Course Project Tasks: Compile the information you have gathered on your companies in weeks 1-4 to answer the following questions. What is the relationship between your companies and their respective e
Running Head: ANALYSIS 0 Company Analysis: Walmart vs. Amazon.com Jessica Arroyo 2-22-2021 South University Company Analysis: Walmart vs. Amazon.com Key Characteristics In recent years, Walmart and Amazon.com have been considered one of the most successful businesses in and out of the United States. While Walmart operated in the retail industry, Amazon.com has focused more on electronic commerce, which has contributed to the latter’s significant prosperity. First, the food retail sector in the United States is a substantial contributor to the national economy, making the industry important. Walmart has close to 11,510 stores which play a core part in the overall operations of the company. Moreover, Walmart’s retail participation involves providing goods at low prices, including different services and an assortment of goods. Additionally, the three business segments that present Walmart’s retail industry operations include Sam’s Club, Walmart International, and Walmart US. On the other hand, Amazon.com carries out its electronic commerce activities based on cloud computing functions. Founded by Jeff Bezos, Amazon deals with several products, such as consumer electronics, books, videotapes, industrial supplies, beauty products, and other industrial items. Additionally, Amazon deals with online operations that involve the application of artificial intelligence aspects. In the United States, Amazon.com is considered the largest e-commerce player, with a significant revenue of $386.1 billion in 2020. Compared to Walmart, which registered a revenue of $524 billion in 2020, it is evident that Walmart made more in revenue than Amazon (Macrotrends, 2021). Commitment to Corporate Governance Today, many businesses take social and environmental responsibility seriously and execute these duties differently. For example, Amazon considers corporate governance a crucial part of its business operations. According to Amazon.com (2021), the organization takes significant consideration and focuses on customers because they are the industry’s most important parties. Secondly, Amazon.com also makes investments and other financial decisions based on long-term factors instead of short-term firm profitability. The e-commerce company also explores wise spending options to ensure they keep their lean culture and continuous enhancement of a culture that is cost-conscious (Amazon.com, 2021). Another characteristic of corporate governance in the firm entails focusing on the hiring and retention of highly qualified personnel for long-term performance. On the other hand, Walmart also displays a significant commitment to corporate governance. The company’s corporate governance considers the process important because it contributes to the creation of value. Walmart (2021) explains that the firm instills essential to respect and value for integrity, excellence, service, and individuals that influence its operations. The firm has a Board of Directors, which has crafted important directions for effective corporate governance. As an illustration, the board plays a vital role in Walmart’s corporate governance process (Walmart, 2021). In this sense, both Walmart and Amazon.com display a high commitment to corporate governance. Main Competitors The retail and electronic commerce industries experience one of the most notable competitions in business operations. Both Walmart and Amazon face significant competition from other companies. For example, Amazon faces competition from several multinational organizations, including Walmart, eBay, Alibaba, and Rakuten. On the contrary, Walmart’s main competitors include Home Depot, Costco, Amazon, and the Kroger Company (Pratap, 2020). However, despite the increased competition, Walmart and Amazon.com still manage to record high revenue. References Amazon.com. (2021). Corporate Governance. Retrieved 21 February 2021 from https://ir.aboutamazon.com/corporate-governance/default.aspx. Macrotrends. (2021). Walmart Revenue 2006-2021. Retrieved 21 February 2021 from https://www.macrotrends.net/stocks/charts/WMT/walmart/revenue. Pratap, A. (2020, August 23). Top Walmart Competitors in the US. Retrieved February 2021 from https://statstic.com/top-walmart-competitors-in-the-us/. Walmart. (2021). Governance. Retrieved 21 February 2021 from https://corporate.walmart.com/esgreport/governance.
