Answered Essay: Financial Statements for Walmart Stores Inc. and Macy's Inc. Table 3-7 contains the fina

Financial Statements for Walmart Stores Inc. and Macys Inc Table 3-7 contains the financial results for Walmart and Macys for 2012. Evaluate the financial performance of each company based on the various metrics discussed in Section 3.1, such as ROE, ROA, profit margin, asset turns, APT, C2C, ART, INVT, and PPET. Can you explain the differences you see in their performance based on their supply chain strategy and structure? Compare the metrics for each company with similar metrics for Amazon and Nordstrom from Table 3-1. Which metrics does each company perform better on? What supply chain drivers and metrics might explain this difference in performance? Selected Financial Data for Walmart Stores Inc. and Macys Inc. TABLE 3-7 Year ended January 31, 2013 (S millions) Net operating revenues Cost of goods sold Gross profit Walmart 469,162 352,488 116,674 88,873 27,801 2,251 187 25,737 7,981 17,756 Macys 27,686 16,538 11,148 8,482 2,661 425 (134) 2,102 767 1,198 ling, general, and administrative expense Operating income Interest expense Other income (loss-net Income before income taxes Income taxes Net income Assets Cash and cash equivalents Net receivables Inventories Total current assets Property, plant, and equipment Goodwill Other assets Total assets Liabilities and Stockholder Equit Accounts payable Short-term debt Total current liability Long-term debt Total liabilities Stockholder equity 7,781 6,768 43,803 59,940 116,681 20,497 5,987 203,105 1,836 371 5,308 7,876 8,196 3,743 615 20,991 59,099 12,719 71,818 41,417 126,243 76,343 4,951 5,075 6,806 14,940 6,051

Financial Statements for Walmart Stores Inc. and Macy’s Inc. Table 3-7 contains the financial results for Walmart and Macy’s for 2012. Evaluate the financial performance of each company based on the various metrics discussed in Section 3.1, such as ROE. ROA. profit margin, asset turns. APT, C2C. ART, INVT, and PPET. Can you explain the differences you see in their performance based on their supply chain strategy and structure? Compare the metrics for each company with similar metrics for Amazon and Nordstrom from Table 3-1. Which metrics does each company perform better on? What supply chain drivers and metrics might explain this difference in performance?

Expert Answer

 

evaluation of the company performance based on :

walmart Macy

Return on equity =net income/ shareholders equity =17756 / 76343=23.26% =1198 / 6051= 19.8 %

Return on asset=net income/ average total assets =17756 / 203105= 8.74 % =1198 / 20991= 5.71%

Profit margin=net income/ net sales =17756 / 469162 = 3.78% = 1198 / 27686 = 4.32%

Asset turnover ratio=net sales/ average total assets =469162/203105= 2.309 =27686 / 20991= 1.32

average receivables turnover:credit sales/average debtors = 469162/6768= 69.32 =27686/ 371= 74.62

inventory turnover:: cost of good sold/ average inventory = 352488 / 43803= 8.047 =16538/5308 = 3.115

property plant equipment turnover:revenue/ ppe = 469162/116681=4.02 = 27686/8196 = 3.37

creditor turnover ratio= cost of goods sold/avg creditors = 352488/59099= 5.96 = 16538/ 4951 = 3.34

Cash to cash cycle :no of days of sales outstanding = 365/69.32 +365/8.047 = 365/74.62 + 365/3.115

+ inventory days (-) Days payable to customer (-) 365/5.96 (-)365/3.34

=(10.63) days negative cycle = (12.78) days negative

cash cycle

if cash cycle is negative it means the company doesnt pay for inventory or materials until after you’ve sold the final product associated with them.working capital is used as efficiently as possible and have available cash for other things.

Note : 1) If the full forms given for the ratio are not what it is , kindly comment

2) balance part of the question has not been answered due to non availablity of table 3.1 as mentioned in question for amazon and nordstorm.

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