Retail Marketing Case Study Analysis
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Transcript of Retail Marketing Case Study Analysis
Sears Roebuck & Co. vs. Walmart Stores
Case Analysis(Group 4: MBA-PR)
Background to the Case
Sears Roebuck & Co
• Founded in 1891• Made great strides in 1990s
to revive the fortunes • ROE of 22%• Offered flexible payment
facility : exclusive Sears Credit Card
Wal Mart Stores
• Founded in 1962• Acknowledged powerhouse
of US retail industry• ROE of 20%• DID Offered the facility of
Credit card with their Logo, but did not have a propriety Credit Card
The Financial Data are taken from the Balance Sheet of the respective companies to Compare and Identify which company is performing better
Financial Comparision
CURRENT RATIO=Current Assets/Current LiabilitiesIndicates ability to pay company’s obligations
Sears
1.943128562 (1997)1.902809365 (1996)
Wal-Mart
1.338312586 (1998)1.642146573 (1997)
As, Walmart’s current ratio is near to 1.5 (general acceptable value), the company has a good capacity to pay off its obligations.Also, not a very high value, it clearly indicates that the Company is using its liquidity to grow.
Financial Comparision
DEBT TO EQUITY RATIO =Total Liability/Shareholder EquityIndicates what portion of Equity & debt a company is using to
finance its assets.
Sears
5.601842375 (1997)6.313852376 (1996)
Wal-Mart
0.781494893 (1998)0.639153007 (1997)
As, Walmart’s Debt to Equity Ratio is Less than 1, which indicates that their assets are financed with equity and not Debt.
Financial Comparision
LEVERAGE RATIO=Long Term Debt/Shareholder EquityIndicates how much debt a company has.
Sears
2.229785056 (1997)2.46107179 (1996)
Wal-Mart
0.38863968 (1998)0.449687919 (1997)
As, Walmart’s Leverage Ratio is less than Sears & Co., which indicates that Walmart is comparatively lower in debt than Sears & Co.
Financial Comparision
RETURN ON INVESTMENT= Net Income/Shareholder EquityIndicates how much money the company is making for the
Investors
Sears
0.202661208 (1997)0.2570273 (1996)
Wal-Mart
1.905945946 (1998)0.178265181 (1997)
Though Walmart has lower ROI as compared to Sears in 1997, yet we can observe that Sears & Co. have their ROI decrement from 1996 to 1997, whereas Walmart has a considerable increment in ROI from 1997 to 1998 clearly indicating a better accelerating performance .
Financial Comparision
NET INCOME AS A % OF TOTAL REVENUE= (Net Income/Total Revenue) * 100
Sears
2.876791941 (1997)3.339113073(1996)
Wal-Mart
2.955598957 (1998)2.878185688 (1997)
As it is evident, Sears has a considerable decrement from 1996 to 1997, Walmart shows a consistent performance .
Financial Comparision
COMPARATIVE STUDY OF NET INCREASE OR DECREASE IN CASH & CASH EQUIVALENTS
Sears
-302(1997)54(1996)58 (1995)
Wal-Mart
564 (1998)800 (1997)38 (1996)
As it is evident, Sears has a considerable DECREASE in Cash & Cash Flow as compared to Walmart .
Financial Conclusion
As is evident, the above Financial Ratios clearly indicate that WALMART is financially performing Better than SEAR’S ROEBUCK & CO.
Group Members:
Aastha SinghJuanita Jocelyn
Mansi BaggaPooja Singh
Ruchi KothariSreeparna Maitra
Thank You