Wal-Mart Stores
Wal-Mart is a multinational retail corporation based in the United States. The retail operates departmental stores and warehouses which offer huge discounts to their customers. It is the third biggest public retail corporation with 8500 stores operating in over 15 countries. The store was founded in 1962 and has registered growth since its inception to date (Rosenbloom, 2012). This report focuses on sales and profit figures from 2008 to 2012.
Income as a Percentage of Sales= Income/Sales*100
The expression of the net income as a percentage of the sales is an indicator of the management’s efficiency in utilizing the resources at their disposal to generate profits. This information can be relied upon by all users of accounting information. The percentages shown indicate the amount of the profits that is available for distribution to the shareholders after covering all the expenses. The net income increased from $12.86 billion to $13.25 billion as a result of an increase in the sales from $373.821 to $401.087 billion from the year 2008 to 2009 (Wal-Mart, 2011).
Fig 2: Graph of net income over five years
Despite the increase in net income and sales, the percentage of net income to sales dropped from 3.44% to 3.305% indicating that in the year 2009 the management of Wal-Mart was less efficient in its operation to generate profits.
Fig 3: Graph of income as a percentage of sales
The sales increased consecutively from 405.132, 418.952, 443.854 billion dollars in the years 2010, 2011 to 2012 respectively. The net income also increased in the three years from 14.41, 15.36 to 15.77 billion dollars in the years 2010, 2011, and 2012 respectively (Wal-Mart, 2012). The percentage of net income to sales increased from 3.5569%, 3.6663, and 3.5529% in 2010, 2011 and 2012 respectively (Market Watch, 2012).
Fig 1: Wal-Mart sales over five years
References
Market Watch (2012). WMT Annual Income Statement. The Wall Street Journal. Retrieved from http://www.marketwatch.com/investing/stock/wmt/financials
Rosenbloom, W. (2010). Wal-Mart’s Growth Slow. New York Times. Retrieved from http://www.nytimes.com/2010/05/19/business/economy/19shop.html?pagewanted=all
Wal-Mart (2011). Wal-Mart 2011 Financial Reports. Wal-Mart Stores. Retrieved from http://www.walmartstores.com/sites/annualreport/2011/financials/2011_financials.pdf
Wal-Mart (2012). 50 years of helping customers save money and live better. Wal-Mart Stores. Retrieved from http://www.walmartstores.com/sites/annual-report/2012/WalMart_AR.pdf
