Week 5 Final Paper Financial Statemen

Topics: Balance sheet, Wal-Mart, Generally Accepted Accounting Principles Pages: 7 (1143 words) Published: November 18, 2014


Financial Statement Analysis of Walmart

Arlene Randolph

Acc 205 Principles of Accounting I

Instructor Hong Zhao

September 29, 2014

Introduction
The financial health of a company is monitored by the company itself, potential investors and current investors. They are monitored to determine the stability of the company, whether the company is worth investing in or the continuance of investment. The purpose of this report is to present the Walmart Stores, Inc. financial statement analysis using the data for the years 2014, 2013 and 2012. The utilization of the horizontal and ratio analysis techniques have been used for this purpose.

Walmart’s vision, through Sam Walton, to help customers “save money and live better” began in 1962 in Rogers, Arkansas. It was the desire of Sam Walton to offer “great value and great customer service”. (www.corporate.walmart.com). At the age of 44 Sam Walton opened the first Walmart store after being inspired with his store, Walton’s 5 and 10. (www.corporate.walmart.com) Walmart, with more than 11,000 stores in 27 countries is the largest company in the discount store sector. Walmart went public in 1972 with the symbol WMT listed on the NYSE. Walmart is in the discount retail industry offering everything from food to clothing, electronics to car service, etc. Walmart’s competitors include Target, Dollar General and Costco. For 2014, it appears that Walmart has its work cut out for them with the increase of Dollar General stores. “Over those last five years, Wal-Mart has managed 3.3% annualized revenue growth. Compare that to the near 11% annualized growth that one of Wal-Mart's biggest competitors, Dollar General (NYSE: DG  )” (http://www.fool.com) Target is struggling as well as their to open in the Canadian market did not go through. ”Luckily for Wal-Mart, its chief competitor Target is also struggling. Target has been facing slightly different issues, however. Target mainly operates as a North American retailer, unlike Wal-Mart with its worldwide presence, and Target's recent entry into the Canadian market did not go as planned.” (http://www.fool.com) All in all, per the Motley Crew website, Walmart is still a viable investment. “However, for long-term investors, Wal-Mart could still be a worthwhile investment.” (http://www.fool.com) Horizontal Analysis

Using the horizontal analysis method of comparing two years of financial statements or comparing the financial statements of one company with another is called horizontal analysis. “A horizontal analysis can be used to compare data from within two or more periods, side-by-side. In other words, it is intended to show the change in certain accounts from two separate accounting periods.” (2012) If comparing the sales of two years the difference in sales will be reflected as percentage (%) as well as in dollar ($). Wal-Mart Stores Inc. WMT

%Change
%Change
Income Statement

2014/2013
2013/2012
All figures in millions of dollars
31-Jan-14
31-Jan-13
31-Jan-12
 
 
Horizontal Analysis for 3 years

 
 
 
Sales
$476,294.0 
$468,651.0 
$446,509.0
1.60468
4.724625
less cost of goods sold
$358,069.0
$352,297.0
$334,993.0
1.61198
4.911765
Gross Profit
$118,225.0
$116,354.0
$111,516.0
1.58258
4.158001
Operating expenses

SG&A
$91,353.0
$88,629.0
$85,025.0
2.98184
4.066389
Operating income
$26,872.0
$27,725.0
$26,491.0
-3.17431
4.450857
Other Income/Expense
$119.0
$186.0
$161.0
-56.3025
13.44086
Interest expense
-$2,335.0
-$2,249.0
-$2,320.0
3.68308
-3.15696
EBT
$24,656.0
$25,662.0
$24,332.0
-4.08014
5.182761
income tax expense
$8,105.0
$7,958.0
$7,924.0
1.8137
0.427243
Minority interest
-$673.0
-$757.0
-$688.0
-12.4814
9.114927
Net income from continued operation
15,878.0
16,947.0
15,720.0
-6.73259
7.24022
Net income
16,022.0
16,999.0
15,699.0
-6.09787
7.647509...

References: http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=WMT
(2012) Principles of Accounting: Volume I. San Diego, CA: Bridgepoint Education, Inc.
http://www.prenhall.com/divisions/bp/app/cfl/RA/RatioAnalysis.html
http://www.fool.com/investing/general/2014/07/18/is-wal-mart-the-latest-dead-money-stock.aspx
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