Walmart Stores Inc.

Definition

Walmart Stores Inc. is a multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. It is one of the largest retailers in the world by revenue and employees.

5 Must Know Facts For Your Next Test

1. Walmart uses trade credit extensively to manage its working capital, often negotiating favorable terms with suppliers.
2. The company’s efficient supply chain management helps in maintaining low levels of inventory, which optimizes working capital.
3. Walmart’s working capital strategy includes rapid inventory turnover to ensure liquidity and minimize holding costs.
4. The retailer leverages its large scale to obtain extended payment terms from suppliers, enhancing its cash flow position.
5. Walmart's ability to maintain a positive working capital is crucial for funding daily operations without the need for external financing.

Review Questions

• How does Walmart use trade credit to manage its working capital?
• What role does Walmart’s supply chain management play in optimizing its working capital?
• Why is rapid inventory turnover important for Walmart's working capital strategy?

Related terms

Trade Credit: An agreement where a buyer can purchase goods on account without immediate cash payment.

Supply Chain Management: The management of the flow of goods and services from production to consumption.

Inventory Turnover: A financial ratio showing how many times a company has sold and replaced inventory during a given period.