Short-term (Operating) Activity Analysis


Ratios (Summary)

Wal-Mart Stores Inc., short-term (operating) activity ratios

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Turnover Ratios
Inventory turnover 7.98 8.05 8.23 8.68 9.19 8.87
Receivables turnover 70.85 68.87 74.76 82.33 97.74 102.75
Payables turnover 9.57 9.26 9.15 9.40 10.00 10.61
Working capital turnover
Average No. of Days
Average inventory processing period 46 45 44 42 40 41
Add: Average receivable collection period 5 5 5 4 4 4
Operating cycle 51 50 49 46 44 45
Less: Average payables payment period 38 39 40 39 36 34
Cash conversion cycle 13 11 9 7 8 11

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Wal-Mart Stores Inc.'s inventory turnover deteriorated from 2012 to 2013 and from 2013 to 2014.
Receivables turnover An activity ratio equal to revenue divided by receivables. Wal-Mart Stores Inc.'s receivables turnover deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Wal-Mart Stores Inc.'s payables turnover increased from 2012 to 2013 and from 2013 to 2014.
Working capital turnover An activity ratio calculated as revenue divided by working capital.
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Wal-Mart Stores Inc.'s average inventory processing period deteriorated from 2012 to 2013 and from 2013 to 2014.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Wal-Mart Stores Inc.'s operating cycle deteriorated from 2012 to 2013 and from 2013 to 2014.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Wal-Mart Stores Inc.'s average payables payment period declined from 2012 to 2013 and from 2013 to 2014.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Wal-Mart Stores Inc.'s cash conversion cycle deteriorated from 2012 to 2013 and from 2013 to 2014.

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Inventory Turnover

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Cost of sales 358,069  352,488  335,127  315,287  304,657  306,158 
Inventories 44,858  43,803  40,714  36,318  33,160  34,511 
Inventory Turnover, Comparison to Industry
Wal-Mart Stores Inc.1 7.98 8.05 8.23 8.68 9.19 8.87
Industry, Consumer Services 7.87 7.94 7.88 7.84 7.75

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Inventory turnover = Cost of sales ÷ Inventories
= 358,069 ÷ 44,858 = 7.98

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Wal-Mart Stores Inc.'s inventory turnover deteriorated from 2012 to 2013 and from 2013 to 2014.

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Receivables Turnover

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Net sales 473,076  466,114  443,854  418,952  405,046  401,244 
Receivables, net 6,677  6,768  5,937  5,089  4,144  3,905 
Receivables Turnover, Comparison to Industry
Wal-Mart Stores Inc.1 70.85 68.87 74.76 82.33 97.74 102.75
Industry, Consumer Services 22.18 20.82 21.01 22.12 22.58

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Receivables turnover = Net sales ÷ Receivables, net
= 473,076 ÷ 6,677 = 70.85

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Wal-Mart Stores Inc.'s receivables turnover deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.

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Payables Turnover

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Cost of sales 358,069  352,488  335,127  315,287  304,657  306,158 
Accounts payable 37,415  38,080  36,608  33,557  30,451  28,849 
Payables Turnover, Comparison to Industry
Wal-Mart Stores Inc.1 9.57 9.26 9.15 9.40 10.00 10.61
Industry, Consumer Services 8.29 8.26 8.22 8.65 9.20

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Payables turnover = Cost of sales ÷ Accounts payable
= 358,069 ÷ 37,415 = 9.57

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Wal-Mart Stores Inc.'s payables turnover increased from 2012 to 2013 and from 2013 to 2014.

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Working Capital Turnover

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Current assets 61,185  59,940  54,975  51,893  48,331  48,949 
Less: Current liabilities 69,345  71,818  62,300  58,484  55,561  55,390 
Working capital (8,160) (11,878) (7,325) (6,591) (7,230) (6,441)
Net sales 473,076  466,114  443,854  418,952  405,046  401,244 
Working Capital Turnover, Comparison to Industry
Wal-Mart Stores Inc.1
Industry, Consumer Services 30.59 23.34 23.57 20.91 30.30

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Working capital turnover = Net sales ÷ Working capital
= 473,076 ÷ -8,160 = –

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital.

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Average Inventory Processing Period

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data
Inventory turnover 7.98 8.05 8.23 8.68 9.19 8.87
Average Inventory Processing Period (no. of days), Comparison to Industry
Wal-Mart Stores Inc.1 46 45 44 42 40 41
Industry, Consumer Services 46 46 46 47 47

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 7.98 = 46

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Wal-Mart Stores Inc.'s average inventory processing period deteriorated from 2012 to 2013 and from 2013 to 2014.

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Average Receivable Collection Period

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data
Receivables turnover 70.85 68.87 74.76 82.33 97.74 102.75
Average Receivable Collection Period (no. of days), Comparison to Industry
Wal-Mart Stores Inc.1 5 5 5 4 4 4
Industry, Consumer Services 16 18 17 17 16

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 70.85 = 5

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd.

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Operating Cycle

No. of days

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data
Average inventory processing period 46 45 44 42 40 41
Average receivable collection period 5 5 5 4 4 4
Operating Cycle, Comparison to Industry
Wal-Mart Stores Inc.1 51 50 49 46 44 45
Industry, Consumer Services 62 64 63 64 63

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 46 + 5 = 51

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Wal-Mart Stores Inc.'s operating cycle deteriorated from 2012 to 2013 and from 2013 to 2014.

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Average Payables Payment Period

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data
Payables turnover 9.57 9.26 9.15 9.40 10.00 10.61
Average Payables Payment Period (no. of days), Comparison to Industry
Wal-Mart Stores Inc.1 38 39 40 39 36 34
Industry, Consumer Services 44 44 44 42 40

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 9.57 = 38

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Wal-Mart Stores Inc.'s average payables payment period declined from 2012 to 2013 and from 2013 to 2014.

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Cash Conversion Cycle

No. of days

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data
Average inventory processing period 46 45 44 42 40 41
Average receivable collection period 5 5 5 4 4 4
Average payables payment period 38 39 40 39 36 34
Cash Conversion Cycle, Comparison to Industry
Wal-Mart Stores Inc.1 13 11 9 7 8 11
Industry, Consumer Services 18 20 19 22 23

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 46 + 5 – 38 = 13

Ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Wal-Mart Stores Inc.'s cash conversion cycle deteriorated from 2012 to 2013 and from 2013 to 2014.

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