Wal-Mart Stores Inc. (WMT) | Short-term (Operating) Activity

Ratios (Summary)

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

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Turnover Ratios
Inventory turnover	10.64	10.90	11.54	12.21	11.63	10.65
Receivables turnover	68.87	74.76	82.33	97.74	102.75	102.50
Payables turnover	12.24	12.12	12.48	13.30	13.91	12.33
Working capital turnover	–	–	–	–	–	–
Average No. of Days
Average inventory processing period	34	33	32	30	31	34
Add: Average receivable collection period	5	5	4	4	4	4
Operating cycle	40	38	36	34	35	38
Less: Average payables payment period	30	30	29	27	26	30
Cash conversion cycle	10	8	7	6	9	8

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

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Wal-Mart Stores Inc.'s inventory turnover deteriorated from 2011 to 2012 and from 2012 to 2013.
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Wal-Mart Stores Inc.'s receivables turnover deteriorated from 2011 to 2012 and from 2012 to 2013.
Payables turnover	An activity ratio calculated as revenue divided by payables.	Wal-Mart Stores Inc.'s payables turnover declined from 2011 to 2012 but then slightly increased from 2012 to 2013.
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 2011 to 2012 and from 2012 to 2013.
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Wal-Mart Stores Inc.'s average receivable collection period deteriorated from 2011 to 2012 and from 2012 to 2013.
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Wal-Mart Stores Inc.'s operating cycle deteriorated from 2011 to 2012 and from 2012 to 2013.
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 increased from 2011 to 2012 but then slightly declined from 2012 to 2013.
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 2011 to 2012 and from 2012 to 2013.

Inventory Turnover

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data (USD $ in millions)
Net sales	466,114	443,854	418,952	405,046	401,244	374,526
Inventories	43,803	40,714	36,318	33,160	34,511	35,180
Inventory Turnover, Comparison to Industry
Wal-Mart Stores Inc.¹	10.64	10.90	11.54	12.21	11.63	10.65
Industry, Consumer Services	–	10.54	10.50	10.51	10.45	10.21

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

2013 Calculations

¹ Inventory turnover = Net sales ÷ Inventories
= 466,114 ÷ 43,803 = 10.64

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Wal-Mart Stores Inc.'s inventory turnover deteriorated from 2011 to 2012 and from 2012 to 2013.

Receivables Turnover

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data (USD $ in millions)
Net sales	466,114	443,854	418,952	405,046	401,244	374,526
Receivables, net	6,768	5,937	5,089	4,144	3,905	3,654
Receivables Turnover, Comparison to Industry
Wal-Mart Stores Inc.¹	68.87	74.76	82.33	97.74	102.75	102.50
Industry, Consumer Services	–	29.36	29.72	31.92	34.58	32.09

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

2013 Calculations

¹ Receivables turnover = Net sales ÷ Receivables, net
= 466,114 ÷ 6,768 = 68.87

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Wal-Mart Stores Inc.'s receivables turnover deteriorated from 2011 to 2012 and from 2012 to 2013.

Payables Turnover

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data (USD $ in millions)
Net sales	466,114	443,854	418,952	405,046	401,244	374,526
Accounts payable	38,080	36,608	33,557	30,451	28,849	30,370
Payables Turnover, Comparison to Industry
Wal-Mart Stores Inc.¹	12.24	12.12	12.48	13.30	13.91	12.33
Industry, Consumer Services	–	13.55	13.57	13.77	14.55	13.47

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

2013 Calculations

¹ Payables turnover = Net sales ÷ Accounts payable
= 466,114 ÷ 38,080 = 12.24

Ratio	Description	The company
Payables turnover	An activity ratio calculated as revenue divided by payables.	Wal-Mart Stores Inc.'s payables turnover declined from 2011 to 2012 but then slightly increased from 2012 to 2013.

Working Capital Turnover

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data (USD $ in millions)
Current assets	59,940	54,975	51,893	48,331	48,949	47,585
Less: Current liabilities	71,818	62,300	58,484	55,561	55,390	58,454
Working capital	(11,878)	(7,325)	(6,591)	(7,230)	(6,441)	(10,869)
Net sales	466,114	443,854	418,952	405,046	401,244	374,526
Working Capital Turnover, Comparison to Industry
Wal-Mart Stores Inc.¹	–	–	–	–	–	–
Industry, Consumer Services	–	59.27	36.23	35.35	38.82	93.08

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

2013 Calculations

¹ Working capital turnover = Net sales ÷ Working capital
= 466,114 ÷ -11,878 = –

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

Average Inventory Processing Period

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data
Inventory turnover	10.64	10.90	11.54	12.21	11.63	10.65
Average Inventory Processing Period (no. of days), Comparison to Industry
Wal-Mart Stores Inc.¹	34	33	32	30	31	34
Industry, Consumer Services	–	35	35	35	35	36

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

2013 Calculations

¹ Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 10.64 = 34

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 2011 to 2012 and from 2012 to 2013.

Average Receivable Collection Period

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data
Receivables turnover	68.87	74.76	82.33	97.74	102.75	102.50
Average Receivable Collection Period (no. of days), Comparison to Industry
Wal-Mart Stores Inc.¹	5	5	4	4	4	4
Industry, Consumer Services	–	12	12	11	11	11

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

2013 Calculations

¹ Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 68.87 = 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.	Wal-Mart Stores Inc.'s average receivable collection period deteriorated from 2011 to 2012 and from 2012 to 2013.

Operating Cycle

No. of days

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data
Average inventory processing period	34	33	32	30	31	34
Average receivable collection period	5	5	4	4	4	4
Operating Cycle, Comparison to Industry
Wal-Mart Stores Inc.¹	40	38	36	34	35	38
Industry, Consumer Services	–	47	47	46	45	47

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

2013 Calculations

¹ Operating cycle = Average inventory processing period + Average receivable collection period
= 34 + 5 = 40

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 2011 to 2012 and from 2012 to 2013.

Average Payables Payment Period

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data
Payables turnover	12.24	12.12	12.48	13.30	13.91	12.33
Average Payables Payment Period (no. of days), Comparison to Industry
Wal-Mart Stores Inc.¹	30	30	29	27	26	30
Industry, Consumer Services	–	27	27	27	25	27

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

2013 Calculations

¹ Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 12.24 = 30

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 increased from 2011 to 2012 but then slightly declined from 2012 to 2013.

Cash Conversion Cycle

No. of days

	Jan 31, 2013	Jan 31, 2012	Jan 31, 2011	Jan 31, 2010	Jan 31, 2009	Jan 31, 2008
Selected Financial Data
Average inventory processing period	34	33	32	30	31	34
Average receivable collection period	5	5	4	4	4	4
Average payables payment period	30	30	29	27	26	30
Cash Conversion Cycle, Comparison to Industry
Wal-Mart Stores Inc.¹	10	8	7	6	9	8
Industry, Consumer Services	–	20	20	20	20	20

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

2013 Calculations

¹ Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 34 + 5 – 30 = 10

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 2011 to 2012 and from 2012 to 2013.