Investment Analysis Paper
The publicly traded company selected for this investment analysis paper is Walmart Stores, Inc. Walmart, an American multinational retail firm, is the largest retail chain worldwide by revenue. In particular, the global organization operates as a chain of grocery stores, hypermarkets, together with markdown department stores. The retailer was founded in the 1960s and has over the years extended its operations to more than 25 countries across the world, including North America, Latin America, Europe, and Asia. Walmart is also one of the most valuable firms in the world.
Evaluation of Walmart’s Board of Directors
Walmart Stores, Inc.’s board of directors have a great monitoring potential of assessing and examining the business operations. The amalgamation of the set of skills and the qualifications of the board members makes it possible to perceive that the board is in a great position to offer efficacious oversight and strategic guidance to the management of the company. Presently, there are 11 board members, 10 of who have senior level of leadership. With respect to strategy, there are four key areas in which the board considers oversight, which include retail, marketing or brand management, technology or e-commerce, and global business. It is imperative to note that in each of these areas, there are at least three board directors that offer oversight and monitoring with great expertise and specialty. More importantly, in the areas of governance, there is legal as well as finance and accounting, both of which have five board members who offer insight and guidance to the management of the company (Walmart, 2017).
Board representation ought to equitably mirror the trust that the society at large vests in a huge company such as Walmart Stores, Inc. with the authority to significantly influence the lives of several people within and outside the company. The manner in which Walmart’s board of directors is structured has both its strengths and weaknesses. One of the strengths is that the members of the board is made up of people who cooperatively provide a fitting poise of renowned and notable leadership, diverse perspectives, strategic set of skills, and specialized experience pertinent to the company’s business operations and strategic goals and objectives. All of them are carefully selected on the basis of excellent accomplishment in their professional careers, extensive experience and understanding, individual and professional reliability, capability to make self-determining, systematic inquiries, experience and comprehension of the business setting, preparedness and capability to dedicate sufficient time to Board responsibilities (Walmart, 2017). Another advantage is that in the past financial year, Walmart’s self-examination gave rise to altering the structure of the Board committees. In the previous financial years, the company had only one committee that was dedicated to the extensive scope of executive compensation, selections of the directors and governance. In the contemporary setting, these responsibilities and duties have presently been separated between two different committees, one being the Compensation and Management Development Committee and the other one being the Nominating and Governance Committee. The strong suit to this is that it brings about greater emphasis on management development in addition to the appointment and refreshment of the Board (Walmart, 2017). However, it is imperative to note that there are shortcomings and weaknesses. One of the downsides is that the board members constituted of 15 individuals, which made the process of decision making quite time consuming. At the same time, it is imperative to note that the board consists of three members who are part of the owning family, who are not necessarily experienced in a professional sense and therefore deemed not to make sensible decisions (Walmart, 2017).
Review of Income Statements and Balance Sheets
Walmart faces significant competition in the market from Target. In particular, Target is the second biggest discount store retailer in the United States, with Walmart taking the top spot. In the contemporary market, the company operates just over 1,800 retail stores all across the nation. In particular, Walmart finds its success in the market through the use of low prices as a strategy whereas its key competitor, Target, seeks to appeal to consumers that are younger and are conscious of their image. All investors wish to make the most of the returns on their investments in an organization. The return for an investor is measured by the return on equity. In particular, a DuPont analysis offers discernment and understanding into how a firm’s return on equity was generated through the breakdown of the return into three elements, which comprise...
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Walmart Store Inc. is a worldwide retail company that runs a chain of grocery stores, discount department stores as well as hypermarkets. The corporation was established in the year 1962 by Sam Walton and became incorporated seven years later. Since then, the company has expanded into international business and has over eleven thousand stores is 28 nations around the globe. The company is split into three key segments. These are
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Once this take place, it means that the overall inflation rate will begin to rise sharply. (Seabury) in the case of Wal-Mart, they have been affected by higher fuel prices, in delivering goods to local stores. However, the company has found a way to keep their fuel costs as low as possible. Currently, they have been contracting out delivery services, from the manufacturer to its different distribution centers. What
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