Financial Statement Analysis

Unit 9 [MT482]

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Unit 9 Assignment: Comprehensive Financial Analysis

In this assignment, you will be assessed based on the following outcomes:

MT482-6: Determine the value of a company through conducting effective earnings forecasts and analysis.

GEL-1.02: Demonstrate college-level communication through the composition of original materials in Standard English.

This is a challenging activity. You should prepare to spend substantial time working on your

response.

In this research paper, you will dig deep into the financial statements of Walmart. You will analyze

the company’s past financial performance to help you forecast their future business, profitability,

and cash flow. You will use these results to forecast the value of the company; what YOU think the

company is actually worth today. You will compare your value to the current stock price, explaining

any differences.

This is how decisions to buy and sell stock, and to buy and sell companies are made every day all

over the world. The nightly business news is full of the “buy, sell, and hold” recommendations

derived from analysis like this. I bet those jobs pay very nicely, don’t you!

Your paper must include the following criteria in addition to a title and references page:

● Executive Summary: This is a 1-page summary of the entire paper that highlights the key

results of your analysis and the resulting conclusions, and a summary of their defense.

● Table of Contents: List of the sections in your paper.

● Introduction: The company’s story- past, present, future. Include who they are (include

current events and interesting facts), what do they do (products), when they began (how

long), and where they do business. Discuss the markets they operate in globally, the current

market trends, and their competitors. (This should be at least 2- pages, likely more.)

● Financial History: (3-year analysis of the company’s performance. Your report will include

the ratio results plus an explanation and analysis of each ratio. Include the ratio, its results,

and what the results mean for the company. (Liquidity and Debt, Asset Management,

Profitability, and Market ratios. See ratio detail below.) Were there changes in the ratios?

What could have caused the change? You must include an evaluation section of what each

type of (LAPM) ratio means over the three years, then an overall comparison to validate

your conclusion. (Show you understand and know the ratios.)

● Financials Today: Current year with comparison to a competitor. What are they doing?

How are they doing now? Add current events and focus on the current financials. Include an

evaluation for each type of (LAPM) ratio for the current year, then an overall comparison to

validate your conclusion. Include your findings for your competitor.

● Financial Future: The story behind your analysis of your forecast of the future based on

your spreadsheet. Why did you choose the specific growth rates? What impact did they

have on the value of Walmart? Use the Walmart Proforma Income Excel spreadsheet

located in Course Documents.

Unit 9 [MT482]

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● Conclusion: Your recommendation with justification of how much Walmart is worth. How

much do you forecast each share to be worth? Defend your choice.

Required Ratio Analyses

Liquidity and Debt Ratios (L) • Current • Quick

• Total Debt to Total Asset Asset Management Ratios (Activity A)

• Inventory Turnover

• Fixed Asset Turnover • Total Asset Turnover

Profitability Ratios (P)

• Profit Margin on Sales • Return on Assets • Return on Equity

Market Value Ratios (M) • Price Earnings Ratio • Market/Book

Start your Walmart research at the website below. Click on everything and explore. This website

will be the sole source of financial information for this assignment.

Walmart, Inc. (n.d.). Retrieved from https://www.msn.com/en-us/money/stockdetails/financials/fi-

126.1.WMT.NYS

This assignment requires the following in addition to the criteria above:

● Submit your paper in a Microsoft Word® document. Include a title page with your name, course

number, instructor name, date, subject, and include a brief statement that you (and you alone)

produced the paper. Further format details will be provided by your instructor.

● Submit your completed Walmart Proforma Income spreadsheet to the Dropbox.

● Respond to the questions in a thorough manner, providing specific examples of concepts,

topics, definitions, and other elements asked for in the questions. Your paper should be highly

organized, logical, and focused.

● Your paper must be written in Standard English and demonstrate exceptional content,

organization, style, and grammar and mechanics.

● Your paper should provide a clearly established and sustained viewpoint and purpose.

● Your writing should be well ordered, logical and unified, as well as original and insightful.

● A separate page at the end of your research paper should contain a list of references, in current

APA style. Use your textbook, the Library, and the internet for research.

● Be sure to cite in-text citations were appropriate and reference all sources. Your sources and

content should follow proper current APA style. Review the APA formats found in the Writing

Center accessed through the Academic Success Center within the Academic Tools area of the

course. (Your paper should include a title page, paper is double-spaced, in Times New Roman

Unit 9 [MT482]

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12-point font, correct citations, Standard English with no spelling or punctuation errors, and

correct references on the references page.)

● Clear business writing; spelling and grammar acceptable; effective use of current APA style;

followed the required format and instructions.

● Include the elements detailed in the rubric below.

Directions for Submitting Your Assignment

● Compose your paper in a Microsoft Word document and save it as Username- MT482

Assignment-Unit 9.docx (Example: TAllen- MT482 Assignment Unit 9.docx). Submit your

document to the Unit 9 Assignment Dropbox by the end of the unit.

● Submit your Microsoft Excel file as a separate submission by selecting the Unit 9 Assignment

Dropbox by the end of the unit.

Unit 9 Assignment: Comprehensive Financial Analysis Points Possible

Points Earned

Content, Analysis, and Effective Writing Skills

Executive Summary: Provided a 1- page summary of the paper that highlights the key results of your analysis and the resulting conclusions

and a summary of their defense.

10

Table of Contents: Lists the sections in the paper and page numbers. 5

Introduction: Provided a minimum 2- page history of Walmart: who they are, where they are, and what do they do. Detailed the markets they serve globally, the current market trends they face, and the nature of

their competitors.

20

Financial History: Detailed evaluation and analysis for a 3-year history:

Included charts of the ratios reviewed using the format in the provided spreadsheet. Included a written analysis of the ratios that have been calculated including a detailed description of the meaning and uses of

each ratio.

10

Correct calculation of the specific ratios required: Liquidity and Debt Ratios (L)

5

Asset Management Ratios (Activity) (A) 5

Profitability Ratios (P) 5

Market Ratios (M) 5

Financials Today: Included detailed financial analysis of the current year of the company and the industry or a key competitor comparing and contrasting the results of the company versus the industry or competitor.

10

Correct calculation of the specific ratios required:

Liquidity and Debt Ratios (L)

5

Asset Management Ratios (Activity) (A) 5

Profitability Ratios (P) 5

Market Ratios (M) 5

Unit 9 [MT482]

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Unit 9 Assignment: Comprehensive Financial Analysis Points

Possible

Points

Earned

Financial Future: Prepared a forecast of the income statement for a 5-

year horizon and a terminal value using the Excel spreadsheet provided

in Course Documents. Analysis that determined the various growth rates

required, the terminal value multiplier (PE Ratio), the cost of capital, and

the current number of shares outstanding.

15

Conclusion: Prepared a thorough defense of the estimated value of the

company’s common stock per share using the valuation analysis and

procedures provided in the Excel spreadsheet. Explained the financial

future of Walmart and suggested actions they might take to improve or

ensure the predictions.

15

Exhibited strong critical thinking and appropriate analysis throughout the

paper.

10

Sentences are clear, concise, and direct; tone is appropriate.

Grammatical skills are strong with almost no errors per page. Paper

includes a clearly established and sustained viewpoint and purpose,

written in Standard English and demonstrates exceptional content,

organization, style, and mechanics. Paper follows current APA style, and

follows the criteria given in the paper. Including all content this paper

should approach 20- pages.

10

Total Points 145