Running head: FINANCIAL STATEMENT ANALYSIS
Financial Statement Analysis
Warren Fitzpatrick, Martin Carlson, Zameer Agarwal, & Justine Collado
Centenary College
Financial Statement Analysis
Best-in-Class vs. Distressed
The success of Walmart is impressive. They have made business history in the retail industry with their remarkable revenue and expansion statistics. As they have flourished, others have fallen by the wayside. Kmart is one of the firms seemingly left in the wake of the Walmart steamroller. But Kmart is not dead. They may be wounded, but not mortally so. Kmart, after filing for bankruptcy, restructuring, and partnering with Sears - perhaps another distressed company example - remains viable; although still highly vulnerable. Before the advent of Walmart expansion, Kmart was in a position of marketplace dominance. Now, they are struggling just to survive.
This paper provides a financial statement analysis of two firms over the most recent three years reported. Walmart represents a best-in-class example, while the statistics of Sears Holdings Corporation serves as the contrasting model of a distressed company. SHLD figures include Sears, Roebuck and Co., and Kmart. Considering total store counts, Kmart represents 37% of SHLD. For a full-line stores comparison, Kmart’s portion of SHLD is 61% (Sears Holdings Corporation, 2008). In addition to the comparisons of these two selected companies, certain financial ratios are analyzed with regards to the available industry norm figures. Cash flow statements of the two selected companies are also scrutinized. Utilizing the stated analyses, the reasons for the companies’ current conditions are discussed, along with recommendations for both the best-in-class and distressed firm examples.
Financial Statement Analysis
Financial statement analysis is provided with the aid of key financial ratios calculated from the balance sheet, income statement and statement of cash flows from the...