Inventory Management in a Multinational Company - Free Essay Example

Sample details Pages: 11 Words: 3367 Downloads: 5 Date added: 2017/06/26 Category Management Essay Type Analytical essay Did you like this example? Inventory may be desirable, even necessary, for smooth operation and good customer service in many situations. For instance, inventory can be used to reduce the lead time to respond to customer demand, to smooth out the production rate when there are variations in demand, and to protect the company from underestimates of demand (forecast errors) or shortage of supply. Reasons such as these, plus the fact that inventory is considered an asset on a companys balance sheet, have led many companys to carry excessive amounts of inventory. Don’t waste time! Our writers will create an original "Inventory Management in a Multinational Company" essay for you Create order Some companies for example, the Japanese manufacturer Toyota, have become known for their ability to operate with low inventories and to achieve a high inventory turnover. (Inventory turnover is basically the ratio of sales to the average inventory level, both measured at cost or retail price.) The Japanese approach is to keep in process inventory low and to achieve quick flow of the product through the production cycle. Being able to respond quickly to demand, companies can work from a shorter range forecast, which is more accurate, so they need less safety stock to protect from uncertainty. [1] 2. Aims and objectives Inventory management is an important concern for managers in all types of businesses. For companies that operate on relatively low profit margins, poor inventory management can seriously undermine the business. The challenge is not to pare inventories to the bone to reduce costs or to have plenty around to satisfy all demands, but to have the right amount to achieve the competitive priorities for the business most efficiently. [2] Aims and objectives of this thesis are as follows: Deciding where to position inventory Determining when to replenish inventory Calculating how much to order Determining the placement of safety stock Refacilitating the use of business resources for profitable business results Ensuring the target level of inventory is available to support demand. 3. INVENTORY Inventory is defined as the stock of any item or resource used in organization [3]. An inventory system is a collection of people, equipment and procedures that function to keep account of the quantity of each item in inventory and to determine which items to buy or produce in what quantities and at what times. Even very simple method that accomplishes these functions cost money to operate. Some inventory system requires transaction reporting to keep track of every instance in which units are added to or taken from the existing inventory. This perpetual inventory records can be expensive, but the additional expense can be justified for products that are relatively expensive to hold in inventory 3. 1. CYCLE INVENTORY The portion of total inventory that varies directly with lot size, is called cycle inventory. Determining how frequently to order, and in what quantity, is called lot sizing, two principles apply. The lot size, Q, varies directly with the elapsed time (or cycle) between orders. If a lot is ordered every five weeks, the average lot size must equal five weeks demand. The longer the time between orders for a given item, the greater the cycle inventory. At the beginning of the interval, the cycle inventory is at its maximum or Q. at the end of the interval, just before a new lot arrives, cycle inventory drops to its minimum, or 0. the average cycle inventory is the average of these two extremes: Average cycle inventory = This formula is exact only when the demand rate is constant and uniform. However, it does provide a reasonably good estimate even when demand rates are not constant. Factors other than the demand rate also may cause estimating errors when this simple formula is used. 3.2. SAFETY STOCK INVENTORY To avoid customer service problems and the hidden costs of unavailable components, company holds safety stocks. Safety stocks inventory protects against uncertainties in demand, lead-time, and supply. Safety stocks are desirable when suppliers fail to deliver the desired quantity on the specified date with acceptable quality or when manufactured items have significant amounts of scrap or rework. Safety stock inventory ensures that operations are not disrupted when such problem occur, allowing subsequent operations to continue. Figure 1: Various types of Inventory To create safety stock, a farm places an order for delivery earlier than when the item is typically needed. The replenishment order therefore arrives ahead of time, giving a cushion against uncertainty. Inventory used to absorb uneven rates of demand or supply, which businesses often face, is referred to as anticipation inventory. Predictable, seasonal demand patterns lead themselves to the use of anticipation inventory. Anticipation inventory also can help when supply, rather than demand, is uneven. A company may stock up on a certain purchased item if its suppliers are threatened with a strike or have severe capacity limitations. 