Wal-Mart Finance Essay Example | Topics and Well Written Essays - 2000 words

Wal-Mart Finance - Essay Example In US, Wal-Mart operates over 4,300 stores and also operates the Sam’s Club chain. Wal-Mart Stores US have different subsidiaries namely Wal-Mart Discount Stores in 692 locations, Wal-Mart Supercentres in 2933 locations, Wal-Mart Neighborhood Markets in 183 locations, SAM’s CLUB in 609 locations and small format stores. In Argentina, Wal-Mart has 4 subsidiaries with 64 retail chain units. Wal-Mart has 10 subsidiaries in Brazil with 484 units in their retail chain. Wal-Mart Canada has 2 subsidiaries with 325 units of retail outlets. In Chile, there are 285 units in their retail chain under 6 subsidiaries. In China Wal-Mart have 6 subsidiaries under which there are 338 units. In Costa Rica Wal-Mart have 4 subsidiaries with a retail chain of 183 units. Under Mexico y Centroamerica there are 3 subsidiaries also performs business in El Salvador with 78 retail chain units. In Germany, Wal-Mart had 85 stores which were taken over by Metro and now Wal-Mart has no operational ac tivities in Germany. (Wal-Mart abandons German venture) In India Wal-Mart have 6 retail chain units under the subsidiary called as Best Price. Mexico y Centroamerica also operates at Guatemala, Honduras and Nicaragua with 177 units, 58 units and 62 units of retail outlets under them. In Mexico Wal-Mart have 1789 retail outlets under 6 subsidiary of Walmart de Mexico y Centroamerica. ... idiaries of Wal-Mart in the various nations mentioned above were under taken by Wal-Mart with the help of acquisitions, some of them are Asda, the Seiyu Ltd., Seiyu Group, etc. (International Operations) For Wal-Mart if we divide the geographic region of operation as International and US market. Then it will be evident that, the Net Sales value of Wal-Mart in US exceeded over $260 billion and 3,804 retail units for the year of 2010-11. The operating income also increased by 3.1% to $20 billion (approx). While the consolidated net sales figure of Wal-Mart in the 15 countries they are operating net sales value amounted to $109 billion and 4,557 retail units for the year 2010-11. The net sales also grew by 12% and the operating income increased by $5.6 billion. The net sales value of Sam’s Club was $49 billion and 609 retail units for the year 2010-11. The increase in net sales was 3.5% over the previous year. (Wal-Mart 2011 Annual Report, 4-9) b) Wal-Mart’s Foreign Exchan ge (FX) Risk Management Policy Is centralized or decentralized? A firm opts to take risk for maximizing their profit on their areas of unique expertise. While, a firm with non-financial activities tries to minimize their foreign exchange risk and interest rate risk (Wallace, 2). Wal-Mart as a retail management chain operates in US and 15 other countries. As per the Foreign Currency Translation policy of Wal-Mart â€Å"The assets and liabilities of all foreign subsidiaries are translated using exchange rates at the balance sheet date. The income statements of foreign subsidiaries are translated using average exchange rates. Related translation adjustments are recorded as a component of other accumulated comprehensive income.† (Reimer, 774) This shows that all the financial transaction systems are