Must be original, not copied and must pass turnitin. also must have the link data came from. Find the financial statements for Walmart a publicly traded company, and examine its statement of cash flows. Prepare the cash ratios presented in the Module 7 Readings, and prepare an overview (300 words) of what is revealed about the company by its statement of cash flows and cash ratios. Post a link to the financial statements with your initial post, and include the company name in the subject line. Do not choose a company that one of your classmates has already selected. To participate in follow-up discussion, choose one of the companies that a classmate has reviewed, examine the company’s financial statements, and provide your own commentary on it. All posts should be grammatically correct and proofread for spelling.
Here is Wal-Mart Stores Inc., Consolidated Statement of Cash Flows
USD $ in millions
| 12 months ended | Jan 31, 2015 | Jan 31, 2014 | Jan 31, 2013 | Jan 31, 2012 | Jan 31, 2011 | Jan 31, 2010 | |
|---|---|---|---|---|---|---|---|
| Consolidated net income | 17,099 | 16,695 | 17,756 | 16,387 | 16,993 | 14,848 | |
| (Income) loss from discontinued operations, net of income taxes | (285) | (144) | – | 67 | (1,034) | 79 | |
| Income from continuing operations | 16,814 | 16,551 | 17,756 | 16,454 | 15,959 | 14,927 | |
| Depreciation and amortization | 9,173 | 8,870 | 8,501 | 8,130 | 7,641 | 7,157 | |
| Deferred income taxes | (503) | (279) | (133) | 1,050 | 651 | (504) | |
| Other operating activities | 785 | 938 | 527 | 398 | 1,087 | 301 | |
| Receivables, net | (569) | (566) | (614) | (796) | (733) | (297) | |
| Inventories | (1,229) | (1,667) | (2,759) | (3,727) | (3,086) | 2,265 | |
| Accounts payable | 2,678 | 531 | 1,061 | 2,687 | 2,557 | 1,052 | |
| Accrued liabilities | 1,249 | 103 | 271 | (935) | (280) | 1,348 | |
| Accrued income taxes | 166 | (1,224) | 981 | 994 | (153) | – | |
| Changes in certain assets and liabilities, net of effects of acquisitions | 2,295 | (2,823) | (1,060) | (1,777) | (1,695) | 4,368 | |
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities | 11,750 | 6,706 | 7,835 | 7,801 | 7,684 | 11,322 | |
| Net cash provided by operating activities | 28,564 | 23,257 | 25,591 | 24,255 | 23,643 | 26,249 | |
| Payments for property and equipment | (12,174) | (13,115) | (12,898) | (13,510) | (12,699) | (12,184) | |
| Proceeds from the disposal of property and equipment | 570 | 727 | 532 | 580 | 489 | 1,002 | |
| Proceeds from the disposal of certain operations | 671 | – | – | – | – | – | |
| Investments and business acquisitions, net of cash acquired | – | (15) | (316) | (3,548) | (202) | – | |
| Other investing activities | (192) | 105 | 71 | (131) | 219 | (438) | |
| Net cash used in investing activities | (11,125) | (12,298) | (12,611) | (16,609) | (12,193) | (11,620) | |
| Net change in short-term borrowings | (6,288) | 911 | 2,754 | 3,019 | 503 | (1,033) | |
| Proceeds from issuance of long-term debt | 5,174 | 7,072 | 211 | 5,050 | 11,396 | 5,546 | |
| Payments of long-term debt | (3,904) | (4,968) | (1,478) | (4,584) | (4,080) | (6,033) | |
| Dividends paid | (6,185) | (6,139) | (5,361) | (5,048) | (4,437) | (4,217) | |
| Purchase of Company stock | (1,015) | (6,683) | (7,600) | (6,298) | (14,776) | (7,276) | |
| Dividends paid to noncontrolling interest | (600) | (426) | (282) | (526) | – | – | |
| Purchase of noncontrolling interest | (1,844) | (296) | (132) | – | – | (436) | |
| Other financing activities | (409) | (488) | (84) | (71) | (634) | (742) | |
| Net cash used in financing activities | (15,071) | (11,017) | (11,972) | (8,458) | (12,028) | (14,191) | |
| Effect of exchange rates on cash and cash equivalents | (514) | (442) | 223 | (33) | 66 | 194 | |
| Net increase (decrease) in cash and cash equivalents | 1,854 | (500) | 1,231 | (845) | (512) | 632 | |
| Cash and cash equivalents at beginning of year | 7,281 | 7,781 | 6,550 | 7,395 | 7,907 | 7,275 | |
| Cash and cash equivalents at end of year | 9,135 | 7,281 | 7,781 | 6,550 | 7,395 | 7,907 |
Source: Wal-Mart Stores Inc., Annual Reports
from the above cash flow we will prepare the various cash flow ratio as follow for the year 2014 and 2015
| Ratio | 2015 | 2014 | 2013 |
| Operation cash flow % yoy | -912 | 551 | |