3.3. ANTICIPATION INVENTORY Inventory used to absorb uneven rates of demand or supply, which businesses often face, is referred to as anticipation inventory. Predictable, seasonal demand patterns lead themselves to the use of anticipation inventory. Anticipation inventory also can help when supply, rather than demand, is uneven. A company may stock up on a certain purchased item if its suppliers are threatened with a strike or have severe capacity limitations. 3.4. PIPELINE INVENTORY Inventory moving from point to point in the materials flow systems called pipeline inventory. Materials move from suppliers to a plant, from one operation to the next in the plant, from the plant to a distribution center for customer, and from the distribution center to a retailer. Pipeline inventory consists of orders that have been placed but not yet received. Pipeline inventory between two points, for either transportation or production, ca be measured as the average demand during lead time, , which is the average demand for the item period (d) times the number of periods in the items lead time (L) to move between the two points, or Pipeline Inventory = = dL. [2] 4. BATB Inventory Management There are some standard management theories as we described earlier in chapter two. The operational environment varies firms to firms, companies to companies. Based on the different varying conditions most companies do manage the inventory at their own. They do not follow exactly what the theory implies but analyzing the theories they go for the decisions that suit them most effectively and efficiently. The goal should not be to minimize inventory or to maximize customer service but rather to have the right amount to support the competitive priorities of the company. 4.1. BATB Inventory System BATB inventory system can be compared with a two-bin system in which an items inventory is stored at two different locations. Inventory is first withdrawn from one-bin. The two-bin system implies that if the first bin is empty, the second bin provides backup to cover demand until a reenlistment arrives [2]. BATB has the flexibility to locate their inventory at different points from supplier to warehouse at supplier premises which is very good advantage for a company. The demand manager and the MPS manager reviews the inventory positions on the daily basis and then go for receiving the lot from the pipeline inventory. This indicates that they are maintaining the pipeline inventory. It helps them reduce the lot size to be stocked at warehouse. BATB Inventory includes: Finished goods Bled sets Filter rods Wrapping materials Leaf Tax stamps Bandle rolls The study is mainly focused on the leaf. Because this is the major concern in any cigarette manufacturing company as it holds the maximum cycle time. We will work with the raw materials inventory. Mainly BATB has two types of materials. These are wrapping material and Tobacco. They receive raw materials from both local and foreign suppliers. Foreign suppliers are mainly from Brazil, Argentina, Canada, South Africa and Zimbabwe. For local suppliers average lead-time is 10 to 15 days and for the foreign suppliers lead-time is 90 to 120 days. Leaf is supplied by both the local and foreign supplier. But ignoring the local leaf as it takes less time, we will take the imported leaf in account to analyze. Leaf Strategy Leaf is an agricultural plant, which must be cultivated, and it needs certain period to get matured. Therefore the ordering policy of leaf is very time consuming. They have to place the order very early of the time it is needed to arrive. Suppose they need 1000-ton leaf in the month of April 2008, they inform their supplier right now that is in the month of April 2007, so that they can cultivate the leaf and then deliver. In addition, it is to be mentioned that just after the arrival in the warehouse the leaf is not as ready as to be used for production. It goes under another certain period of time for maturation and then is under for production. But if we talk about the lead-time it will include only the days between order placements to arrival at warehouse. 