By Trefis.comWal-Mart ( WMT) is by far the largest retailer in the world with more than $400 billion in store revenues in 2009, far ahead of competitors like Costco ( COST), Target ( TGT) and Best Buy ( BBY). Retail and consumer goods manufacturers realize significant sales through Wal-Mart's retail channel. This gives Wal-Mart leverage to influence and push suppliers to sell at cheaper prices. Wal-Mart, with its power over suppliers and strong credit quality, can thus efficiently manage its working capital. Below we briefly discuss the components of Wal-Mart's working capital, and how they together add value to the company.
We have conservatively estimated that Wal-Mart's net working capital (as a percentage of Wal-Mart's revenues) remain flat. However, you can modify our forecast below to see how Wal-Mart's stock could be positively impacted if its net working capital (as % of revenues) were to decrease over time as a result of Wal-Mart's ability to grow its payables faster than its inventory.Code for chart of Wal-Mart's Net Working Capital as % of Revenues: You can see our complete $65 Trefis price estimate for Wal-Mart's stock here .