Profibatility and Risk analysis

Profitability and Risk Analysis: Guidelines

To complete the Profitability and Risk Analysis, you should:

• Familiarize yourself with Walmart's financial performance and assumptions provided in the
• Section 1 - Profitability and Risk Analysis of a Walmart Competitor
  1. a. Selection of a Competitor and Financial Data Source
• Visit the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov
• Links to an external site.
• and use the EDGAR database to locate the annual report (Form 10-K) for a competitor of Walmart for the fiscal year ending 2022. Within the report, refer to Item 8, which contains the company's financial statements.
  Alternatively, you may access Yahoo Finance at https://finance.yahoo.com/
• Links to an external site.
• to retrieve the annual financial statements for a selected Walmart competitor for the same fiscal year.
  1 b. Company Background
  Provide a concise background of the selected company, including a brief history of the company, its core business operations, and key competitive advantages.
  1 c. Profitability and Risk Analysis of Walmart's Competitor.
  Using the financial statements (Balance Sheet, Income Statement, and Statement of Cash Flows) obtained from SEC EDGAR or Yahoo Finance, conduct a Profitability and Risk Analysis by calculating the following financial ratios for the year 2022:
  Profitability Analysis Ratios
  1. Net Profit Margin
  2. Return on Assets (ROA)
  3. Return on Equity (ROE)
  4. Inventory Turnover
• Risk Analysis Ratios
  1. Current Ratio
  2. Operating Cash Flow to Current Liabilities
  3. Accounts Receivable Turnover Ratio
  4. Days Sales Outstanding
  5. Liabilities to Shareholders’ Equity Ratio
  6. Operating Cash Flow to Total Liabilities Ratio
• Section 2 - Profitability and Risk Analysis of Walmart
  Financial Analysis of Walmart
  Utilizing the financial statements provided in:
  1. Exhibit 4.10 – Walmart Stores, Inc. Balance Sheets
  2. Exhibit 4.11 – Walmart Stores, Inc. Income Statements
  3. Exhibit 4.12 – Walmart Stores, Inc. Statements of Cash Flows
• Perform a Profitability and Risk Analysis for Walmart for the fiscal year 2022 by calculating the following key financial ratios:
  Profitability Analysis Ratios
  1. Net Profit Margin
  2. Return on Assets (ROA)
  3. Return on Equity (ROE)
  4. Inventory Turnover
• Risk Analysis Ratios
  1. Current Ratio
  2. Operating Cash Flow to Current Liabilities
  3. Accounts Receivable Turnover Ratio
  4. Days Sales Outstanding
  5. Liabilities to Shareholders’ Equity Ratio
  6. Operating Cash Flow to Total Liabilities Ratio
• Section 3 – Interpretation of Ratios and Comparative Analysis
  Conduct a comparative analysis of Walmart and its selected competitor by addressing the following:
  3 a. Comparative Profitability and Risk Assessments
  1. Provide clear definitions for each profitability and risk analysis ratio calculated in Sections 1 and 2.
  2. Explain the significance of the profitability and risk analysis ratios for both Walmart and its competitor based on the calculations performed in Sections 1 and 2.
  3. For each profitability analysis ratio, identify which company is more profitable and justify your choice based on the profitability ratio.
  4. For each risk analysis ratio, determine which company carries a higher level of risk and explain the rationale based on the risk analysis ratio.
  5. 3 b. Recommendations for Enhancing Profitability
• Provide three strategic recommendations to the company that demonstrated lower profitability, suggesting ways to improve its financial performance.
  3 c. Recommendations for Risk Mitigation
  Offer three actionable recommendations to the company identified as riskier, outlining strategies to reduce its financial risk and enhance stability.

Requirement:

Requirements

• Please use Excel in Word Document to calculate all the ratios for sections 1 and 2.
  Inserting an Excel Spreadsheet into a Word Document.
  Step 1: Position the Cursor
  On the Word Document, place your cursor at the desired location where you want to insert the Excel table.
  Step 2: Insert an Excel Spreadsheet
  • Click on the "Insert" tab.
  • Select "Table."
  • Choose "Excel Spreadsheet."
• Step 3: Work with the Excel Spreadsheet
  • Use the embedded Excel Spreadsheet as needed.
  • Once finished, click anywhere in the Word document to embed the spreadsheet.
• Step 4: Edit the Embedded Spreadsheet
  To make further edits, double-click on the embedded Excel Spreadsheet to reopen and modify it.
  Additional Requirements.
• Submit the Word file (.doc or .docx) report by the assignment due date in Canvas.
• The final submission should be 5-8 pages long (excluding the title page, references, and appendices).
• The report should be formatted using Times New Roman in size 12, with double-spaced text and 1-inch margins on all sides.
• Please attach the 10-K report, a link to the financial statements, or a screenshot of the financial statements you used to the assignment submission.