5. SAFETY STOCK Usually one does not know precisely the number of units that will be demanded each day during the lead-time. The duration of lead-time may have unexplained or unexpected variation. Demand can be thought of a probabilistic variable with some expected amount of demand during a period of time and unexplained variations about the expected value. If inventory could be replenished one a moments notice there would be no reason to be concerned about demand uncertainty. Whenever inventory reached zero, stock would be held again. With some lead time between the placement of an order an its arrival, however there is a chance that demand will be greater than expected and loss will be incurred due to stockout. When stockout costs are high and demand is very unpredictable, the financial risk is sizable. Safety stock is a means of protection against this risk. Safety stock (SS) is established simply by raising the reorder level above the expected lead-time demand. For probabilistic demand during le ad-time, the reorder level is given by the following equation where represents the mean demand per unit of time. [1] RL= ( ÃÆ'Æ’- LT) + SS Safety stock is the average amount one hand when replenishment orders arrive. Sometime demand during the lead-time is less than expected extra stock is on hand. Sometimes demand is greater than expected and some of the safety stock is used. 6. Methodology Step 1: Conducting a primary survey. Step 2: Preparing primary questionnaire Step 3: Modification of the questionnaire Open-ended questions: This type of questions found out the view of the decisions makers out for gathering information regarding the subject topic. Close-ended questions: These types of questions were designed to extract information which are related to the preparation of a realistic forecast: Step 4: Performing the case study and conducting the interview Step 5: Data processing and analysis 6.1 Demand Forecasting Strategy Demand manager receives the sales history of the previous 4/5 years. He observes the trend that every month undergoes. There are some seasonal impacts in the cigarette market. But overall the market is a stable one. Following the trend of previous 4/5 years and considering the marketing activities, the demand manager goes for a rolling forecast over the next 18 months. The term rolling here implies that the forecast is updated every month for the next 18 months. Stable Trend-up Trend-down Figure 2: Trends of Demand By this, the demand manager feels flexible enough to consider any new promotional activity or any assumption from the marketing department and any seasonal impact, which has not been included earlier. The main focus of forecasting is based on the trend. If the trend is decreasing the forecasted sales goes down and vice versa. 6.2. Findings Imported leaf stock: Year end 2008 imported leaf stock was 317 million Taka Average 2008 leaf stock was 334 million Taka (~ 4 months duration) Currently, they are following an inventory policy of maintaining a 90 day safety stock which varies in quantity and value terms over the year with fluctuation in demand. 7. ANALYSIS The assumptions presented in the chapter two have been considered applicable to develop the EOQ for the imported leaf. Considerations: Grade: AN30/104S Demand in Kg/Month: Annual Demand = 152000 Kg Holding Cost = 32 TK/ Kg Ordering Cost = 700 TK (Assumed) EOQ =ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ (2DS/H) = ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ((2*152000*700)/32) =. 75Kgs Kgs 7.1 HOW MUCH TO ORDER The analysis shows that the company should order 2579 kg for the particular grade each time, a quality that should be result in 58.93 cycles per year. Actually, the equation derived doesnt result in actual lot size that must be ordered. This will help to manage lot size and inventory control. The current moves towards the inventory cost and quantities, stress the importance in reducing lot size. That means to reducing lot sizes is to reduce setup time and cost. When smaller lots are run, holding cost is reduced. The point is to understand the logic and where to apply it. The effect on order size resulting from reducing setup cost is shows in the following figure. When the setup cost is reduced, the total cost curve shifts from TC1 to TC2. Correspondingly, the EOQ is reduced from EOQ1 to EOQ2 and the maximum total cost is reduced from TC1min to TC2min.[3] Figure 6: Effect of reduced set up cost on order size and total cost 7.2. Reorder level The order quantity and reorder level are interrelated. A large order quantity causes fewer replenishment cycles with fewer exposures to stockout, so the reorder level can be reduced, and vice versa. Theoretically, we would have to find simultaneous solutions to equations for Q and RL to find their normal values. The value of D, S and H are only estimates, and the value of the EOQ will be approximate whether or not an adjustment is made for the expected stockout cost. Consequently, as often as done, we disregard the interrelationship between Q and RL. We solve for the EOQ, ignoring its effect on stockout cost, and then we find the best reorder level for this value of Q. Assumptions: Highest Service Level Factor corresponding to 99.99% satisfaction level used though recommended maximum level is usually 98%; this results