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Walmart Versus Macy

This document compares key financial metrics for Walmart and Macy's. Walmart performs better in areas like return on assets, asset turnover, inventory turnover, and cash-to-cash cycle. However, Macy's performs better in return on equity, financial leverage, profit margin, accounts receivable turnover, and accounts payable turnover. Overall, the document finds that Walmart has more efficient operations and inventory management, while Macy's is more profitable and efficient in accounts receivable and payable.

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Melissa S Andersen
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187 views2 pages

Walmart Versus Macy

This document compares key financial metrics for Walmart and Macy's. Walmart performs better in areas like return on assets, asset turnover, inventory turnover, and cash-to-cash cycle. However, Macy's performs better in return on equity, financial leverage, profit margin, accounts receivable turnover, and accounts payable turnover. Overall, the document finds that Walmart has more efficient operations and inventory management, while Macy's is more profitable and efficient in accounts receivable and payable.

Uploaded by

Melissa S Andersen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Melissa S Andersen

Case Study: Financial Statements for Walmart Stores Inc. and Macy’s Inc.

Comparison of financial matrices of Walmart and Macy’s

WALMART METRICS MACY’S


21.72% RATE OF EQUITY (ROE) 24.55%
9.46% RATE OF ASSETS (ROA) 8.28%
12.26% RATE OF FINANCIAL LEVERAGE 16.27%
5.96% ACCOUNTS PAYABLE TURNOVER 3.38%
2.77% PROFIT MARGIN 4.36%
2.31% ASSET TURNOVER 1.33%
69.32% ACCOUNTS RECEIVABLE TURNOVER 75.29%
.75% COLLECTING MONEY FROM SALES (WEEKS) .69%
8.05% INVENTORY TURNOVER 3.15%
6.46% INVENTORY SAT WITH FIRM (WEEKS) 16.51%
4.02% PROPERTY, PLANT, AND EQUIPMENT TURNOVER 3.41%
-1.52% CASH TO CASH CYCLE (WEEKS) 1.82%

Walmart performs better on:

 Rate of assets: Walmart’s management is more efficient at using it’s assets to generate earnings
than Macy’s.
 Asset Turnover: Having higher Inventory turnover, and property, plant, and equipment turnover,
Walmart therefore has better Asset turnover.
 Inventory Turnover: Walmart’s Inventory Turnover is higher than Macy’s implying that Walmart
has better inventory management as well.
 Cash to Cash cycle: Walmart has more time to collect money from sales before paying suppliers
then Macy’s. The information and sourcing drivers help a firm to perform better, increase
efficiency, improve responsiveness, and reduce cost of firm.
 Property, Plant, and Equipment Turnover: Walmart in PPET and C2C. Facilities play a crucial role
in that Walmart needs less storage space compared to Macy

Macy’s performs better on:

 Rate of Equity: In the view of the shareholder, Macy’s has more return of investment by
shareholder equity than Walmart does.
 Rate of Financial Leverage: Macy’s out performance in ROE and ROA create this.
 Profit Margin: because Macy’s has a lower asset turnover, return of assets, and return of equity
than Walmart, they are more profitable.
 Accounts Receivable Turnover: Macy’s can collect more quickly than Walmart
 Accounts Payable Turnover: Macy’s has better accounts payable turnover than Walmart. Profit
Margin, accounts receivable turnover, accounts payable turnover are transportation cost and
cost of goods.

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