Question

using Walmarts most recent 10-k report, please add an analysis for the Liquidity Ratio ( A, B, C) (if you would do at least one or of them id be grateful)

Compute and analyze the following groups of ratios for your company and explain how they affect the investors’ or creditors’ decisions regarding the company in an essay(800 words or more (300 each part)). Please include an introduction sentence referencing the sources of data for ratios. Provide a comparative analysis for each ratio. Make sure your analysis includes a comparison to the company’s prior year ratios OR the competitor’s ratios

• Liquidity Ratios:

A. Current ratio = Current Assets / Current Liabilities

= 61897/77477

=0.80

B. Accounts receivable turnover =Net Sale/Average AR

Average AR=	5614+6283
2
Average AR=	5948.50

Accounts receivable turnover=510329/5948.50

=85.79

C. Inventory turnover =Cost of Goods Sold/Average Inventories

Average Inventory=	43783+44269
2
Average Inventory=	44026

Inventory turnover=385301/44026

=8.75

Answer 1

• Liquidity Ratios:

A. Current ratio = 0.80

The current ratio of the company is 0.80, this means that the current assets of the company is not enough to settle the current liabilities. A current ratio above 1 is optimal.

B. Accounts receivable turnover = 85.79

The Accounts recivable turnover ratio shows the capability of the company to collect the credit sales made. The company (Walmart) has 85.7 as its accounts receivable tratio, which when compared to other companies in the industry (Normaly 80 and below) has a higher quality customers that pay their debts quickly.

C. Inventory turnover = 8.75

Inventory turnover ratio shows how many times the company has replaced the inventory as reason of sales. Walmart has inventory turnover ratio of 8.75, which means that it has replenished the inventory almost to 9 times during the year due to its sales.