in a more than 50% higher safety stock ii) Safety Stock calculated using standard deviation of actual demand rather than variance between forecast and actual giving higher levels of safety buffer. iii) Lead time taken to be 4 months for all grades whereas actual lead time is considerably less providing greater safety stock to cover variation in demand during lead time. Calculation: RL = L + z Where, RL =Reorder Point in Units, =Average Demand Per Time Period, L = Lead Time,Z = No. of Standard Deviation for a Specified Service Level,= Standard Deviation of Usages during Lead Time Annual Demand =152000 kgs Average Demand/Per Month =12666.66 L= 4 Months Z = 99.99% = ÃÆ' Ãƒâ€ Ã¢â‚¬â„¢d = ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ (ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‹Å" (di-dÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢) 2/12), in a range from i-1 to 12 =ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ (31066666.66/12) =1609.00 Therefore, = =1609* =3218 From the above calculation RL can be determined as follows: RL = 12666.66 * 4 + 4*3218 =50666.64 + 12872 =63538.64 This says that when the stock on hand gets down to 60610.26 kgs order should be placed. 7.3. Level of Safety Stock Safety stock= =4*3218 =12872 It results to a safety stock of 31 days, as the daily demand is 416.43 kgs. But theoretically it is applicable for the particular grade. Though the other grades do not involve so much variation in their demand, considering some logistic capabilities for the overall improved leaf the proposed safety stock is 50 days. This will allow for flexibility during roll out of new safety stock polling while guarding against unanticipated changes in sales and supply scenarios. The reason for proposing this amount of safety stock is to protect much against the uncertainty of demand. Because there may be a situation that for a sudden change in demands the system may not be flexible enough to meet the change from the calculated safety stock. This is due to demand forecasting that takes place over a long period and the order is placed for a particular month very early of the situation it experiences the change in its demand. So immediately it is not possible for the system to respond the sudden change in demand. For this, proper level of safety stock should be placed in a company for its smooth operation. Another fact is that the lead time from order placement to arrival at warehouse involves some events over which the proper control is not possible. The following section represents the impact of reduction of safety stock and then the analysis of lead time is shown. It is to be mentioned that the more the lead times the more the level of safety stock. Therefor e the lead time calculation is an important factor for the placement of safety stock. 7.4. BENEFITS CALCULATION GRADE: AN30/104S Annual consumption = 152000kgs 90 days safety stock = 38000kgs 50 days safety stock = 21111.11 Therefore, WC Reduction = (38000-21111.11)*165 =2.78 million Taka 7.5. OFFSHORE STOCK COST CALCULATION Reduction in safety stock = 16888.89 kgs This amount of excess stock will be held at supplier premises for a maximum additional period of 12 months. Holding cost at BATB @ 12% = 16888.89ÃÆ'Æ’-135.11ÃÆ'Æ’-12% =273823 Taka Holding cost at supplier @ 7.2% + Excess Duty =16888.89 ÃÆ'Æ’- 135.11 ÃÆ'Æ’- 7.2% ÃÆ'Æ’- 1.22 =200439 Taka Therefore, Savings =73384 Taka 8. IMPACT OF REDUCED LEVEL OF SAFETY STOCK ON WC Proposed Safety Stock based on lead-time, variability in demand during 2006 and desired service level indicates a substantially lower requirement of safety stock even with very conservative assumptions Using 2007 volumes this would translate to reducing imported leaf stock from an average of 322.60 Million TK. to about 179.18 Million TK. Jan 08 Feb08 Mar 08 Apr 08 May 08 Jun 08 Aug08 9. LEAD TIME ANALYSIS It has been already mentioned that the more the lead time the more the safety stock. Lead time involves the total time from the order placement to arrival at warehouse Figure 7: Supply Lead Time We can develop a pie chart highlighting the time taken on a percentage basis by different events that take place from order placement to arrival at warehouse. Symbols Events Average % A TIME TAKEN BW ORD PLACE PRO INVOICE REC 14.75 7 B TIME TAKEN BW LC REQUIEST 10.93 5 C NO. OF DAYS SPENT B/W LC SHIPMENT DATE 38.90 19 D ARRIVAL IN CTG (ACTUAL SHIPMENT ETA CTG) 35.10 17 E DAYS REQD CTG TO ICD 6.05 3 F DAYS REQD ICD TO WAREHOUSE 8.58 4 Table 1: Lead Time Analysis The pie chart shows that a major part of the time from order placement to arrival at warehouse involves the events C and D over which the control cannot be held so easily. They involve some complex as well as time taking procedures. But in case of the rest of the events different action can be issued very effectively. Figure 8: Events placed on Warehouse (Percentage basis) In addition there are some recommendations for reducing the lead-time in the next chapter. 