Answer to Question #288022 in Management for Zeinab

Question

Please select an organisation of your choice in order to answer all parts of the EOMA below:

Part a (1,000 words)

Critically evaluate the capital structure of your chosen organisation and discuss whether this capital structure is aligned to the organisation’s strategic goals. For example, does your organisation have a greater degree of debt or equity (or its equivalent in the case of not for profit or public sector organisations) and how does this impact upon the gearing of the organisation? You should also consider how the organisation views risk and return (or its equivalent in the case of not for profit or public sector organisations).

Answer 1

Walmart's (WMT) financial structure is a mix of debt and equity. The retailer's total debt (XRT) is $56.6 billion, which includes both short and long-term debt. Correspondingly, as a percentage of equity and total assets, its debt is 69.6 percent and 27.7 percent. The short-term goal is to reduce liability/increase cash, hence improving underperforming ratios, while the long-term goal is to sustain sales and profits while continuing to expand internationally. The potential negative repercussions of the planned modifications must also be examined for management to make the best option. Possible adjustments in the following areas should be investigated to satisfy company goals: cash and marketable securities, short-term financing, credit policies, and inventory management. Alterations to the capital structure can impact the cost of capital, the net income, the leverage ratios, and the liabilities of publicly traded firms. Walmart is regarded as a reliable company. Walmart has a Sharpe Ratio of 0.0441, indicating that the company earned 0.0441 percent return per unit of risk during the last three months. it is found that twenty-seven technical indicators for Walmart are employed to assess the firm's growth unpredictability.