Week 6 -Final Assignment - BUS625

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1 Walmart Expansion Analysis – Part 1 Swaminathan Subramanian The University of Arizona Global Campus BUS625: Data & Decision Analytics (FTB2211B) Prof. Kurt Diesch October 3 rd , 2022

2 Introduction Data Analytics plays a key role in making use of the data that is extracted in a large volume from various sources to make sense of that data with a graphical and pictorial representation using various tools and techniques to represent graphs and trends. This data is provided to the executives to make big decisions on the customers likes and dislikes of their products along with the expected profit/loss of their performance. Summarize the background of the country or region, including what makes unique and why it is a viable option for Walmart expansion. The country I chose for Walmart to globally expand is Philippines. The Republic of Philippines consists of 7,640 islands situated in Asia which is approx. 1200 sq miles. As of 2020 the population in 109 million and considered as the 12 th populous country in the world. The area occupied by Philippines is slightly largest than the state of Arizona. The major languages that are spoken Philippines is Filipino which is their native language and the second language that is widely spoken is English. The population growth is more than 2% compared to the most populated countries India & China

3 Wal-Mart moto is ‘Always low prices, always’ which helps it to sustain in any of the Asian country and Philippines will fall under the southern Asian cluster based on the Globe studies. One of the unique factors is some of the Information Technology companies have their Offshore business expanded to Philippines and Manila is their capital which is one of the largest islands of the Philippines. Since Philippine people are already familiar about US and its products because of them working for the US companies they are well aware of Wal-Mart and its products, and it is easy for Wal-Mart to expand their business in Philippines without many challenges on marketing and advertisement of their products and their services. Assesses the Data sets and includes any charts or graphs used in evaluation. Cashflow statement 2022 2021 2020 2019 2018 Net cashflow from operating activities 24,181,000 36,074,000 25,255,000 27,753,000 28,337,000 Net cash flow from investing activities -6,015,000 - 10,071,000 -9,128,000 - 24,036,000 -9,060,000 Net cash flow from financing activities - 22,828,000 - 16,117,000 - 14,299,000 -2,537,000 - 19,875,000 For any given organization the baseline requirement is to have transparency, accuracy of data is very important to show the financial health status of the company. One of the more important data to visualize is the cash flow of the company and below is the cash flow of operations, investment, and finance to showcase the outgoing expenditures and investments. Based on this we can make major decisions on how well the organization generate cash, how is the incoming cash flow compared to outgoing cash flow.

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4 Net cashf ow fro m operatng actvites Net cash fow f rom investng actvites Net cash fow f rom fna ncing actvites -30,000,000 -20,000,000 -10,000,000 0 10,000,000 20,000,000 30,000,000 40,000,000 24,181,000 -6,015,000 -22,828,000 36,074,000 -10,071,000 -16,117,000 25,255,000 -9,128,000 -14,299,000 27,753,000 -24,036,000 -2,537,000 28,337,000 -9,060,000 -19,875,000 Cashflow Details in Thousands 2022 2021 2020 2019 2018 Measures Outlook Sales, Interest, and other trends to make a determination on the Regional Outlook Any business that has a positive working capital will be able to withstand financial challenges Based on the below data for working capital for the last 5 years of record we can see 50% of improvement compared to 2018 and 2019. This is a good sign that shows Wal-Mart can be ready for investment globally. Financial data 2022 2021 2020 2019 2018 Total current liability 87,379,000 92,645,000 77,790,000 77,477,000 78,521,000 Total current assets 81,070,000 90,067,000 61,806,000 61,897,000 59,664,000 Working capital -6,309,000 -2,578,000 -15,984,000 -15,580,000 -18,857,000

5 2022 2021 2020 2019 2018 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 87,379,000 92,645,000 77,790,000 77,477,000 78,521,000 81,070,000 90,067,000 61,806,000 61,897,000 59,664,000 Asset vs Liability Total current liability Total current assets Currently Walmart has expanded in many countries like India, China, Africa, Canada, central America, and Mexico. Based on the financial statements Wal-Mart can be started in Philippines to increase the sales for 2023 adding more stores across the Philippines and expand to a new country adding more profit to the organization. Calculates whether Walmart will have favorable or unfavorable currency translation adjustments The foreign currency translation adjustment is the adjustment that complies of all the fluctuations caused by varying exchange rate.

6 Financial data 2022 2021 2020 2019 2018 Foreign currency translation adjustment 2,442,000 842,000 286,000 -226,000 2,540,000 2022 2021 2020 2019 2018 -500,000 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 2,442,000 842,000 286,000 -226,000 2,540,000 Foregin curreny transalaton adjustment in Thousands Based on the current exchange rate of Philippine Peso - 1 peso = .017 US dollar. So as of 2022 the foreign currency translation adjustment is 2,442,000 which means foreign currency translation adjustment will be calculated as 2442,000 * .017 = 41,514$. Creates Revenue Projections and sales projections based on data After reviewing the financial statement from 2018 till 2022 the Sales and Revenue has been a steady increase on an average from 2% to 7% every year. This shows that the growth rate of Walmart is really promising as we do not see any pitfall or drastic decline in sales in spite of the pandemic situation from 2019 to 2021 which had a major impact on the world economy globally.

