walmart its executive management team must the aware that the corporation is exposed to a variety of business risks. As the largest employer in the world one of the risk the company is exposed too comes from its own work staff. Employees can become a source of risk because acts such as injuries in the workplace can cost the company money in medical expenses and potential lawsuits. Employees can file a lawsuit against the employer for a variety of reasons including wrongful termination of employment, sexual harassment, and discrimination among other reasons. Another risk that the firm faces is legal. Just like employees can file lawsuits against the company other stakeholder groups such as suppliers and customers can also take legal action against the company. The unionization of employees is a risk that can affect the employee relations of the company. A union can ask for exorbitant pay raises which could force Walmart to raise its payroll expenses which would lower the profitability of the firm. A union also has the power to shut down the operations of the firm if the employees go on

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