...Running head: THE VALUATION OF WAL-MART 1 THE VALUATION OF WAL-MART 2 In fiscal year 2010, Wal-Mart stock sold for a 52-week high of $55.01 and a 52-week low of $46.42. Stock in the company was regularly recommended as a “buy” or a “hold” by analysts, according to Bloomberg L. P. However, with dividend payment of only $1.09 per share on earnings of $3.72, a payout of only 29%, far lower than the industry payout rate at maturity of 45%. The result of this low dividend payout has Sabrina Gupta, a stock analyst, reevaluating the actual value of Wal-Mart stock as a recommendation to new or existing clients. Wal-Mart was built to save people money and make their lives better. Its business model has made Wal-Mart dominant. It beats out its competitors by offering a variety of products for competitive prices. It consistently plans expansion into metropolitan and international areas. Wal-Mart focuses on cutting their expenses at a rate that exceeds revenue growth so income will grow faster than revenue. The returns are distributed to the company’s investors. Wal-Mart has paid out dividends since its first stock offering in 1974, payouts ranged from 5.6% in 1974 to 29.3% in 2010. Over the last eight years, the payout percentage increased 12.5%. Analysis In the previous four years, the Wal-Mart stock continued to grow and fare well in the market. Since 1974, Wal-Mart’s annual earnings gained an average of 25% yearly, although growth has slowed to between...
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...Summary - Valuing Wal-Mart In utilizing the fundamental data provided by the 2010 Richard Ivey School of Business Foundation article titled Valuing Wal-Mart - 2010, I have made the following conclusions regarding the value of Wal-Mart (WMT) stock as of February 2012. * Utilizing the constant growth dividend discount model (DDM), the value of Wal-Mart’s stock price is $60.20. The most recent closing price of Wal-Mart stock was $53.48. Given this information, the constant growth DDM valuation suggests that the Wal-Mart stock is currently undervalued. * Utilizing the two-stage DDM approach, the value of Wal-Mart’s stock price is $83.95. Similar to the constant growth DDM valuation conclusion, the Wal-Mart stock is currently undervalued. * The capital asset pricing model (CAPM) was used to determine the appropriate required rate of return on Walm-Mart’s stock. The required rate of return for Wal-Mart is 7.01% * In following the concepts of the price/earnings (P/E) multiple approach, Wal-Mart’s intrinsic value based upon the P/E multiple approach is $55.03. Given the current stock price of Wal-mart of $53.48, this valuation would support that Wal-Mart’s stock is undervalued. *Several assumptions were made within the various valuation methods. The assumptions are noted and defined within each of the following sections. In summary, in employing the dividend discount valuation methods and price/earnings multiple approach, the Wal-Mart stock would be a “buy”...
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...Introduction: Financial Statement Analysis is used by interested parties such as inventors, creditors, and management to evaluate the past, current and projected condition and performance of the firm. Its analysis helps user make better desiccations. Ration analysis is the most common form of financial analysis. It provides relative measures of the firm’s conditions and performance. Horizontal analysis and Vertical analysis are also popular forms. Horizontal analysis is used to evaluate the trend in the accounts over the years, while vertical analysis, also called a common size Financial Statement discloses the internal structure of the firm. It indicates the existing relationship between sales and each income statement account. It shows the mix of assets debt that produces income and the mix of the sources of capital, where by current or long-term debt of by equity funding. Financial Statement Analysis prepared for the internal auditors, Many different financial measures are used to analyze financial statements and rank the performance of competing investment opportunities, including growth in sales, return to stockholders, profit margin, and return on equity. These are just four possible measures considered and evaluated by investors and creditors. Financial statements presented in various formats to help facilitate analysis. A classified set of financial statements groups items with similar characteristics together. Groupings include categories such as current assets; property...
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...Wal- Mart Jose Vasquez MGT 230 MAY 20, 2014 Melanie Behunin Wal- Mart In a variety of business environments around the world, four management functions are usually found. The four functions of management are planning, organizing, leading, and controlling. Planning occurs within these functions of a business, and it helps to deliver strategic value. Organizing will build a dynamic organization and leading will mobilize people. Controlling is part of learning and changing as the organization grows. All four functions of management are the key concept to effective management. Internal and external factors influence the decision-making process that affects management. The competitive landscape is constantly changing; therefore, managers must consider people and businesses around the world. These are used from top-level management to frontline or organizational management. Globalization, technology, innovation, diversity and ethics are factors that affect these business functions. One can examine almost any organization and find this to be true. Wal-Mart is one of the leading retail organizations in the world whose management functions are affected by these factors. Opening its doors in Rogers, Arkansas, Wal-Mart started a profitable business in 1962. The founder, Sam Walton, could never have envisioned where his company would be in the present. Earning approximately $30,000 in 1962, Wal-Mart has evolved into a multi-billion dollar company earning over $15 billion in 2011...
