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Free «Financial Forecasting for WalMart» Essay Sample

The PowerPoint presentation consists of 6 slides. The first, introductory slide identifies the topic: “Financial forecasting for Walmart”. The following 5 slides focus on the achievements in the company’s net sales in 2007-2011 and on various factors that affect Walmart’s profitability and seem essential for adequate financial forecasting. The second slide centers on analysis of Walmart’s financial statements for the period of the last five years. This is considered important for correct prediction of the future trends. The analysis has helped to reveal that the major trend for Walmart for the period between 2007 and 2011 was the overall growth of its net sales by 17.7%, which however, was not consistent from year to year. On average, the rate of increase was 2.52% annually, yet the per cent were distributed unevenly between the years. To illustrate, back in 2007  the net sales increased by 11.60%; in 2008, the growth rate was 8.40%; in 2009, the increase in net sales equaed 7.30%; in 2010, the net sales increased by 1%, and, finally, in 2011, the growth rate increase was 3.40%. Thus, the yearly increase varied from year to year, with its lowest point in 2010 and its highest point in 2007. Since 2007, the increase in sales gradually went down, with 3.40% growth in net sales as the final figure for the period 2007-2011.

 
 
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Analysis of factors that facilitated the success and profitability of Walmart has helped to reveal positive changes in the period between 2007 and 2011. The biggest positive change was found to have been for the company’s equipment, property, as well as capital lease assets value (+18.2%); other figures for positive changes in factors that account for Walmart’s success and profitability were goodwill (+17.9%), total assets value (+16.3), investing the inventories (+8.49%), and gross profit margin (+5.26).

It has been established that three major factors are likely to influence the profitability of the company in the period between 2013 and 2017. These are, above all, the economic downturn and inflation. Also, expectedly, the gradual decrease in surplus of the net sales will affect the rate of company’s profitability, as well as the increase of transportation costs.

The optimal five-year plan for Walmart is to increase the yearly net sale surplus, as well as reduce operating expenses. It is also planned to reduce construction costs for the new stores and increase investment into technologies. Simultaneously, it is planned that the company will multiply the number of its stores and open new stores overseas (for example, in Asia and Europe).

The financial forecast for the company for the period of the next five years is based on the analysis of Walmart’s performance and some other economic factors back in 2007-2011. Predictably, the growth of the net sales will be rather steady: 3% in 2013, 4.50% in 2014, 5.20% in 2015, 7.30% in 2016, and 8.00% in 2017. 

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