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wal-mart_analysis.zipWal-Mart Analysis/ACT 5140 Spring 2 2015 Walmart assignment-2(1).doc
ACT 5140 – Accounting for Decision Makers
Walmart Analysis Assignment
Directions: Answer all the questions. Please submit your work in Word or PDF formats only. You can submit an Excel file to support calculations, but please “cut and paste” your solutions into the Word or PDF file. Be sure to show how you did your calculations. Also, please be sure to include your name at the top of the first page of your file.
Part 1
Perform a vertical and horizontal analysis of Wal-Mart Stores, Inc.’s income statements and balance sheets as of January 31, 2015. In performing this analysis, consider any notable trends or changes that you observe that may provide useful information concerning its financial condition. Also use as many years’ worth of statements as you feel necessary. You should write up your results in paragraph form.
Part 2
Assess Wal-Mart, Stores Inc. concerning liquidity, solvency, profitability, and stock performance as of January 31, 2015. For each area, you should calculate the ratios we discussed in class and provide an analysis of the ratios calculated. I include historical stock price information and outstanding common share information below.
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Fiscal Year Ended |
1/31/2015 |
1/31/2014 |
1/31/2013 |
1/31/2012 |
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Adjusted Closing Price |
$83.94 |
$71.97 |
$65.79 |
$56.32 |
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Common Shares Outstanding (millions) |
3,228 |
3,233 |
3,314 |
3,418 |
Wal-Mart Analysis/ACT 5140 Spring 2 2015 Walmart information-2(1).xls
IS
| WAL MART STORES INC | ||||
| 10-K | ||||
| Income Statement | ||||
| (Amounts in millions except per share data) | ||||
| Fiscal Year Ended January 31, | 2015 | 2014 | 2013 | 2012 |
| Revenues: | ||||
| Net sales | $482,229 | $473,076 | $465,604 | $443,416 |
| Membership and other income | 3,422 | 3,218 | 3,047 | 3,093 |
| 485,651 | 476,294 | 468,651 | 446,509 | |
| Costs and expenses: | ||||
| Cost of sales | 365,086 | 358,069 | 352,297 | 334,993 |
| Operating, selling, general and administrative expenses | 93,418 | 91,353 | 88,629 | 85,025 |
| Operating income | 27,147 | 26,872 | 27,725 | 26,491 |
| Interest: | ||||
| Debt | 2,161 | 2,072 | 1,977 | 2,034 |
| Capital leases | 300 | 263 | 272 | 286 |
| Interest expense | 2,461 | 2,335 | 2,249 | 2,320 |
| Interest income | (113) | (119) | (186) | (161) |
| Interest, net | 2,348 | 2,216 | 2,063 | 2,159 |
| Income from continuing operations before income taxes | 24,799 | 24,656 | 25,662 | 24,332 |
| Provision for income taxes: | ||||
| Current | 8,504 | 8,619 | 7,976 | 6,722 |
| Deferred | (519) | (514) | (18) | 1,202 |
| Total provision for income taxes | 7,985 | 8,105 | 7,958 | 7,924 |
| Income from continuing operations | 16,814 | 16,551 | 17,704 | 16,408 |
| Income (Loss) from discontinued operations, net of tax | 285 | 144 | 52 | (21) |
| Consolidated net income | 17,099 | 16,695 | 17,756 | 16,387 |
| Consolidated net income attributable to noncontrolling interest | (736) | (673) | (757) | (688) |
| Consolidated net income attributable to Walmart | $16,363 | $16,022 | $16,999 | $15,699 |
