Question

Visit Yahoo Finance and study the income statements of Apple (AAPL) and Walmart (WMT). You can view the financial statements of all companies by clicking on the "Financials" tab.

What are the Total Revenue and Net Income of Apple and Walmart. Although Walmart's Total Revenue are nearly double Apple's Total Revenue, Apple's Net Income is nearly six times greater than Walmart's. Why do you think Apple has a much a higher Net Income than Walmart?  

your answer should be 200 words

Answer 1

The year I have chosen is 2018 and the data taken from yahoo finance and find it below:

Apple:

Total revenue=265595000 and Net income=59531000

Walmart:

Total revenue=500343000 and Net income=10523000

The reason why the total revenue of Walmart is double that of Apple is the industry where Walmart is serving caters to all the consumers and while Apple is consumer specific as it serves only premium customers. There is product differentiation associated with apple products so they can charge the premium on them while Walmart sells groceries which are price sensitive and we cannot charge more price. The margin associated with Apple is much higher because of this. Apple products include iphones, mac, watches, ipad where the gross margin for each of it is above 50% as it is technology oriented and it provided products to customers which they never imagined will exists and it will always have first mover advantage. Walmart competition is intense with both offline and online groceries and the margin Is more for own produced products but most of them they sell are third part products where the margins are wafer thin.