Essay: Financial and Trend Analysis of Wal-Mart

Sample Essay

The financial and trend analysis of a company is quite helpful in evaluating a company’s strengths and weaknesses and making investment decisions. This analysis not only helps investors in evaluating the growth prospects of an investment but also provides investment options based on interest or dividends. If this analysis is carried out using a group of companies in an industry as a comparison a more feasible and valid conclusion can be derived from the analysis.

The analysis carried out in this report involves two companies from the retailing industry which are Target Corporation and Wal-Mart Stores Inc. The comparative financial ratio analysis of these companies indicates that both of these companies have their respective strengths and weaknesses. Wal-Mart is quite healthier in terms of asset management and debt management while Target is stronger in the areas of liquidity and profitability. Wal-Mart is a better alternative for investors seeking interest based returns and long time growth while Target is a viable option for investors considering dividend and capital gain based returns. The comparative trend analysis of the two companies with each other and with the S&P 500 Index indicates that the share prices of Target are closely linked with movements in the S&P 500 Index while the share prices of Wal-Mart indicate a higher level of stability as compared to the share prices of Target and the fluctuations in the S&P 500 Index.

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