Course Project Tasks: Compile the information you have gathered on your companies in weeks 1-4 to answer the following questions. What is the relationship between your companies and their respective e
Running head: FINANCIAL INFORMATION 0 Financial Information Jessica Arroyo 28-02-2021 South University Financial Information Income Statement Items Walmart vs. Amazon.com Income statements sometimes referred to as the profit and loss account, is a financial report that explores an organization’s expenses and revenues in a certain period of time. The statement also indicates the losses or profits of an organization, which are usually the income report’s bottom line. Investors usually explore several items on the income financial statement that can be used to assess a company’s capability and performance in an industry. Three items in the income statement that are important to investors include the earnings per share (EPS), operating expenses, and individual revenue. To begin with, Walmart had a revenue of 559.151 billion in the financial year ended 2021 January (Macrotrends, 2021). On the other hand, Amazon had revenue of $386.064 billion (Macrotrends, 2021). This information indicates that Walmart has a higher revenue compared to Amazon in the latest ended financial year. Secondly, Walmart’s operating expenses in the financial year ended 2021 January was $536.603 billion compared to Amazon’s $363.165 billion (Macrotrends, 2021). Walmart’s operating expenses are higher than that of Amazon.com based on the income statement information for the two companies. The third item on the income statement, which is the earnings per share (EPS), also presents a significant difference between Amazon and Walmart. For Amazon.com, the EPS on the ended the financial year 2020-2021 was $41.83. On the other hand, Walmart’s EPS for the same year was $4.75. In this case, Amazon has higher earnings per share than Walmart. Balance Sheet Items Investors can also use several balance sheet items to assess an organization’s potential, like Walmart or Amazon.com. Items such as property, plant, and equipment, accounts receivable, and cash. In the financial year January 2020 to 2021 January, the cash indicated in Amazon’s balance sheet was $84.396 billion compared to Walmart’s $17.741 billion (Macrotrends, 2021). Amazon had more cash at hand than Walmart based on the information from the firms’ balance sheet. Secondly, according to Macrotrends (2021), Walmart’s accounts receivable were $6.516 billion, while the accounts receivable for Amazon were $24.542 billion. The differences indicated between Walmart and Amazon present that both companies operate in different business ways. Another important item to note refers to the property, plant, and equipment of the companies. For Walmart, the property, plant, and equipment was $92.201 billion, while that of Amazon was $113.114 billion. Amazon had more cash at hand, property, plant, and equipment, and accounts receivable from the balance sheet information than Walmart. Balance Sheet and Income Statement Comparison The income statements and balance sheets for Amazon.com and Walmart are important reports to the company owners. An even more strong balance sheet will always back strong income financial statements. However, in certain situations, one might be stronger while the other one is weaker. While Amazon and Walmart’s income statements indicate the business performance for the last year, the balance sheets are associated with showing the two companies’ assets and liabilities. For example, Walmart’s liabilities were $164. 965 billion, while those of Amazon was $227.791 billion (Macrotrends, 2021). On the other hand, the total assets for Amazon based on the balance sheet were $321.195 billion, while the total assets for Walmart were $252.496 billion, which indicates the difference in liabilities and assets for the organizations. References Macrotrends. (2021). Amazon Balance Sheet 2005-2021 | AMZN. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/AMZN/amazon/balance-sheet Macrotrends. (2021). Amazon Income Statement 2005-2021 | AMZN. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/AMZN/amazon/income-statement Macrotrends. (2021). Walmart Balance Sheet 2005-2021 | WMT. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/WMT/walmart/balance-sheet Macrotrends. (2021). Walmart Income Statement 2005-2021 | WMT. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/WMT/walmart/income-statement
Course Project Tasks: Compile the information you have gathered on your companies in weeks 1-4 to answer the following questions. What is the relationship between your companies and their respective e
Running Head: WALMART AND AMAZON WALMART AND AMAZON PROJECT SUMMARY Jessica Arroyo South University 3-8-2021 Summary of the two companies Amazon has invested in the line of technology whereby it runs several operations such as cloud computing activities (Amazon.com). On the other hand, Walmart is a major retail distributor of different products not only in United States but also in other different countries around the world. The main similarity of the two companies is that they both depend on technology in order to reach out to as many clients as possible. For example, Amazon advertises its items all over the world and can deliver them effectively to the clients. Walmart on the other hand also reaches out to many clients all over the world through the online platforms. The companies have also invested in several countries hence widening their market size instead of depending only on the market that is available