Walmart overall financial health slp bus 305module 4 - Essay Example

Please put here Please put your here Please put the of the here 27th May 2008 Overall Financial Health of Wal-Mart1. Assessment of the overall financial health of Wal-MartThe following financial data of the company for a period of 3 years i.e. from 2006 to 2008 is given below which clearly indicates the financial health of the company (Reuters.com).RevenuePeriods200620072008April70755.079676.086410.0July76697.085430.093012.0October75397.084466.091949.0January89252.099078.0107428.0Totals312101.0348650.0378799.

0 Note: Units in Millions of U.S. DollarsEarnings per SharePeriods200620072008April0.593570.637890.68459July0.682540.715240.75584October0.580950.621620.70439January0.868350.948031.02451Totals2.723972.921793.16405Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=WMT.N If we look at the above information provided, it is very much clear that neither the revenue nor the earning per share of the company i.e. Wal-Mart Stores incorporation has decrease. Both the aspects have continuously increased without even a slightest slump.

This makes clear that the overall financial health of the organization is pretty good. 2. According to the Federal Reserve’s Policy of money and interest rates, Producer Price index (PPI) is one of the important factors that would possibly have an impact on financial health of any business. The PPI generally is a predictor of what will happen at the consumer level in the future. So it gives you a look ahead at what to expect in terms of interest rates (Woodruff). Inflation is another aspect that would affect the organization.

When the prices of essential commodities like rice, wheat, cooking gas go up and people spend more money for the same goods and services then it is inflation. Essentially inflation indicates that the value of money is going down and it takes more money to buy the same basket of goods. This will definitely lead to losses by business organizations as people would not be ready to spend such huge amount for the goods sold unless it is really essential.3. If the Federal Reserve acts upon lowering the inflation, then it would best do it by maintaining price stability.

Price stability preserves the integrity and purchasing power of the money in the economy. When prices are stable, people can hold money for transactions and other purposes without having to worry that inflation will eat away at the real value of their money balances (Bernanke). If the Federal Reserve lowers inflation by way of maintaining price stability, then the people would not worry about the prices of the goods and so purchasing goods by the consumers would get into normal routine without the fear of the increasing prices.

This would help the organization benefit and indeed affects the organization positively. BibliographyBernanke, Ben S. Board of Governors of the Federal Reserve System. 24 February 2006. 27 May 2008 .Reuters.com. Wal-Mart Stores Inc. Financial highlights. 27 May 2008. 27 May 2008 .Woodruff, Tom. A borrowers guide to forecasting interest rates . 23 June 2007. 21 May 2008 .