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7 Financial data 2022 2021 2020 2019 2018 Net Sales 567,762,000 555,233,000 519,926,000 510,329,000 495,761,00 Total Revenue 572,745,000 559,151,000 523,964,000 514,405,000 500,343,00 2022 2021 2020 2019 2018 440,000,000 460,000,000 480,000,000 500,000,000 520,000,000 540,000,000 560,000,000 580,000,000 567,762,000 555,233,000 519,926,000 510,329,000 495,761,000 572,745,000 559,151,000 523,964,000 514,405,000 500,343,000 Sales & Revenue Net Sales Total Revenue Linear (Total Revenue) As we can see a steady increase of 2% on both sales and revenue, we can have a similar projection for 2023 assuming there will be similar growth as last 5 years. Financial data 2023 2022 Net Sales 581,956,050 567,762,000 Total Revenue 587,063,625 572,745,000 Net Sales Total Revenue 555,000,000 560,000,000 565,000,000 570,000,000 575,000,000 580,000,000 585,000,000 590,000,000 581,956,050 587,063,625 567,762,000 572,745,000 2023 Sales and revenue projecton 2023 2022

8 Propose a recommended course of action based on Interpretations of the Data Based on the last 12 months of financial data from Forbes business Wal-Mart is overall ranked as 23 rd . When it comes to sales it is ranked # 1, profit # 61, Assets #176 and market value # 14. The main competitor of Wal-Mart is Amazon which is in # 6 ranked in Forbes. Company Sales Profit Assets Market Value Walmart $572.75 $13.67 $244.86 $431.64 Amazon $469.82 $33.36 $420.55 $1,468.40 Sales Proft Assets Market Value $0.00 $200.00 $400.00 $600.00 $800.00 $1,000.00 $1,200.00 $1,400.00 $1,600.00 $572.75 $13.67 $244.86 $431.64 $469.82 $33.36 $420.55 $1,468.40 Walmart Vs Amazon Walmart Amazon By analyzing the data, it is clear that only the sales are more for Wal-Mart compared to profit, assets, and market value. When we search for Amazon, they are in 50 countries which is double compared to Walmart which has stores in 24 countries. The recommended course of action for Wal-Mart is ‘cater to your audience’ which means to start Online portals in other countries rather than opening brick and mortar stores going

9 forward. In recent years especially after pandemic consumers are used to online shopping just sitting relaxed at home and buying items in a single click. Online Retailers like Amazon has annual membership for free delivery and non-members it is free for more than 25$ value. Even though Wal-Mart has been successful for many years Amazon used its innovation on online and digital technologies which pulled most of the consumers to online shopping. Despite of the pandemic situation last 3 years the Online shopping retailers like Amazon had made tremendous profits by using their online shopping strategy to attract customer which would be the magic wand for Wal-Mart to start investing their fortune to Online shopping to be successful. Conclusion: Based on the financial data of Wal-Mart it is clear that Wal-Mart has to make strategic selection of expanding their business globally to other countries where they did not have their footprint. The current era is digital era and most of them own a smart phone and major shopping’s are done while relaxing in sofa at your house and in a single click of a button thousands of dollars are spent and delivered at your doorsteps. With all these online competitions around the world we are already into the digital world and all our shopping Wishlist are data driven. Wal-Mart should Wal-Mart should invest more on the latest tools and technologies to identify the consumers’ needs and attract their customers via online shopping. Wal-Mart strategy is to make everyday easier for busy families by investing more on ecommerce and digital platform. Using the Big data from different sources Wal-Mart is striving to improve the customer-centric online shopping experience through innovation by integrating ecommerce and retail stores in an omni-channel offering that can save time for customers.

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10 References : Norean Sharpe; Richard D. De Veaux; Paul Velleman (2019); Business Statistics https://www.mergentonline.com/companyfinancials.php?compnumber=8865 https://www.mergentonline.com/companyfinancials.php? pagetype=asreported&compnumber=8865&period=Annuals&dataarea=ALL&range=5¤c y=AsRep&scale=AsRep&Submit=Refresh&csrf_token_mol=fa2e312979 Sales boom in Walmart stores and surge online By: The Associated Press, AP Financial News, August 16, 2018 https://www.forbes.com/companies/walmart/?sh=5a6fca1ab03d Online shopping [electronic resource] / editor Professor John Fernie - Bradford, England : Emerald Group Publishing, c2005.