Annual Report Project-WAL MART - Essay Example

Annual Report Project- Wal-Mart Wal-Mart is operated by a Board of Directors, which consists of fifteen members, divided into five separate committees. Committees include audit, strategic planning and finance, compensation, nominating and governance, executive and global compensation. Wal-Mart’s executive committee consists of Michael Duke, who is the Chief Executive Officer and Robson Walton acts as Chairman of the Board of Directors. Christopher Williams is also Chairman of the Board of Directors and is the Chief Executive Officer of an investment bank, The Williams Capital Group L.P. Wal-Mart currently has twelve executive officers, with each presiding over a different department.

Though Wal-Mart is owned by the same subsidy as Sam’s Club, Brian Cornell is the President and Chief Executive Officer. He is the only executive entirely responsible for the management of Sam’s Club. Wal-Mart’s core values represent the company’s community commitment, Wal-Mart strives to create economic opportunity, achieve environmental sustainability, promote healthy living and community involvement and develop responsible sourcing (Wal-Mart). Wal-Mart created their sustainability program in 2005 and hopes to achieve three goals; 100% supplied by renewable energy sources, create zero waste and carry products which promote sustainability of the environment and people.

Wal-Mart contributes too many charities around the world and works to end world hunger needs while also providing healthier choices for consumers. Due to continuous expansion Wal-Mart’s net sales increased in 2011, 3.4%, from 2010. Net sales combined from Wal-Mart International, Wal-Mart US, and Sam’s Club reached 418 million, with 63% of sales through Wal-Mart US and the largest increase was through Wal-Mart International, partly due to currency exchange rates which increased net sales profits by 4.

5 billion, while comparable stores and fuel sources overall decreased by 0.6% and 0.8% (Wal-Mart 2011 Annual Report, 2012). Operating expenses increased by 1.7% in 2011 and operating expenses remained low due to improved productivity and organizational changes that were made during 2010. 2010 operating expenses outpaced net sales due to increased health benefit charges, restructuring and increased advertising prices. Free cash flow is the amount of funds available after the payments that are required for property and equipment and cash flow generated in 2011 equaled 10.

9 billion, a decrease from 2010’s cash flow which equaled 14 billion, this difference is attributed to an increase in inventory investments and was also countered by an increase in accounts payable. Free cash flow is used to fund global expansion programs and to fund operations, remaining cash flow funds dividends on stock and share repurchases. Dividends are paid to shareholders through various compensation plans (Wal-Mart 2011 Annual Report, 2012, p 38) and the combined costs of these plans totaled 371 million, 335 million and 302 million for fiscal years 2009-2011.

These expenses include restricted stock and performance share awards, restricted rights and stock options. A shareholder stock incentive plan was created in 2010 and grants stock options and other awards to associates and non-directors and 210 million shares have been registered, the company believes this to be a fair compensation plan for shareholders. As a company Wal-Mart is obviously a strong investment though growth returns and gains may be slow, they will be reliable as Wal-Mart continues to gain strength in markets internationally.

Wal-Mart International shows the most potential for increased growth as many of these markets are new sources of funds that the company will be able to capitalize on. References Walmart 2011 Annual Report: Helping people live better. (2012). Walmart Stores – We save People Money so They Can Live Better. Retrieved February 20, 2012, from http://walmartstores.com/sites/annualreport/2011/responsibility.aspx Wal-Mart 2011 Annual Report. (2012). Wal-Mart Stores. Retrieved February 20, 2012, from http://walmartstores.

com/sites/annualreport/2011/financials/Walmart_2011_Annual_Report.pdf