Comparing Walmart and Target Capital Expenditures
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Comparing Walmart and Target Capital Expenditures
In every business there is always a need for capital expenditures. Capital Expenditures can be very beneficial and can also differentiate the numbers from rival companies. According to readings “capital expenses are extensive and mostly hold a company’s substantial amount of money. Companies invest in prime property, plant, machinery, buildings and other forms of fixed assets, which also act as securities for the company. I chose to look up the Capital Expenditures of two companies that are known in many households: Walmart and Target. The annual report of mutually businesses over the past three years will be examined. This paper will examine and compare the reports and the amount of capital spending over the past three years while defining how the amount of capital spending remains constant or if it’s altered. Capital expenditures can determine the major financial decisions that a company must make in order to acquire a sound investment. This paper will attempt to expand on the clarification of capital expenditure and the impact it can have on the organization’s debt capacities and capital structures. As stated by Byrd and associates in the text, there should be a comparison of the level of capital spending across the two firms. The paper will further point out how the spending was similar and/or different and speculate why the similarities or differences might exist.
The capital spending over the past three years for Walmart (Mergent, 2013): 2013 2012 2011
Net Fixed Assets $213,115,000 $185,506,000 $180,663,000
Depreciation Expense $9,601,000 $8,350,000 $7,741,000
Net Capital Spending $311,716,000 $212,636,000 $178,404,000

According to Mergent Inc. “Wal-Mart has had their net capital spending increase each of the past 3 years. The