10. RECOMMENDATION As the analysis shows that the company can reduce the level of safety stock, the first phase of recommendation represents how it can be carried out and the later phase defines the steps, which should be proper monitored and controlled with a view to, maintain an optimized inventory management system. This will enable to obtain an effective safety stock level. Allowing Inventory Policy Exceptions for certain grades to satisfy requirements for blend changes and brain launches. Reviewing and improving the order tracking process as necessary. Monitoring orders, delivery performance and safety stock policy adhere continually. Gradually moving to safety stock of 2.5 months and then to 50 days, with 6 months duration difference. Holding the excess stock at the supplier premises. Locating the inventory at different points in the pipeline rather to hold much in the warehouses. The following steps should be performed in order to implement the recommend actions: Developing operational excellence in demand forecasting so that there will be fewer surprises. Cutting the lead-time to reduce the demand uncertainty during lead time. Reducing the supplier uncertainty. Supplier reliability can be increased by sharing the production plans with them, permitting them to make more realistic forecast. Improving the logistics capability by planning the infrastructure to meet demand, then implementing and controlling the physical flows of material and final goods from points of origin to points of use. 11. CONCLUSION It has been revealed that the traditional inventory management system needs some modification depending on the situation or the operating environment, while inventory is management by a company. The different inventory models provide a different set of capabilities and opportunities to exploit different competitive priorities. Some members of different industries and consulting firms have already started to criticize classical inventory models seem fashionable. But prior to the operating conditions different classical inventory models can be considered as the decision making tools that will enable a company to take its step under conflicting pressure. All the system needs is proper integration of operation and business. This will smooth the flow of information and thereby implementation of such models would be openhanded.

How Bereavement has Affected Jerzy Essay - 994 Words

How Bereavement has Affected Jerzy The death of a spouse has to be one of the most stressful changes you will ever experience. Your spouse was probably the most important person in your life, possibly for many years. You may not remember much of your single life before you were married; now you must live with the loss. Jerzy has been through a lot with his wife, Word War Two, refugee status in three different countries before settling down in England. When somebody dies after a long illness, the time which leads up to death is often difficult for those who care for them. When you lose somebody as a result of a long, wasting illness such as cancer, it is often very hard to keep the reality†¦show more content†¦The reaction of a child dying by accident is: shock, anger and disbelief. Denial of what happened is a natural defence and initially helps the traumatized system to cope. However, if the denial persists, the bereaved person will supper from extreme anxiety and risks long term mental health problems. On the Death of a child by Celia Hindmarch, 2nd Edition, (2000) Oxon, Radcliffe Medical Press Ltd. Even though it is a universal experience, most people do not like change. They have a limited capacity to accept it. People actually fear change because it is a threat to their basic security needs. Virtually all religions bring a deeper awareness of the meaning of life and most of them offer a way of looking at death. Some religions stress that there is a continuing relationship of those who die with those who live. Recovery from Loss, A Personalized Guide to the Grieving Process by Lewis Tagliaferre and Gary L. Harbaugh, PH.D. (1990) Floriday, Health Communication, Inc. Grieving for somebody who has died a sudden, unexpected death, Helen Husband, can be especially difficult. Things are left unsaid. There are no goodbyes. The unexpected death of a person can make us feel not

OBSERVATION OF TV VIOLENCE Essay Example For Students