| Free Cash Flow Growth % YOY | — | — | — |
| Cap Ex as a % of Sales | 2.51 | 2.75 | 2.75 |
| Free Cash Flow/Sales % | 3.37 | 2.13 | 2.71 |
| Free Cash Flow/Net Income | 1 | 0.63 | 0.75 |
Walmart Annual Cash-Flow Financial Ratios
FCF margin 0.02
Overview:
As we know that Cash flow statement of any company gives a true view of the liquidity position of the
company. Company having a very high net cash inflow (from all operations) but a negative
cash flow from operating activity represents that the liquidity position of the company is in
danger as the positive net cash flow is only a temporary phenomenon. It shows the flow of
cash inflows and outflows from the operating activities of the business this includes purchase
of goods in cash, payment to creditors, payment of wages, sale proceeds, payment of
salaries, cash from debtors, etc. A business always desires a positive cash flow from kits
operating activity as this shows the liquidity condition of the business. A negative cash flow
from the operating activity portrays a comparatively bad liquidity position.
A cash flow statement is a listing of cash flows that occurred during the past accounting period. A projection of future flows of cash is called a cash flow budget. You can think of a cash flow budget as a projection of the future deposits and withdrawals to your checking account.
A cash flow statement is not only concerned with the amount of the cash flows but also the timing of the flows. Many cash flows are constructed with multiple time periods. For example, it may list monthly cash inflows and outflows over a year’s time. It not only projects the cash balance remaining at the end of the year but also the cash balance for each month.
Working capital is an important part of a cash flow analysis. It is defined as the amount of money needed to facilitate business operations and transactions, and is calculated as current assets (cash or near cash assets) less current liabilities (liabilities due during the upcoming accounting period). Computing the amount of working capital gives you a quick analysis of the liquidity of the business over the future accounting period. If working capital appears to be sufficient, developing a cash flow budget may be not critical. But if working capital appears to be insufficient, a cash flow budget may highlight liquidity problems that may occur during the coming year.
The cash flow statement of Amazon.com Inc and the ratios calculated above represents that
the liquidity position of the company is ideal. Operating cash flow/current maturities of long
term debt and current notes payable shows the company’s ability to repay its current debts
out of the proceeds from its operating activities. In case of Amazon.com Inc this ratio is 0.43
which represents that cash flow from operation is not sufficient enough to meets is current
liabilities this can also be interpreted that the firm has to repay its current debt out of the
borrowed funds or from sale of investments.
From the above cash flow of wallmart we can make following analysis
- Walmart has a cash of 9.14B on hand. A healthy amount of cash on hand is necessary for any company. Cash has an opportunity cost associated with it, and too much cash in bank may mean that the firm has no or limited growth plans. Hence its important to track the Net Change in Cash and Cash Equivalents along with the Walmart stock price.
- Cash Flow from operating activities: Walmart reported a positive operating cash flow of 28.56B for 2015 and has seen an increase from the previous year. Operating cash flow or working capital comes from main business activities. Investors look for positive cash flow from recurring operating activities.
- Cash from investing stood at a positive value of -11125M for WMT stock. A company with surplus cash usually thinks of re-investing it in the form of buying fixed assests, or purchasing plant/ machinery which will help grow the business further. By looking at cash flow from investment activities one can check where the company is putting its cash.
- Cash flow from financing activities shows the flow of cash between Walmart and its owners and creditors and was -15071M for 2015. Financing activities allow a company to raise capital, and repay bondholders
