Wal-Mart Mini Term Paper

1217 WordsJan 18, 20155 Pages
1. What is the name of the company? What is the industry sector? The name of the company I choose form my mini-case is Wal-Mart. Wal-Mart is in the department store industry sector. 2. What are the operating risks of the company? One of the biggest operating risk Wal-Mart has to face is shrinkage. Some of the many types of shrinkage Wal-Mart has to deal with is employee theft, shipping errors, warehouse discrepancies, and misplaced goods. Wal-Mart also has the risk of receiving damaged goods to its stores that cannot be sold and goods that perish before they are able to be sold. 3. What is the financial risk of the company (the debt to total capitalization ratio)? The debt to total capitalization ratio explains the financial risk of a company. The debt to total capitalization is calculated as the total debt/total capitalization of the company. The total debt of Wal-Mart is 45.87 billion. The total capitalization is comprised of the short term portion of long term debt plus the long debt and the market capitalization which is the current price of the stock ($74.68 on Jan 31, 2014) multiplied by the total amount of stock which is 3.22255 billion shares. The total capitalization= $45.87 billion (total debt) + $240.66 (Market cap) which equals $286.53 billion for the total capitalization. So to find the debt to capitalization ratio. Total debt= $45.87 billion/ Total Capitalization ratio= $286.53. Debt/Capitalization ratio= 16% 4. Does the company have any preferred stock? Wal-Mart currently does not have any preferred stock listed. 5. What is the capital structure of the company: short-term portion of long-term debt, long-term debt, preferred stock (if any), and market value of common stock issued and outstanding? Wal-Mart’s Capital Structure is as follows: short-term portion of long-term debt equals $4.10 billion, long-term debt equals

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