Assignment 1 Finance 540: U.S. Publicly Traded Companies (Research Paper Sample)

U.S. Publicly Traded Companies
Student’s Name
Institutional Affiliation
U.S. Publicly Traded Companies
Wal-Mart
Wal-Mart Stores, Inc., known as Wal-Mart, is an American cosmopolitan retailer company that controls chains of warehouse stores and large discount department stores. According to the Forges Global 2000 list, it is the 18th world’s largest civic corporation in the world, and the largest civic company when ranked by revenue. Wal-Mart is also the largest vendor and the biggest private employer on the planet with more than two million workers. The corporation was established in 1962 by Sam Walton, integrated in 1969, and in 1972, it was traded publicly on the New York Stock Exchange. Wal-Mart is headquartered in Bentonville, Arkansas. In addition Wal-Mart is the biggest grocery seller in the United States (Fishman, 2006).
Wal-Mart Stores, Inc. runs retail stores, discount stores, restaurants, supercenters, supermarkets, hypermarkets, apparel stores, warehouse clubs, neighborhood markets and Sam’s Clubs, as well as the websites samclub.com and walmart.com. Its operations are organized into three sections: Wal-Mart International, Sam’s Club and Wal-Mart Stores U.S. The corporation also operates banks that focus on customer lending, and offers financial services as well as products, comprising money orders, check cashing, bill payment, and wire transfers.
Target Corporation
Target Company, trading as Target, is an American vending corporation headquartered in Minneapolis, Minnesota. Target is the next largest discount seller in the United States, after Wal-Mart. The corporation was established in 1902 in Minneapolis, although its initial Target store was opened nearby Roseville, Minnesota in 1962. Target grew and finally became the biggest division of Dayton Hudson Company, culminating in the corporation being renamed as Target Corporation in August 2000 (Lichtenstein, 2006). On January, 2011, Target publicized its development into Canada.
Vulnerabilities
Wal-Mart Company
Running such a huge business is a huge task and particularly managing the workers. Purveyors are at all times under pressure with regard to cost and their aptitude to provide when needed. Due to the cut-rate consumers often query and are concerned at the quality of the merchandise. It is counterbalance to some level by the satisfaction guarantees proffered. Local competing sellers hate the possible Wal-Mart arrival and a lot antagonism is possible.
Even though Wal-Mart is huge, rivalry from similar corporations is also possible. Being triumphant, they are open to attack on any moral stance, poor work conditions and low pay, supply of merchandise from ‘poor’ cheap labor states, and ecological issues. Wal-Mart heavily depends on China in terms of producing its goods as it buys goods for billions of dollars every year. In addition, a lot of the corporation’s purveyors such as Mattel manufacture their goods in China that later are vended in Wal-Marts. Imports are substantial in Wal-Mart. By contracting with China, Wal-Mart can guarantee lower inventory costs, which the corporation turns into low costs for clients (CBS News, 2012).
Nevertheless, due to its reliance on Chinese production, Wal-Mart is susceptible to dollar’s fluctuation compared to Yuan. When the dollar becomes weaker than Yuan, the cost of Wal-Mart’s Chinese rates of import would increase. As a consequence, the corporation would need to increase its costs or deal with lessened gross margins decreasing its profitability. In addition, the corporation is susceptible to unfavorable legislation, for instance, higher tariffs which would increase the price of Chinese imports.
Wal-Mart Data Analysis
Wal-Mart utilizes the DataStax, an improved Hadoop distribution that uses Cassandra for lots of its core services. Recently, in a third funding round DataStax raised $25 million. Financial analysts as well as management report that Alteryx has made a noteworthy impact on effecting enhancements in store performance. The performance impact has been attained via applying flexible, fast, as well as transparent processing of Alteryx analytics application on a far greater data diversity, from both internal and external sources, integrating historical as well as timely and prognostic data dimensions.
Wal-Mart Labs has obtained a prognostic analytics startup known as Inkiru to boost its aptitude to create better consumer experiences via data. The Wal-Mart division was created on a big data foundation in 2011. Inkiru’s platform is a dynamic erudition system that merges data analytics, decision engine and predictive intelligence to determine and influence consumer interactions. Benefits to making use of Inkiru comprise being able to decrease fraud, boost consumer segmentation as well as targeting.