OBSERVATION OF TV VIOLENCE Essay In my experiment I will study the behavior of children before, during and after viewing a violent television program, specifically The Power Rangers. I will use the theories of Charles Horton Cooley, George Herbert Mead and Harold Wilensky to analyze the results according to their theories. Cooleys theory is that people shape the aspects of their identity so that it would fit what others would want. Therefore we would become the kind of person we believe others think we should be. Harold Wilensky said that the media produces a mass culture, in which people have similar culture, that people have similar cultural tastes and political values shaped by the media. This produces a mass of people with similar thoughts and feelings, which can be manipulated by the media. Mead believed that the self is a social product, acquired by observing and assimilating the identities of others. He believed that for identification and assimilation there is a need for communication. The communication is the interaction of language, culture, family, peers and with a new form of communication, media. For Mead, childhood play and games were important activities. These activities used the idea of role taking, the way we try to look at social situations from the standpoint of another person, and significant others, influential people in our lives. The theorist that I think is the best for my experiment is Mead. For my experiment my hypothesis will be that after viewing a violent television program children will act more aggressive than before. That the childrens play will change so that it would become more violent, so that it would be similar to the show that they had seen. In my experiment I observed two children 30 minutes before watching the Power Rangers 30 minutes during the show and 30 minutes after the show. The observation was done on the friends of my brother and the friends of my cousins. My first observation was on my brother and his friend on November 1, 1999. My brothers name is Sina, he was born here and is 7 years old, but his parents were born in Iran. He is half Muslim and half Jewish; neither of his parents are strictly religious. He has an older brother and sister. His friends name is Alex and he is also 7 years old, and born in Russia. His father lives in Russia and he lives with his mother, grandmother and aunt. Both his parents are Jewish and he has a twin brother, but no sisters. I started to observe Sina and Alex at 3:00 PM at my house, since I knew that they would watch Power Rangers at 3:30. At 3:00 they played with each other, first playing in the living room using their trucks and making roads for their cars to travel on. They would make bridges and they directed traffic as though one of them was a traffic officer. He would tell them when to go and when to stop and they would make the cars crash into each other so that the fire truck and the ambulance could come and rescue them. Then about 10 minutes later they went into my Sinas room, where he brought out his action figures. There were 2 Spiderman toys, 3 Power Ranger toys, 3 Batman toys, 2 Buzz Light-year toys (from the movie Toy Story) and 1 Ninja Turtle toy. They divided the toys up, taking turns in choosing the toys. First my brother, Sina, picked a Power Ranger toy, then another one, a Spiderman toy, a Batman toy and a Buzz Light-year toy. Alex got the other toys picked the toys that I did not mention. They lined up their toys so that they were facing their opponent and each of them grabbed two of their toys. They started to battle against each other and pretended that the toys were real and that they were either jumping really high or flying. Then they put one of their toys down and started to fight with only one toy each. .ub8e35c9c9e637226e7df5e0e079cec79 , .ub8e35c9c9e637226e7df5e0e079cec79 .postImageUrl , .ub8e35c9c9e637226e7df5e0e079cec79 .centered-text-area { min-height: 80px; position: relative; } .ub8e35c9c9e637226e7df5e0e079cec79 , .ub8e35c9c9e637226e7df5e0e079cec79:hover , .ub8e35c9c9e637226e7df5e0e079cec79:visited , .ub8e35c9c9e637226e7df5e0e079cec79:active { border:0!important; } .ub8e35c9c9e637226e7df5e0e079cec79 .clearfix:after { content: ""; display: table; clear: both; } .ub8e35c9c9e637226e7df5e0e079cec79 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ub8e35c9c9e637226e7df5e0e079cec79:active , .ub8e35c9c9e637226e7df5e0e079cec79:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ub8e35c9c9e637226e7df5e0e079cec79 .centered-text-area { width: 100%; position: relative ; } .ub8e35c9c9e637226e7df5e0e079cec79 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ub8e35c9c9e637226e7df5e0e079cec79 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ub8e35c9c9e637226e7df5e0e079cec79 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ub8e35c9c9e637226e7df5e0e079cec79:hover .ctaButton { background-color: #34495E!important; } .ub8e35c9c9e637226e7df5e0e079cec79 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ub8e35c9c9e637226e7df5e0e079cec79 .ub8e35c9c9e637226e7df5e0e079cec79-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ub8e35c9c9e637226e7df5e0e079cec79:after { content: ""; display: block; clear: both; } READ: Sir Anton Dolin Essay They moved the arms and legs of their toys and each one would say that he had defeated the other ones toy. The other would complain and they .

