The operating expenses for Walmart Inc. were recorded as $ 97,041,000,000 in the financial period of 2016 (Walmart Inc., 2018). The operating costs in the company rose to $ 101,853, 000,000 in the financial year 2017 (Walmart Inc., 2018). The increase in the operating expenses was attributed to the rise in the investments at the company and the inefficiency of the cost-saving plans that the company had previously invested. Increasingly, more money was being used to get the operations of the company going (Walmart Inc., 2018). Looking at the trends in the financial statements of Walmart is necessary in this case regarding the study of the financial health of the company and what can be done internally to ensure that the company spends less money in the investment and gets more money in return after the sales are made.
The current ratio of Walmart in 2016 was recorded at 0.86 (Walmart Inc., 2018). The current ratio of the company reduced towards 2017 and stood at 0.76 (Walmart Inc., 2018). The current ratio of the company is an indicator of its ability to make use of the current assets in settling its current liabilities. The reduction in the current ratio is, therefore, an indicator of the reduced capability of the company to use the liquid assets to cater for the company's financial obligations. The reduction in the current ratio was because of the decrease in the current assets of the company and the increase in the current liabilities of Walmart. The continuation of such a trend would reduce Walmart's ability to take care of its obligations.
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The financial activities found in the statement of cash flows for Walmart in 2017 were as follows. The first one was the payment of dividends. The company has to pay the dividends to the shareholders that contributed money to the investment of the company's projects. The second activity in the statement of cash flows is the net borrowings. The company may find it necessary to borrow a particular amount of money to facilitate its business operations from the financial lending institutions in the USA and the other countries across the globe. The third activity is the sale purchase of stock. The shareholders of the company provide the company with stock during investment. After a period, the stock might be sold to provide cash for the payment of the dividends as well as the investment into other projects.
Walmart has the following classes of stock. The first one is the common stock (Walmart Inc., 2018). The common stock reduced from 2016 to 2017 at the company. The other class is the capital in excess per value (Walmart Inc., 2018). The company recorded an increase in the same from the fiscal year 2016 towards 2017. The retained earnings are the other class of stock at Walmart. The retained earnings slightly reduced in 2017 from the financial year 2016 (Walmart Inc., 2018). The other category of stock in the company is the accumulated other comprehensive loss. The company paid the dividends in 2017 to its shareholders. The share price at Walmart in July 2017 was $ 75.36 per share (Walmart Inc., 2018). The details of the stock can be found on the statement of financial position, which comprises of the balance sheet.
It is advisable to invest in the stock of Walmart. Firstly, the company has had an increase in the revenue collected from the sale of goods. That is an indicator of the increasing intensity of the investment process in the company. The company has had a projected increase in financial performance despite the reduction in the current ratio from 2016 to 2017. The increase in the total shareholders' equity in the company was further an indicator of the increase in the company's stock valuation. That was brought about by the increase in the price of a share at Walmart in 2017 compared to 2016.
References
Walmart Inc. (2018). Financial information . Retrieved from http://s2.q4cdn.com/056532643/files/doc_financials/2017/Annual/WMT_2017_AR-(1).pdf