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...I. The Theme Wal-Mart was built to save people money so they can live better. Hints to their slogan: “Save Money. Live Better.” Their mission has allowed the company to grow around the world. The culture and the values of their employees help strive for success of Wal-Mart while serving over 200 million customers and members each week(Wal-Mart Annual). We strongly believe that Wal-Mart is the best- positioned global retailer and that they will continue to progress. Cost leadership is the corner stone of how Wal-Mart goes to market. Doing our analysis of Wal-Mart Stores, Inc., we gathered our information and different figures from the Hoover’s online through the Willis library’s website, Reuters.com, and Morningstar.com databases which gave us insight to several financial aspects of the firm, including its stock, cash flows, risk, dividends, sales, earnings, debt, and overall performance. II. Business Analysis Profile of the company “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.” Wal-Mart founder, Sam Walton, summarized his vision back in 1962 for a new type of discount store that consumers would appreciate. As an owner of a much smaller discount store Walton had the experience, did the research, and then put up 95 percent of the startup costs for his new company in which he and his wife truly believed in. The first store opened in Rogers, Arkansas and was...
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...Wal-Mart in China In the United States, Wal-Mart has become the leader of all retail stores and is the largest retailer than any other dominating the industry with stores in the international market. The company operates in 27 countries including Canada, and the United Kingdom (Farhoomand, & Wang, 2008; Wal-Mart, 2014). Wal-Mart was founded in Rogers, Arkansas by Sam Walton (Wal-Mart, 2014); and throughout the years it grew into a successful business. When Mr. Walton created Wal-Mart, he defined his business in three distinct objectives: individual respect, customer service, and strive for excellence (Hayden, et al., 2002). At that time, he utilized the “pricing philosophy” as one part of his corporate management strategy; this technique involved selling high quality, brand name products at the lowest price and has remained the same since Mr. Walton first opened the store (Farhoomand, & Wang, 2008; Hayden, et al., 2002, p. 16). Wal-Mart became a departmentalized, discount retail business and although the company launched its business in small-towns it expanded into larger cities (Farhoomand, & Wang, 2008; Hayden, et al., 2002). To accomplish his corporate aforementioned goals, Sam established two distinct rules; the first, the “Sundown Rule” in which an associate must logically provide an answer to a request or question from a customer or supplier within 24 hours (Hayden, et al., 2002, p. 16). Second, the “Ten Foot Rule” in which “an associate must greet, smile, and attend...
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...Security Analysis: WMT Group 2 Report Date | S & P Value | Last Price | Intrinsic Value | Economic Moat | Recommendation | 11/29/2010 | 1,187.76 | $53.85 | 60.93 | Wide | Hold | I. The Theme Wal-Mart was built to save people money so they can live better. Hints to their slogan: “Save Money. Live Better.” Their mission has allowed the company to grow around the world. The culture and the values of their employees help strive for success of Wal-Mart while serving over 200 million customers and members each week(Wal-Mart Annual). We strongly believe that Wal-Mart is the best- positioned global retailer and that they will continue to progress. Cost leadership is the corner stone of how Wal-Mart goes to market. Doing our analysis of Wal-Mart Stores, Inc., we gathered our information and different figures from the Hoover’s online through the Willis library’s website, Reuters.com, and Morningstar.com databases which gave us insight to several financial aspects of the firm, including its stock, cash flows, risk, dividends, sales, earnings, debt, and overall performance. II. Business Analysis Profile of the company “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.” Wal-Mart founder, Sam Walton, summarized his vision back in 1962 for a new type of discount store that consumers would appreciate. As an owner of a much smaller discount store Walton...