in the United States. The companies also have different investment approaches which are visible in their balance sheets, despite each of them being major market leaders, there is no common strategy of approaching the market. Both companies have also invested in different areas especially in human resources and also in the environment. Amazon ensures that it has employed and retailed the best employees while on the other hand, Walmart focuses on corporate governance. It has fostered activities such as ensuring that there is integrity, excellence and other factors that are meant to foster a conducive working environment. All this show that the companies possess a common strategy of investing in developing a positive working culture hence motivating the employees to give better results. The two companies have invested in highly competitive fields where they compete against each other especially when it comes to retailing electronics. They also have several other competitors both in United States and other parts of the world. However, they have been able to retain their profits through making several strategic steps and also in determining the most appropriate steps of approaching the competitive market. Financing Activities Walmart use shares as one of its financing activities, whereby it has set an attractive price of $41.83 per share. This is different from the $4.75 price per share that is being used by Amazon. To Walmart, the higher the shares that clients invest the higher the capital that will be available for making higher investments. (Macrotrends. 2021). Another financing strategy that is used by Walmart is through obtaining different types of resources from different producers in order to sell them on their behalf with a guaranteed profit on their investment. It also uses the strategy of borrowing cash which is to be returned on a long-term basis. This helped the company to retain a long-term flow of varies of products which are sold inform of retail in both online and physical Walmart outlets in different countries. Amazon also uses a similar strategy of acquiring different manufacturers of different technological products which it sells on its behalf with a guaranteed profit after the sales. This way, the company’s capital is not limited as different technological gadgets producers depend on it for the purpose of accessing a market in different parts of the world where Amazon has created market. The company also depends on shares although they are relatively cheap compared to those of Walmart. Investing Activities Walmart’s main investing activity is through the use of distribution strategy, whereby all its stores offer similar items and runs through similar processes. At the same time, the items sold in their shops are similar to those that are sold online. This distribution strategy has guaranteed clients that they will always get the right products despite of the method that they will use. Another key investing strategy that has been used by the company selling a variety of items. This has helped in creating a higher market as the client is always assured that they will get all their needs under one roof. The main strategy that is being used by Amazon is through ensuring that the price of products is cheaper than that of all other competing companies. These attractive prices tend to pool a large number of customers to the company hence increasing the amount of profit made. Amazon makes little profit per sold item but through selling several items, higher profits are made. Another strategy that Amazon uses is through investing in a future oriented strategy. It has invested in solving the needs of better technology hence attracting a higher number of clients who depends on the evolving use of technology such as cloud computing activities. Comparison of the Two Companies Walmart has invested more on the stocks which means that it possesses less cash in hand compared to Amazon. For example, in the year 2021 January, Amazon has a balance sheet of $84.396 billion while Walmart had $17.741 billion. Another major different between the two is on accounts receivable whereby Walmart had $6.516 billion while Amazon had $24.542 billion. This shows that the two companies use different approaches on their investment strategies. When it comes to the general setup and property investment of the company, Amazon has property, plant, and equipment worth $113.114 billion, while Walmart has similar property worth $92.201 billion. Walmart has less liabilities compared to those of Amazon has Amazon has liabilities worth $227.791 billion while those of Walmart are $164.965 billion. At the same time, Amazon has higher value total assets worth $321.195 billion compared to those of Walmart which are $252.496 billion. (Macrotrends. 2021). Opinion on the Strategies Amazon has invested more on its own property which is different from the strategy that has been used by Walmart. My opinion is that Walmart’s strategy seems to be yielding higher income current but then the strategy cannot be said to be sustainable. On the other hand, Amazon is future oriented as it is setting up equipment and strategies that will be effective in long term bases as future technological trends may depend on well-equipped organizations so that to enhance their productivity. References: Amazon.com. (2021). Corporate Governance. Retrieved 21 February 2021 from https://ir.aboutamazon.com/corporate-governance/default.aspx Macrotrends. (2021). Amazon Balance Sheet 2005-2021 | AMZN. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/AMZN/amazon/balance-sheet Macrotrends. (2021). Amazon Income Statement 2005-2021 | AMZN. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/AMZN/amazon/income-statement Walmart. (2021). Governance. Retrieved 21 February 2021 from https://corporate.walmart.com/esgreport/governance
