Managerial Economics Essay

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Managerial Decision Making

Walmart is the largest retail store outlet in the United States. The business operations that are done by Walmart as an establishment encompasses cafeterias, hypermarkets, retail supply stores and also warehouse clubs. Some of the risk factors that influence the company include domestic and international macro-economic factors, lack of response to consumer preferences or trends, obstacles in the expansion and extension of the international operations of the company, changes in laws, and issues in aspects of labor. The market structure in which the company is set in is monopolistic competition. This is because there are numerous buyers and sellers in the market and there is freedom of entry and exit from the industry. Of course the company makes its pricing decisions and production decisions on the basis of its market structure. Therefore the company has to set low prices because it is set in a market that has numerous buyers and sellers.

Managerial Decision Making

Walmart overview and a brief history of its operations

Wal-Mart Store Inc. was initially founded and established in the year 1945 and is in the contemporary day undertaking its operations in retail stores in over 27 countries. The corporation is fragmented into three main segments. These segments include Walmart International, Walmart United States and Sam's Club. The business operations that are done by Walmart as an establishment encompasses cafeterias, hypermarkets, retail supply stores and also warehouse clubs. The company also undertakes e-commerce through its website Walmart.com. With regards to retail products, the supplies being traded in Walmart's retail stores consist of baby products, medical products, domestic goods, electronics, books, automotive products, apparel, fittings and decor, alcohol, grocery, paper products and a whole lot more.

Walmart is a United States worldwide retailing company that operates chains of considerable discount subdivision and warehouse stores. The business is considered to be the largest establishment as a private company in the whole world having hired over two million employees. The corporation is also the leading retailing firm on a global scale. Walmart brags of its huge, devoted and dependable consumer base. The company earns the confidence and conviction of its customers every single day basically by providing a varied range of products that are of great quality in addition to services that are inexpensive and low-priced.

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The corporation also cultivates an organizational culture that rewards and confirms mutual respect, uprightness, and diversity. The majority of the shares of the company are owned by the Walton family which possesses around forty eight percent of the stocks of the company. Walmart was established by Sam Walton and therefore shows why the family owns majority of the business.

Financial Performance

The following graphs illustrate the financial performance of Walmart Corporation over the years.

Figure 1: Walmart Corporation Income Statement

Source: https://www.google.com/finance?q=NYSE:WMT&fstype=ii

The figure above shows the income statement items which are the revenue, net income and profit margin levels of the company in the past five years. It is shown that the company's revenue amounts have gradually increased over the years. On the other hand, the net income and the profit margin of the company have been steady over the years.

The following figure indicates the balance sheet items which are total debt, total assets and percentage rate of debt to assets of the company. The graph indicates that the company in the year 2012 and 2013 invested in assets and has maintained a steady level ever since. The total debt amount of the company decreased in the past year.

Figure 2: Walmart Corporation Balance Sheet

Source: https://www.google.com/finance?q=NYSE:WMT&fstype=ii

The graph below shows the cash flow items of the company which are the operating activities, investing activities and financing activities. The level of financing activities of the company has deteriorated in the past year. The operating activities of the company increased by a considerable level while the investing activities did increase in the past year but by only a slight level.

Figure 3: Walmart Corporation Cash flow Statement.

Source: https://www.google.com/finance?q=NYSE:WMT&fstype=ii

Overall, the graphs above indicate that the financial performance of Walmart Corporation has improved consistently over the past five years or so......

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