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...This paper defines the concept of technology in Supply Chain Management used to promote planning, analyze and account for the operations of a supply chain business with the goal being increased profits as well as a satisfied clients. This paper will discuss how to accomplish the benefits of cost, and profits through the use of a Supply Chain Management system. A thorough examination between buyers and sellers, along with the supply chain will be evaluated. This paper will investigate and analyze the ways in which the inventory management at Wal-Mart helps in its business processes. This paper will also look into the characteristics of supply chain management, including risk-management, inventory strategies and decision-making, and customer relationship aspects. Finally, it will look at the importance of sharing data by utilizing information systems. Supply chain is a network of retailers, distributors, transporters, storage facilities and suppliers that participate in the production, delivery and sale of a product to the consumer (Kietzman, 2008). Every effort involved in producing and delivering is looked at in supply chain, from the final product supplier's supplier to the customer's customer. A Business depends on supply chain to provide them with what they need in order to survive. Each business plays a role within the supply chain arena. As the market evolves companies will have to be aware of the role they play within the supply chain arena. Companies...
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...Library Research for Wal-Mart Stores, Inc. DeVry University Keller Graduate School of Management MGMT 591 November 24, 2013 Introduction of Organization: Wal-Mart is an American multinational retail corporation and the world’s second largest public corporation (Wal-Mart 2013). Founded by the Sam Walton, this company runs a chain of large discount department stores, and warehouse stores (Wal-Mart 2013). With over two million employees this company is worth approximately $446 billion. To this day Wal-Mart remains a private employer and is still run by the Walton Family (Wal-Mart 2013). Description of Problem: With more than two million employees worldwide, Wal-Mart has faced major lawsuits in regards to workforce. Employees are generally dissatisfied due to low wages, poor working conditions, and inadequate healthcare (Hart 2006). Furthermore, Wal-Mart faces sex discrimination allegations against their female employees in terms of promotions (Wexler 2011). This in-turn has caused Wal-Mart to be scrutinized constantly in regards to how they treat their employees. These issues have caused low job satisfaction amongst all employees. In my paper, I would like to look at employee motivation and how it can be applied to remedy this low employee satisfaction Wal-Mart is experiencing. Additionally, I want to look at attitudes and job satisfaction and what steps Wal-Mart can take to make sure that their employees are happy. I want to compare Wal-Mart’s top competitor,...
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...Running Head: FINANCIAL ANALYSIS Financial Health of Wal-Mart Introduction Wal-Mart is the largest grocery retail store chain of the world, which is headquartered in US. On the basis of revenue it is also the largest public corporation around the globe. It operates its business in several countries worldwide, which causes an increase its market structure and revenue. It serves more than 200 million customers weekly through more than 8159 retail stores in 15 countries under 55 different brand names. The total sales for the fiscal year 2009 were $401 million for the organization (Wal-Mart, 2010). Financial Data of the Company The business operation of Wal-Mart is increasing continuously, which is causing an increase in the financial performance of the business. The net sales of the company for year 2009 were $401.2 billion, which were 7.2% higher from the revenue in the year 2008. Total operating income of the company for fiscal year 2009 was $22.8 billion, which were $0.8 billion high than the operating income in 2008. The increase in revenue and income caused an increase in earnings per share and dividend per share, which significantly increased the value of its shareholders. The earnings per share were $3.35 and dividend per share was $0.95 for the year 2009. The net income of Wal-Mart for the year 2009 was $13 billion, which were also higher from last several years. The increase in its revenue and income also caused an increase in the total assets and current assets of the...
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... Pages 1. Executive summary..................................................................................... 3 2. Introduction................................................................................................ 3 3. Company overview..................................................................................... 3 4. Importance of business strategy................................................................... 4 5. Mission of Wal-Mart.................................................................................. 4 6. Objectives of Wal-Mart.............................................................................. 4 7. SWOT analysis of Wal-Mart...................................................................... 4-5 8. Application of Porter’s five forces in Wal-Mart............................................ 6-7 9. Wal-Mart Focus on Low-cost..................................................................... 8 10. Conclusion................................................................................................ 8 11. Recommendation....................................................................................... 9 12. References................................................................................................ 10-11 Executive Summary: In contemporary...
