RETAIL MARKET STRATEGY

China World wide

Positioning Super Centers

Store Location Rural Town

Price Low Price Low Price

Promotion

Store Atmosphere

Wal Mart Financial SummaryDollar Amount in Million

2005 2004 2003

Net Sales 285222 256329 229616

COGS 219793 198747 178299

Gross Margin (Net Sales - COGS) 65429 57582 51317

Operating Expenses 51105 44909 39983

Interest Expenses 986 832 927

Total Expenses 52091 45741 40910

Net PBT 13338 11841 10407

Total Assets 120223 105405 92900

Inventories 29447 26612 24401

Owners Equity 49396 43623 39461

Net Profit Margin Net Sales - COGS - Expenses/ Net Sales 4.6764 4.6195 4.5323

Inventory Asset Ratio Net Sales/ Total Assets 2.372441213 2.431848584 2.471646932

Inventory Turnover Ratio Net Sales/ Avg Inventory 9.685944239 9.632083271 9.410106143Financial Leverage Total Asset/Owners Equity 2.433861041 2.416271233 2.354223157

ANALYSIS

•As the Net profit margin is increasing, it indicates as of how efficient the company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting revenue into actual profit.

•As the Inventory asset ratio has decreased over a period of time, it shows the ability to generate less revenues over the total assets for the following year as compared to previous year.

•High inventory turnover ratio implies either strong sales or ineffective buying (the company buys too often in small quantities, therefore the buying price is higher).A high inventory turnover ratio can indicate better liquidity, but it can also indicate a shortage or inadequate inventory levels, which may lead to a loss in business.

•The financial leverage ratios measure the overall debt load of a company and compare it with the assets or equity. Here it is showing how much of the company assets belong to the shareholders rather than creditors.