Course Project Tasks: Compile the information you have gathered on your companies in weeks 1-4 to answer the following questions. What is the relationship between your companies and their respective e
6 Amazon and Walmart Jessica Arroyo South University Issues That Cannot Be Derived From Financial Statements Inflationary effects  Since the balance sheet’s assets and liabilities are not adjusted for inflation, they may seem to be overly low while inflation is strong. It is particularly true when it comes to long-term rentals (Costa et al., 2020). The purchasing power of goods and services is weakened over time by inflation. Savings from inflation is enhanced. The CPI is a standard inflation index that decreases with reduced demand. Other rivals in manufacturing, independent of a variety of reasons, will contribute to higher prices. Price delays would affect the markets when non-essential goods are fewer bought. Depending on expenditure form, inflation can be beneficial or harmful (Hagiu et al., 2020). The expense of cultivation is that of household inflation owing to landowners’ inflation. Inflation is the standard for central banks. Intangible objects are not registered Intangible properties are not considered money in the overwhelming majority of cases. On the other side, costs correlated with the production of intrinsic capital are automatically billed to pace. This policy has the potential to undervalue a business, especially one that has invested a significant amount of time and money in developing new products or developing a brand (Naujoks, 2020). It’s tough for companies who have created intellectual property but have yet to commercialize it.  Why These Issues Would Be of Concern to Investors and Other Stakeholders The management stresses that an index must be established in all industries between foreign and domestic marking activities. Marks are checked and updated regularly to fulfill the customer’s needs. And go to the business. Thus, the brand has no economic effect. For example, brand investments sometimes will not be exempt. Customer Experience in many companies is another essential product coherence—increased price and business spreads, including bid length. The procedures for the loan are so standard that businesses adopt it. Marketing professionals now understand that they so love their consumers. Applications are constantly monitored and implemented. Updates to customer emblem advice third parties regularly about their economic effects. When companies today search for a fair valuation on their subsequent buyers, this leads to lower costs. Providers are likely to need enormous demands and quickly decrease vendor and logistics competition. The group also increased its performance. A company’s earnings accounts or cash reserves will get muddled if a financial statement user looks at one reporting day. Due to seasonality or a spike in demand, a company’s operating output can vary from day to day (Kumhof et al., 2020). Examination of several financial records to get a thorough picture of recent results is required. Companies cannot be compared and contrasted. Keep in mind that different firms’ financial results would not be similar due to variations in accounting practices. Financial statement disclosures can be used to assist in the identification of genuine concerns. The management team of an organization will skew motivational outcomes. This dilemma occurs where there is an unjustified requirement to track unexpected results, such as when an incentive plan pays out if earnings improve. There could be grounds for alarm if the released figures are considerably more significant than the industry average. Amazon and Walmart Comparison in Terms of Performance In 2016, Amazon profited $135.7 billion, while Walmart’s sales increased to $482.13 billion. An enterprise with a well-stocked inventory has a higher actual valuation, meaning that Walmart’s financial security is equivalent to Amazon’s. Walmart pays minor on the lending program than Amazon to ensure that the company does not flood. The authors claim that Walmart is well-positioned in security investing, which Amazon is notoriously terrible (Jindal et al., 2021). According to the writers, Walmart’s debt ratio is around average in this sector, and Amazon has encouraged the River to leverage. The author believes that a significant downturn in the Walmart portfolio is less likely than that, based on the higher real-to-nominal asset ratio and higher risk control frameworks. References da Costa, F. M., Liu, C., Rosa, G. C., & Tiras, S. L. (2020). The effects of fair value on the matching of revenues and expenses: The case of asset revaluations. The International Journal of Accounting, 55(04), 2050019. Hagiu, A., Teh, T. H., & Wright, J. (2020). Should Amazon be allowed to sell on its own marketplace?. Available at SSRN 3606055. Jindal, R. P., Gauri, D. K., Li, W., & Ma, Y. (2021). Omnichannel battle between Amazon and Walmart: Is the focus on delivery the best strategy?. Journal of business research, 122, 270-280. Kumhof, M., Allen, J., Bateman, W., Lastra, R. M., & Omarova, S. T. (2020). Central Bank Money: Liability, Asset, or Equity of the Nation?. Naujoks, T. (2020). Marketing functions and B2C e-marketplaces: An exploratory analysis. Journal of Marketing Channels, 26(4), 250-262.