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...Student Copy This is to acknowledge receipt of the assignment from the following student: Student Name | Module No.: 205KM(Submission date & SCOPE stamp) | Programme Title & Programme Code: PROGRAMME - BSC (Hons) Business Information Technology | | SCOPE ID Numbers (from your SCOPE student card) | | Lecturer: | Tutorial group: | Module Code and Title:205KM Management and Organisational Behaviour | Due Date: 20 Dec 2013 (Fri) 5:00 pm 1. Hand in one hardcopy to SCOPE Reception Counter at Academic Exchange Building (AEB)2. Upload a softcopy to Turnitin "205KM-Assign2"(no need to print the Turnitin report) | Assignment No. / TitleReport#2 | Extension & late submissions allowed: | Coursework cover sheet – be sure to keep a copy of all work submitted Coventry University Have you attached the cover page information on page 1 to 4 including the “Marking Scheme” together with this assignment? ___Yes ___No Section A – To be completed by the student – PLEASE PRINT CLEARLY & IN SINGLE PAGE Student Name | Module No.: 205KM(Submission date & SCOPE stamp) | Programme Title & Programme Code: : PROGRAMME - BSC (Hons) Business Information Technology | | SCOPE ID Numbers (from your SCOPE student card): | | | | Lecturer: | Tutorial group: | Module Code and Title:205KM Management & Organisational Behaviour | Due Date: 20 Dec 2013 (Fri) 5:00 pm 1. Hand in one hardcopy to SCOPE...
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...Company Overview Wal-Mart originated in 1969 under the leadership of Sam Walton. Wal-Mart is the largest superstore chain in the United States. Wal-Mart operates 8,000 stores across three business segments of retail stores worldwide that offer a wide array of general merchandise including groceries, apparel, electronics, and small appliances. In addition, the company is the world's largest retailer and grocery chain by sales and just over half of the company's sales comes from grocery items. The company focuses on offering the lowest prices across its business segments. The Company operates in three business segments: Walmart U.S., International and Sam's Club. During the fiscal year ended January 31, 2010 (fiscal 2010), • The Walmart U.S. segment accounted for 63.8% of its net sales, and operated retail stores in different formats in the United States, as well as Walmart's online retail operations, walmart.com. • The International segment consists of retail operations in 14 countries and Puerto Rico. During fiscal 2010, the segment generated 24.7% of the Company's net sales. The International segment includes different formats of retail stores and restaurants, including discount stores, supercenters and Sam's Clubs that operate outside the United States. • The Sam's Club segment consists of membership warehouse clubs in the United States and the segment's online retail operations, samsclub.com. During fiscal 2010, Sam's Club accounted for 11.5% of its net...
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...An E-Business Analysis of Walmart Patricia Brandon-Garst E-Business Professor Victor Olufeso August 29, 2011 An E-Business Analysis of Walmart Walmart is the world’s largest company and quite possibly the most powerful retailer. Walmart began as strictly a brick and mortar store but has advanced into click and mortar over the last five decades. Walmart may soon become a major competition for huge online only retailers like Amazon. The recent acquisitions by Walmart are sure to be placing this retailer in place for an online invasion of epic proportions. Walmart was started by Sam Walton in rural Arkansas in 1962. Sam Walton had previously owned a franchise in the Ben Franklin stores since 1944 and also opened a small chain of stores called Walton’s 5 & 10. Sam Walton was extremely industrious and had a knack for increasing sales in businesses. His ability to find ways to slash prices to the lowest bottom line is the reason for the success of Walmart. (Sam Walton, 2009) Walmart stores have been geared toward the low-income customer segment. The concept of frugality is the central tenet of the company. Even the Walmart headquarters is a drab and plain building in a small town in central Arkansas. There are no luxuries at the headquarters and it is not based in a fancy big city. During the recent downturn of the world economy when other businesses were going under, Walmart had reported sales growth of 11%, amounting...
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...Marketing Five Year Marketing Plan Walmart Sherry Smith Baker College Table of Contents I. Title Page 1 II. Table of Contents 2-3 III. Executive Summary 4 IV. Company Description 4-5 V. Strategic Focus and Plan 5 a) Mission Statement (Current) 5 b) New or Revised Mission Statement 5 i. Vision Statement (Current) 5 ii. New or Revised Vision Statement 5-6 c) Goals 6 1) Non-financial Goals 6 2) Financial Goals 6 d) Core Competency and Sustainable Competitive Advantage 6 VI. Situation Analysis 7 a) SWOT Analysis 7 b) Industry Analysis 7-8 c) Competitors 8 d) Company Analysis 8-9 e) Customer Analysis 9 VII. Market Product Focus 9 a) Marketing and Product Objectives 10-11 b) Target Markets 11 c) Points of Difference 11 d) Positioning 11-12 VIII. Marketing Program 12 a) Product Strategy 12 i. Product Line 12 ii. Unique Product Quality 12-13 iii. Packaging 13 b) Price Strategy 13 c) Promotion Strategy 13-14 d) Place (Distribution) Strategy 14 IX. Financial Data and Projections 14 a) Past Sales Revenues 14-15 b) Five-Year...
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