Financial statement case study. Business & Marketing Coursework

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Financial Statement Case Study
Liquidity- current ratio
The liquidity ratios focus whether a firm is able to satisfy the short term those obligations (Brigham and Ehrhardt 89). The current ratio calculated by dividing current assets by current liabilities is the main liquidity ratio and the quick, or acid test, ratio, which is the current assets less inventories divided by current liabilities. The current ratio decreased from 86.20% to 75.98%, mainly because the total current liabilities increased at a faster rate than the total current assets. The current ratio is 1 and above, which indicates the retailer’s ability to satisfy the current liabilities obligations. If the current ratio decreases over time and is consistently below 1, Wal-Mart may affect liquidity issues in the long-term.
Profit Margin,
The net profit margin (profit margin on sales) declined from 2.81% to1.97% is the net income divided by the sales. The profitability ratios are useful to determine the effectiveness of a firm’s operations, and the ratio mostl...