Wal-Mart and Target Essay Example

Wal Wal-Mart and Target Essay Wal-Mart and Target Essay SIC codes can be used to bring together companies that produce similar products or services. Wal-Mart and Target are part of SIC Code 5331 for Variety Stores along with other major companies like Costco, K-Mart, and Dollar General (Osha. gov, 2005). The Arkansas-based Wal-Mart tops the list as the nations largest retailer with 2003 sales of $258. 68 billion, an 11. 7 percent increase over the previous year (Melody Vargas, 2005). A financial statement includes a companys revenue. Typically the revenue listed in the financial statement covers a period of 12 consecutive months. Cost and expenses, which indicate a companys cost of sales, operating, selling and administrative costs. Assets are also listed in a financial statement. The assets provide more information about the value of the property the company owns. For example, the cash on hand the company has property, plant and equipment, prepaid expenses. Wal-Marts Audit Committee consists of four directors. The members of the Committee are Steve Friedman, Roland Hernandez, who is the Committees chair, Dr. Fred Humphries and Dr. Paula Stern (Issue watch, 2001). Wal-Marts management is responsible for Wal-Marts internal controls and financial reporting. Ernst Young LLP, Wal-Marts independent auditors, are responsible for auditing Wal-Marts annual consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report on those financial statements (Issue watch, 2001). The Audit Committee monitors and oversees these processes, and recommends to the Board for its approval a firm of certified independent accountants to be Wal-Marts independent auditors (Issue watch, 2001). According to Targets 2004 annual financial statement, management is responsible for the consistency and integrity of the information in the annual report. Target claims to maintain comprehensive systems of internal controls that they believe provide reasonable assurance (Target. com, 2005). Targets financial statements have been audited by Earnest and Young LLP, an independent public accounting firm (Target. com, 2005) Wal-Mart and Target can be compared on various similarities but there are definitely some distinctive differences. Stock information is one differentiation between the two. According to Market watch Target Corporation today has reported that the companys net sales increased 11. 4%. This increase is shown in their revenue increase from 3. 866 billion to 4. 306 billion. Target retail store sales increased 5. 6%. In comparison Wal-Mart experienced an increase as well. According to second quarter reporting there was a 2. 8 billion dollar increase for the second quarter 2005. Net sales for 2005 were 76. 8 billion with a 10. 2 % increase. Wal-Mart CEO and President stated, I am proud that the hard work of our associates allowed us to report another record quarter (Marketwatch. com). The dividends declared per common share ranged over a period of 3 three-month quarters from $0. 09 to $ 0. 52. The footnotes indicated during the first quarter of fiscal 2005, the companys board of directors declared an annual dividend of $0. 52 per share, or $2. 2 billion, on shares of the companys common stock (Edgar Online, 2005). NYSE is the stock index on which both companies are traded on. They can be identified on the stock exchange be there stock ticker symbols. Target is TGT, and Wal-Mart is reported as WMT. Both companies have experienced and increase in stock prices. Currently Target is 52. 55, with a daily high of 52. 85 and a low of 52. 25. The stock opened on 11 October at 52. 22. Target stock prices have risen . 33 cents or 0. 63%. Wal-Mart is marketed at 45. 25 also having a daily high of 45. 20 and low of 44. 55. Wal-Mart current stock price is now up about . 51 cents or, 1. 2 %. Both companies have been able to provide dividends to their shareholders. Wal-Mart and Target show similarities in that each of them reflected in their financial statements that they both have common, preferred and treasury stocks. According to the stock quote listed at Investorsguide. com, Wal-Mart currently has $4. 15 billion outstanding shares of common stock. The 2005 Annual Report for Wal-Mart Stores indicates that after considerations were primarily given to the companys cash needs, cost of borrowing, and the market price of its stock, $4. 5 billion of common stock was repurchased by the company during fiscal 2005. As of October 10, 2005, Target Corporations outstanding stock is $884. 66 million (Investorsguide. com, 2005). In January 2005, Target authorized 6,000,000,000 common stock shares and 5,000,000 preferred stock shares, although at the time, none of the preferred stock shares were issued or outstanding, and no current information was available from this source (investors. target. com). Targets Board of Directors also initiated a repurchase plan of $3 billion of common stock back in June of 2004. With so much negative publicity it is not unlikely that Wal-Mart stock would not be doing extremely well. It seems as though Wal-Marts stock continues to decline while Target is on the incline with Wal-Marts 52 week high at 57. 89 which was on November 15,2004 and the 52 week low at 42. 31 on September 22,2005. On the contrary Targets 52 week high is at 60. 00,their high was recent on July 20,2005, with the 52 week low being at 45. 55 on April 29,2005. After conducting brief examinations of each companys financial standings, there were no indications of outstanding bonds for either company. Based on the information provided and reflected in the preceding paragraphs, it is concluded that both of these companys are definitely doing big business. Whether the consumer decides to shop Target or Wal-Mart is a matter of preference. Wal-Mart prides itself on one stop shopping with the super Wal-Mart offering everything from groceries to car tires. Target on the other hand draws thousands of customers weekly and still remains a force to be recognized in the specialty retail arena. Each company has an impressive financial report and would likely make a good investment option.