Several Characteristics of Supermarket Industry from Financial Statement -- Simple Analysis Based on Walmart, etc.

Abstract

In modern society, “supermarket” is not an alien concept. Supermarkets appear everywhere and bring convenience to people. When searching and calculating the financial data of supermarket industry and learning it as a kind of business models, some characteristics of their financial data can be seen, which are very different from the normal figures of other industries. However, seldom specialized studies can be found directly. In this article, the author is trying to discuss several categories of financial data briefly, for the analysis on evaluating a company’s performance. Taking Walmart as a major example, the article mainly focuses on the profitability and liquidity of the Company, and choose some typical ratios to explain the differences. For the supermarkets, according to the special strategies and operating methods, the ROS and ROE data are not as high as other industries. Besides, for those large retailers, the current ratio and quick ratio data are far lower than average. Whereas, the inventory holding periods and working capital cycles are much shorter. When these characteristics are shown, it may indicate that the supermarket has well cost control, good profitability, strong power of bargain and high operating efficiency. However, they are not the only-needed elements. It is still necessary for people to take other measurement as evaluating a company.