Wal-Mart Capital Structure and Financial Analysis Essay

Wal-Mart Capital Structure and Financial Analysis - Essay Example Total Assets (Fixed + Current) = $27,638_ x 100 $120,223 = 22.9% Debt to Equity Ratio The debt to equity ratio measures the relationship between a company's debt capital and equity capital. It shows the percentage of a company's equity that has been financed by external debts. The debt-to-equity ratio for Wal-Mart has been calculated as: Debt-to-Equity Ratio = Total Debt Capital x 100 Total Equity Capital = $27,638 x 100 $49,396 = 55.95% CALCULATION OF WEIGHTED AVERAGE COST OF CAPITAL In the Weighted Average Cost of Capital (WACC) involves the calculation of separate items in the capital employed and then weighting the cost of each element by its proportion of the total capital employed. There are following factors in the Wal-Mart's total capital: Equity (Common Stock) Debt (Long-term Debts) $ % Of Total 4,311 Common Stock of $0.10 (par) 423m 1.75% Long-term Debt 23,669m 98.24% Total Capital Employed 24,092m 100% Cost of Equity The cost of equity estimates the cost of common and preferred stock. But for Wal-Mart, this calculation will not include preference stock because the company has not issued any preference shares. The analysis of Wal-Mart's annual report reveals that the company is expecting to pay $0.150 dividend per share to its common shareholders. For dividend growth, we assume it to be 10% annually. The cost of common share capital has been estimated with the help of following formula: Cost of Common Share Capital = (Next annual dividend / current market price) + annual dividend growth = ($0.150 per share / $50.49 per share) + 10% = 10.29% per annum. Cost of Debt The calculation of cost of debt will encompass all the interest bearing long-term debts of the company. According to the Wal-Mart's...There are following factors in the Wal-Mart's total capital: The cost of equity estimates the cost of common and preferred stock. But for Wal-Mart, this calculation will not include preference stock because the company has not issued any preference shares. The analysis of Wal-Mart's annual report reveals that the company is expecting to pay $0.150 dividend per share to its common shareholders. For dividend growth, we assume it to be 10% annually. The cost of common share capital has been estimated with the help of following formula: The calculation of cost of debt will encompass all the interest bearing long-term debts of the company. According to the Wal-Mart's annual report, the company's weighted average effective interest rate on long-term debt is 4.08% in 2005. The tax rate applicable to the company for the year is 34.7%. The cost of long-term debt has been estimated as: As analysed from the company's financial statements and the calculation of financial ratios, the capital structure of Wal-Mart has become evident. Wal-Mart has structured its capital funding in a way its external debts or borrowings do not exceed its total equity to a greater extent.

Sustainable Tourism Essay Example | Topics and Well Written Essays - 3000 words

Sustainable Tourism - Essay Example It has attributed to change in the tourism industry. Development and marketing strategies have been included into the industry hence ensuring the strength and uniqueness of the sector (Cerina, Markandya & McAleer, 2010). The sustainable tourism has brought with it development benefits to the locals (Jamieson, 2006). It has resulted in the creation of jobs to the locals and hence enhancing their life improves in society. As compared to the past form of tourism where the locals benefited less the new form enhanced more opportunities. The locals also benefited in since there has been creation of business resulting from sustainable tourism (Miller & Twining-Ward, 2005). The infrastructure improvement is evidence of sustainable tourism the sector has ensured the locals enjoy the benefits of the tourism industry. The result of sustainable tourism is increased revenue. The revenue collected from the sector is then channel into other economic activities and the remainder reinvested into the sector. The re investment aspect makes the practice unique as compared to other forms of tourism. Money acquired from the sector is then used in conservation and community based project with the aim of involving the locals and the sector (Robinson & Heitmann, 2011). In Black Sea region, tourism has recognized the way of life of the locals and their value and the determination in promoting tourism, this has made hence locals take responsibility feeling part of the process. These are the reasons sustainability now pervade all forms of tourism development in turkey (Wang, 2011). Current Approaches to Tourism Development Tourism in Black Sea region has had many approaches which mainly focused on environmental and economical and socio cultural aspects (Castellani & Sala, 2009). The importance of the three is ensuring that as much as the sector targets to attract more players, the three are then combine to form a more sustainable tourism industry. They include ecotourism at Karagol-Sahara national parks done based in proving the values and benefits of the tourism industry and still keeping in mind the environmental factor. It has included the private sector to its policies. Ecotourism lacks in the ability to gather more tourist. The limited number of tourist generates less revenue, due to their small number of tourist. They lack in physical infrastructure will eventually affect the entire industry (Edgell, 2006). The form of tourism approach may hence result to negative effects and the whole issue of sustainable tourism may be put to test. Ecotourism focuses on the environmental factor of the tourism industry. The other approach by the Karagol-Sahara national parks is pro-poor tourism in which it focuses on profits from the industry being channeled to the poor in society (Herremans, 2006). The aim of the tourism practice is to try and eradicate poverty amongst the local communities. The practice usually focuses on creation of job opportunities by reinvesting the rev enue collected to other economical uses. The tourism approach main components include improving the available economic benefits. The other component is dealing with both social and environmental impact lastly it focuses on policy reforms in that the normal way of doing business is transformed to include the plights of the local people (Knowles, Diamantis & El-Mourhabi, 2004). Lastly is the conventional tourism in which money from tourist is not channeled to the