Highlights in Business, Economics and Management FTMM 2022

Volume 5 (2023)

Wal-Mart's Financial Analysis

Runhan Dong*
International Curriculum Center of Jinan Foreign Language School, Jinan, China
* Corresponding author: [email protected]
Abstract. Due to the impact of the epidemic, e-commerce is developing very rapidly. Under such a
circumstance, this article would like to choose a company that may be greatly affected by the
epidemic and starts an e-commerce business Under the pressure of the epidemic. After my
understanding of e-commerce at home and abroad, this article finally chooses Walmart as the
research object of this project. In this essay, this article used SWOT economic analysis to describe
WalMart's development speed, development potential, and business barriers in recent years. After
the economic analysis and stock analysis of Walmart, this article found that the company had been
developing for almost 10 years before the outbreak of the epidemic, so Walmart must have done
very well in both economy and management. These advantages also made previous losses during
the pandemic less dramatic. Based on the stock fluctuations, this article found that there are two
characteristics of the impact of the pandemic on Walmart; One is a short time, and the other is a big
influence. This can also be seen in Walmart's response to the pandemic quickly.
Keywords: Walmart, COVID19, e-commerce.

1. Introduction
The digital revolution continues to transform the way business is done worldwide. The COVID-
19 pandemic has made entrepreneurs more resilient and creative in how they develop strategies for
working in a world with less face-to-face contact. And has led to an entirely new crop of startups.
Take an example of OnlyFan [1-3]. Only fun was founded in London, UK, in 2016. During the Covid-
19 lockdowns, almost everybody caught wind of an explosive new platform called OnlyFans. Famous
for raunchy content, endless memes, and putting power back in the hands of content creators,
OnlyFans has been successful despite limited investor backing (mainly due to NSFW content).
Despite net revenue of $2.5B in 2022 and a dedicated user base of 7M fans per month, OnlyFans’
public image has prevented many larger investors from jumping in thus far [4-6].
By analyzing the financial situation of Walmart and the volatility of Walmart stock in recent years,
I found out the impact of Walmart under the pandemic. The structure of this paper is mainly divided
into five parts. The first two paragraphs mainly introduce the background of the company and my
research direction [7-8], followed by the analysis of Walmart's finance, stock, and financing, and the
SWOT analysis based on my understanding of the company. Finally, the conclusion. In this article,
the SWOT analysis shows that the biggest threat to international relations is the impact of the
pandemic. But international relations are also a great opportunity for Wal-Mart to expand in more
countries.
The remainder of the paper is organized as follows: Section 2bombard the text companies'
background and analysis of their stocks and finances. Section 3 performs the SWOT analysis;
Section4 shows some advice for Walmart on the impact of the pandemic. The last Section presents
our skimming.

2. Firm description
2.1. Background
Walmart is a multinational retail corporation that operates several chains of discount department
and warehouse stores [9-10]. Wal-mart's main profit brand has ’Great Value’, ‘Marketside’, ‘George’,

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‘mainstays’, ‘Simple Basic’, etc. ‘Great Value mainly covers food and non-food product’,
‘Marketside’ mainly covers household goods; ‘Simply Basic’ mainly covers clothing products.
2.2. Financial analysis
In the Fiscal year, total revenue was $572.754 billion, up 2.4 percent from a year earlier; Operating
profit of $25.942 billion, up 15.1% year on year; Net income attributable to its parent company was
$13.673 billion (86.5 billion yuan), up 1.2% year on year. Diluted earnings per share were $4.87,
compared with $4.75 a year earlier. Adjusted earnings per share were $6.46, compared with $5.48 a
year earlier.
2.3. Share analysis

Walmart
160

140

120

100

80

60

40

20

Fig. 1 Walmart's stock market change from 2019 to 2020

Note: blue lines-The share price blue dotted line-the day of the lowest Light blue solid line -highest
of the day
After 2000, Walmart's stock price rose steadily, from 54.65 yuan in 2008 to 131.6 yuan in 2022.
The rapid development of this company makes it quickly become a global 500 enterprise. Part of its
success results from rising living standards and reduced economic pressure around the world, as more
people seek quality products and choose Walmart. In the meantime, an unprecedented challenge-- the
outbreak of the coronavirus pandemic -- has led to volatility in the stock market. The coronavirus
broke out in China in early 2020 and quickly spread around the world, under such a circumstance,
Walmart was also greatly affected at the beginning of the pandemic. In January 2020, Walmart's stock
price fell from 114.42 yuan to 110.07 yuan and reached 103.26 yuan in February. Nearly 50,000 retail
stores have closed and millions of workers face the prospect of being suspended without pay or laid
off. This remarkable change has led Walmart's top executives to take some fixed policies, such as
developing e-commerce. Walmart accelerated information technology research after the pandemic
and invested heavily in e-commerce. In the end, e-commerce sales grew 8 percent. In addition,
Walmart provides more products related to food, groceries, and other daily necessities, and provides
consumers with the option of installment, which reduces people's pressure. Walmart is not letting its
guard down in the face of rising market prices. The company still guarantees that the goods and
materials are sufficient, the price is stable, and the epidemic prevention measures are strictly done.
This is also a big reason for Wal-Mart's success (fig 1).