Target Company
Target began RED card advertising with its credit card program, which could boost its revenues. However, rising goods prices might counterbalance these gains. Target does not have a lot of stores as their contestant Wal-Mart. Even with Target’s great promotion, it makes it hard for the customers to shop there when there are not many stores around. Wal-Mart prices are low compared to Target prices. In addition, Target run out of items frequently since they keep a low overhead of item. Sometimes, it may be hard for a customer to find what he or she is looking for since Target focuses a lot on self-services. Wal-Mart is the first threat for Target. Regardless of the truth that they are the leading retailers globally, they also have very economical prices (Lichtenstein, 2006).
Financial Trends Affecting Wal-Mart and Target
Several experts have found three major trends working against retail stores. According to those hypotheses, Target and Wal-Mart are falling behind in the digital revolution and both are losing customers. Lastly, there are several citizens out there savoring Wal-Mart’s failure. Target and Wal-Mart stores have to wake up and properly reposition themselves (Springer, 2011).
Stressed-out consumers: Wal-Mart is currently relying on its longtime clients, and that is a chancy proposition when fiscal uncertainty and sky-high joblessness rates are thinning out what little discretionary revenue they formerly had. The trend is genuine, but it does not clarify away all problems of Wal-Mart.
Weak navigation of the digital divide: several people do not like to be seen at a Wal-Mart; and actually, many citizens do not wish to be seen at walmart.com, either. Wal-Mart publicized a major directorial reform of its online operations. Though, things obviously are not going well in cyberspace, although Wal-Mart’s tendency to low prices must vend well when customers do not have to navigate via massive parking lots as well as huge shops to save little money at the slow-moving list. The fact is that Wal-Mart, regardless of being the highest-grossing vendor in the world, is trailing behind some brick-and-mortal chains, comprising office supply experts, Staples as well as Office Depot in e-commerce (Springer, 2011).
Haters: unfortunately, many people wish to see Wal-Mart be unsuccessful. Anyone can really appreciate Wal-Mart’s frantic inventory turns that generate the opportunity for low as well as candid markups on items. If citizens save cash at Wal-Mart, the cash saved will probable work its way back into the society by being spent locally.
How the Stock Will Perform In The Future
In 2001, Wal-Mart attained the top of the Fortune 500, turning out to be the largest company in the United States, and has remained there each year since apart from 2006. Though, what really makes investors contented is that Wal-Mart is still enlarging as well as offering the opportunity for share values growth. Investing in Wal-Mart is the best option for many reasons. It seems to give a good return, whereas a solid PE ratio and a good but not undue dividend. Management appears to understand what it is doing, and Wal-Mart appears to be positioning itself to be a successful and an efficient company global. Wal-Mart appears to promise a good return partially since its valuation is logical (CBS News, 2012).
I propose Target, a company that I consider will hold its ground even in a double dip downturn coupled with price rises, and will, actually, take off if the economy phases a recovery. Target management is conscious of clients’ cash flow problems, and has rolled out the RED card credit card program, which gave clients a five percent discount for shopping at Target, to huge achievement. Target as well has extremely low price base, possessing most of its stores outright and thus not having to disburse rents. These aspects have led to Target remaining in the black all through the downturn in spite of poorer profitability. I think that Target’s clients have already retrenched all that they can, and that Target sales have reached their lowest point.
Target has yet to oversupply its core domestic market. Wal-Mart has many stores in the US, while Target has relatively paltry stores. Management anticipates that a growth to financial corporation someday, a step which must bring in money for its present expansion, and settle any doubts concerning the valuation via bringing in a self-governing set of eyes. It will as well turn TGT into a clean play vendor once more, which would make it simpler to analyze for retail psychiatrist (Napach, 2013).
Financial Ration Analysis
Gross profit margin ratio: also recognized as gross margin is the gross margin ration expressing as sales percentage. It is a measure of the company’s effectiveness employing its raw materials as well as labor during the process of production. The gross profit margin value differs from corporation and i...