Comprehensive INCOME AND RETAINED EARNINGS ANALYSIS PART 2

Walmart Inc. Analysis

Kerry Bolander

June 8th, 2018

Comprehensive income which is one of the most important financial statements is basically the net asset change in a company from non-owners over a certain period of time (Nishikawa, Kamiya & Kawanishi, 2016). It gives an all-inclusive view of income of companies that was not captured fully by the income statement. Comprehensive income comprises of net income as well as unrealized income, for instance, unrealized gains/losses on derivative/hedge financial instruments and losses/gains of foreign transactions of currency. The comprehensive income for Walmart Inc. recorded an increase from the year 2016 to 2017 and also from the year 2017 to 2018.

Items flowing through Walmart’s comprehensive income are as follows:

· Cash flow hedges. The company recorded an increase from the year 2017 to 2017 as well as from the year 2017 to 2018.

· Minimum pension liability which declined from the year 2016 to 2017 but in the year 2017 to 2018 there was an increase far above the 2016 recorded level.

· Unrealized gain on available-for-sale securities recorded a rise from the year 2016 to 2017 as well as from the year 2017 to 2018.

· Currency translation and others showed an increase for the year 2016 to 2017 as well as for the year 2017 to 2018.

The comprehensive income for is higher than the net income. This is because comprehensive income, which indicates the equity changes from non-owner sources, comprised of the net income and other comprehensive income.

The current Earnings per Share for Walmart Inc. is $3.34 and $4.50 and $4.67 for the years 2017 and 2016 respectively. For the year 2018, the Basic Earnings per Share is $3.29 while for the years 2016 and 2017 is $4.40 and $4.58 respectively. The diluted earnings per share for are $3.28, $4.38 and $4.57 for the years 2018, 2017 and 2016 respectively.

According to the financial data, earnings per share for the company have decreased for the last two years. The comprehensive income, on the other hand, shows an increasing trend for the last two years.

In the past three years, the company issued dividends which had a +2% change for the years 2016 and 2017 and +2.1% change for the year 2015. The amounts for the years 2015, 2016 and 2017 were $0.49, $0.50 and $0.51 respectively. However, the stock dividends, as well as the stock splits, have not been issued for the past three years.

Since the week 2 analysis, the company’s financial health has changed. As opposed to the earlier analysis, the company is now experiencing a rise in its openings which shows a future significant rise in the future based on the data pattern from the New York Stock Exchange (“Walmart Inc. (WMT)”, 2018).

References

Nishikawa, I., Kamiya, T., & Kawanishi, Y. (2016). The definitions of net income and comprehensive income and their implications for measurement. Accounting Horizons, 30(4), 511-516.

Walmart Inc. (WMT). (2018). Retrieved from https://finance.yahoo.com/quote/WMT/

Walmart Investor Relations - Investors - Financial Information - Annual Reports & Proxies. (2018). Retrieved from http://stock.walmart.com/investors/financial-information/annual-reports-and-proxies/default.aspx , http://s2.q4cdn.com/056532643/files/doc_financials/2018/annual/WMT-2018_Annual-Report.pdf , http://s2.q4cdn.com/056532643/files/doc_financials/2017/Annual/WMT_2017_AR-(1).pdf , http://s2.q4cdn.com/056532643/files/doc_financials/2016/annual/2016-Annual-Report-PDF.pdf and http://s2.q4cdn.com/056532643/files/doc_financials/2015/annual/2015-annual-report.pdf