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2.4. Financing situation

Table 1. Walmart's financial condition
Funding
Investor Money raised
round
Canada Pension Plan Investment Board, GIC,SoftBank Vision 3.6 billion
Flipkart
Fund,Walmart dollars

Walmart has a total of 26 investment companies and 14 lead investors. It's worth mentioning on
July 12, 2021. Flipkart, the e-commerce arm of Walmart, has announced that it has raised $3.6 billion
in new capital at a projected valuation of $37.6 billion. Flipkart, India's largest e-commerce company
with 350 million users, was the fastest-growing e-commerce market in the world in 2021 and is
expected to enter the US market soon. In addition, this is the second time SoftBank has become a
Flipkart shareholder. In August 2017, SoftBank invested $2.5 billion in Flipkart through its Vision
Fund, making it Flipkart's largest shareholder with a stake of nearly 20%. This was followed by
Walmart's purchase of 77% of Flipkart for $16 billion in May 2018. SoftBank also reaped about $4
billion in revenue (Table 1).

3. SWOT Analysis
3.1. Strength
(1). Advanced logistics information technology
Walmart's cutting-edge logistics technology was a decade ahead of its competitors, and it bought
commercial satellites early in its life to connect to the world.
(2). human resource
Walmart values equality and makes good use of its local workforce. Most supermarkets are staffed
by local staff, which saves transportation costs and enables better communication with consumers
from local people, thus saving part of the time cost.
(3). The price
Walmart has kept prices constant for years and often sells them at low prices. Including an
installment model during the pandemic could also attract more prescribed customers.
(4). public welfare establishments
Wal-mart often takes part in public welfare activities, which sets up a good brand Appearance and
attracts more customers.
3.2. Weakness
(1). supplier
Because Wal-Mart products are in high demand, few suppliers can meet the demand.
(2). Professional field
Areas of expertise are too narrow and lack innovation.
Employees
The salaries and treatment of domestic and foreign employees are quite different, which may affect
the efficiency of employees to a certain extent.
3.3. Opportunity
(1). Electrical business development
With the popularity of the Internet, e-commerce is still a good opportunity to get greater profits.
The foreign development
Based on the international popularity of Wal-Mart, the company has great opportunities to develop
abroad. Walmart can expand its territory again.

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3.4. Threat
(1). competitors
Although Wal-Mart's dominance in retail today, there are other companies and individual
businesses that are growing rapidly.
(2). Policy
Walmart may face some international policy changes that will make it difficult for the company
to grow abroad.
(3). International relations
International relationships are very important to Walmart, but in recent years, the relations between
some countries are very tense, which will make Walmart face a great economic crisis. It could also
affect Wal-Mart's growth abroad.
Based on Wal-Mart's performance in recent years, my advice would be to try some smaller retail
stores while maintaining the current size, because there are other effects of the pandemic, and people
may not have enough time or energy to go to the large stores. In this case, small retail stores may be
more suitable for today's young people. Second, I think Wal-Mart can try some new areas, such as
semi-finished product processing if the funds permit. This not only broadened Wal-Mart's business
area but also supported Wal-Mart's large retail stores. Walmart will be able to act as its supplier,
saving time and cost and giving the company better security.

4. Conclusion
This article mainly studies the development of Walmart and its subsidiaries from 2000 to 2022. In
terms of stocks and finance, it mainly showed the analysis of stock price fluctuations and company
operations at the beginning of the pandemic in 2020. During the writing of the thesis, I used the
financial analysis method of SWOT to study the strengths, weaknesses, opportunities, and threats
according to the overall operation mode of the company. And in the summary of these four aspects
after writing their own Wal-Mart company's future development suggestions.
The study concludes that under the influence of the epidemic, although Walmart received a short-
term impact, it soon found appropriate operation modes, such as the development of e-commerce and
the reduction of prices. And I think the pandemic has brought out Wal-Mart's business potential. And
we found that Walmart's business area is narrow, which is what I mentioned in the proposal, and it
can expand into other areas if the funds allow.
The whole article only shows and describes the research object step by step. There is very little
information about Wal-Mart's future development, and there is still a big lack of stock analysis. The
chart of Wal-Mart's stock market only shows how the stock price changed after the pandemic began
in 2020, missing a long comparison of stock prices. There is also less information about weaknesses
and threats in SWOT analysis, a deeper analysis of the causes is missing. In future research, the author
should make great efforts in data collection, and combine and compare conclusions with data, to
better reflect differences. Second, when analyzing the negative aspects of a company, it should be
more critical and open-minded. Finally, complete an economic analysis paper that readers can
understand in depth.

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