Walmart financial analysis free essay sample

Wal-Mart is the largest retailer in the world. Being the largest retailer in the world is considered a huge strength because other competitors are below. This strength makes it easy to negotiate prices with suppliers. Being the number one customer gives Wal-Mart an advantage. However there is more to consider when you look at finances. For finances determines the over success of a company. Furthermore, one will have a better understanding when financial statements are considered. For example if I wanted to invest in a company, I would look into the company financial statements because I would have a better sense of knowledge of the return of money invested. But then again, what if I have no Idea how to read a financial statement, say I never took a finance class or an accounting class. How would I know that I’m investing my money in a trustworthy organization? Here is the solution, below is a financial analysis of Wal-Mart. We will write a custom essay sample on Walmart financial analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page As result you will be able to determine the suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the companys past performance into an estimate of the companys future performance. Auditors Wal-Mart is audited by Ernst Young LLP. Ernst Young’s believe the financial position of Wal-Mart is clearly depicted in their financial statements and in tune with the U. S. generally accepted accounting principles. The company functions globally an employs thousands of individuals. Wal-Mart is a private employer. This gives the company the opportunity to employ anyone. In addition the company can do business with whomever, as result China is one of Wal-Mart biggest suppliers. Taking jobs out of the United States by out sourcing to foreign countries, Wal-Mart is able to cut cost and support other countries. â€Å"Since Wal-Mart offers its grocery products at prices lower than the market. Wal-Mart has an advantage, constantly flexes its bargaining muscle to lower prices. This strategy ensures a steady, recurring stream of customers for its goods, making Wal-Mart synonymous with inexpensive and this keeps constant pressure on competitors. With result Wal-Mart has a strong foundation for growth as the US market matures. According to Ernst Young LLP, Wal-Mart Stores Inc. s financing gap keeps negative from 2011 to 2012, which means it has adequate Fund. It indicates that Wal-Mart Inc. has enough cash to purchase capital expenditures without borrowing. Wal-Mart Stores Inc. also maintained low debt to equity ratio, which refers that conservative financing. From that perspective, Wal-Mart Stores Inc. had sustained and steady earnings those years. Extraordinary Events Wal-Mart extraordinary events on March 4, 2010 the company’s Board of Directors approved an increase in the annual dividend to 1. 21 a share. Since the event Wal-Mart investors were able to see an increase in their investment. However there hasn’t been any extraordinary events since then. Trends in Assets and Liabilities Wal-Mart’s total assets increased by 7,277 million, from 2012 to 2013. Similarly, the total liabilities of Wal-Mart have increased 1,427 million from 2012 to 2013. Expansion is an opportunity to create more jobs by adding branch banking in different Wal-Mart locations. In addition the trend for healthy foods has risen. Wal-Mart has opportunity to expand all Wal-Mart to Wal-Mart superstores. This could increase revenue and help the customer with the conveniences of being able to grocery shop. Mac Donald’s is one of Wal-Mart greatest tactic to attract more people. The idea was a great business plan for both Wal-Mart and the Mac Donald’s entity. In general Wal-Mart results are positive. Revenue and generated profit has increased compared to previous year. Revenue increased by 5%. Net Income before depreciation increased by 6%, main sales comes from US which increased by 8%. The biggest growth comes from Wal-Mart International increased by 64%. Although when you have an increase in assets you normally will have an increase in Liabilities. According to Wal-Mart balance statement the biggest liabilities would be its accounts payable. Largest Assets The Encarta dictionary defines assets as â€Å"Assets are bought to increase the value of a firm or benefit the firms operations. You can think of an asset as something that can generate cash flow, regardless of whether its a companys manufacturing equipment or an individuals rental apartment. † Wal-Mart’s three largest assets for 2013 were inventories, buildings and improvements, and fixtures and equipment.