WalmartvsBoeing 2

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Walmart Vs. Boeing

Wal-Mart Incorporated is a company that operates in retail stores and membership clubs, which offers products and services at low prices. The company is divided under three segments Walmart U.S, Walmart International and Sam’s Club ( http://corporate.walmart.com/our-story/, 2015). While Boeing is one of the World largest aerospace company which manufacture products such as commercial planes and military aircrafts (http://www.boeing.com/boeing/companyoffices/aboutus/index.page, 2015). The assignment is to find the most recent Annual Report for both companies, calculate the asset utilization ratios and compare. The asset utilization ratios is defined as “ An analysis tool that defines whether company is wasting its assets or putting them to good use” (Asset-Utilization Ratio, Forbes, 2015). The asset utilization ratios are: (1) inventory turnover; (2) Day’s sales in inventory; (3)Receivables turnover; (4) Day’s sales in receivables; (5) Total asset turnover; (6) Capital intensity.

1) Inventory turnover = Cost of goods sold / Inventory

Walmart

Boeing
Cost of Goods Sold
358,069,000
73,268,000
Inventory
44,858,000
42,912,000
Inventory Turnover
7.98
1.71

In January 2014, the Cost of Goods Sold for Walmart is $358,069,000 and the inventory is $44,858,000, so the inventory turnover is 7.98 times. Walmart sold off or turned over the inventory 7.98 times. While at the same period of time, the Cost of goods Sold for Boeing is $73,268,000 and the inventory is $42,912,000, which give the inventory turnover of 1.71 times.

2) Day’s sales in Inventory = 365 days / Inventory turnover

Walmart

Boeing
Inventory turnover
7.98
1.71
Day's sales in Inventory
46
213

If Walmart has a turnover of 7.98 times and Boeing of 1.71 times, we can figure out how long it took both companies on the average turnover by calculating the day’s sales in inventory. Walmart inventory sits on average 46 days before it is...
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