| Net income per common share: | ||||
| Basic income per common share from continuing operations to Walmart | $5.01 | $4.87 | $5.03 | $4.55 |
| Basic income (loss) per common share from discontinued operations | $0.06 | $0.03 | $0.01 | ($0.01) |
| Basic net income per common share attributable to Walmart | $5.07 | $4.90 | $5.04 | $4.54 |
| Diluted income per common share from continuing operations to Walmart | $4.99 | $4.85 | $5.01 | $4.53 |
| Diluted income (loss) per common share from discontinued operations | $0.06 | $0.03 | $0.01 | ($0.01) |
| Diluted net income per common share | $5.05 | $4.88 | $5.02 | $4.52 |
| Weighted-average number of common shares: | ||||
| Basic | 3,230 | 3,269 | 3,374 | 3,460 |
| Diluted | 3,243 | 3,283 | 3,389 | 3,474 |
| Dividends declared per common share | $1.92 | $1.88 | $1.59 | $1.46 |
BS
| WAL MART STORES INC | ||||
| 10-K | ||||
| Balance Sheet | ||||
| (Amounts in millions except per share data) | ||||
| January 31, | 2015 | 2014 | 2013 | 2012 |
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $9,135 | $7,281 | $7,781 | $6,550 |
| Receivables | 6,778 | 6,677 | 6,768 | 5,937 |
| Inventories | 45,141 | 44,858 | 43,803 | 40,714 |
| Prepaid expenses and other | 2,224 | 1,909 | 1,551 | 1,685 |
| Current assets of discontinued operations | 0 | 460 | 37 | 89 |
| Total current assets | $63,278 | $61,185 | $59,940 | $54,975 |
| Property and equipment, at cost | 177,395 | 173,089 | 165,825 | 155,002 |
| Less accumulated depreciation | (63,115) | (57,725) | (51,896) | (45,399) |
| Property and equipment, net | 114,280 | 115,364 | 113,929 | 109,603 |
| Property under capital lease | 5,239 | 5,589 | 5,899 | 5,936 |
| Less accumulated amortization | (2,864) | (3,046) | (3,147) | (3,215) |
| Property under capital lease, net | 2,375 | 2,543 | 2,752 | 2,721 |
| Goodwill | 18,102 | 19,510 | 20,497 | 20,651 |
| Other assets and deferred charges | 5,671 | 6,149 | 5,987 | 5,456 |
| Total assets | $203,706 | $204,751 | $203,105 | $193,406 |
| LIABILITIES AND SHAREHOLDERS EQUITY | ||||
| Current liabilities: | ||||
| Short-term borrowings | $1,592 | $7,670 | $6,805 | $4,047 |
| Accounts payable | 38,410 | 37,415 | 38,080 | 36,608 |
| Accrued liabilities | 19,152 | 18,793 | 18,808 | 18,154 |
| Accrued income taxes | 1,021 | 966 | 2,211 | 1,164 |
| Long-term debt due within one year | 4,810 | 4,103 | 5,587 | 1,975 |
| Obligations under capital leases due within one year | 287 | 309 | 327 | 326 |
| Current liabilities of discontinued operations | 0 | 89 | 0 | 26 |
| Total current liabilities | 65,272 | 69,345 | 71,818 | 62,300 |
| Long-term debt | 41,086 | 41,771 | 38,394 | 44,070 |
| Long-term obligations under capital leases | 2,606 | 2,788 | 3,023 | 3,009 |
| Deferred income taxes and other | 8,805 | 8,017 | 7,613 | 7,862 |
| Redeemable non-controlling interest | 0 | 1,491 | 519 | 404 |
| Commitments and contingencies | 0 | 0 | 0 | 0 |
| Shareholders equity: | ||||
| Common stock | 323 | 323 | 332 | 342 |
| Capital in excess of par value | 2,462 | 2,362 | 3,620 | 3,692 |
| Retained earnings | 85,777 | 76,566 | 72,978 | 68,691 |
| Accumulated other comprehensive income (loss) | (7,168) | (2,996) | (587) | (1,410) |
| Total Walmart shareholders' equity | 81,394 | 76,255 | 76,343 | 71,315 |
| Noncontrolling interest | 4,543 | 5,084 | 5,395 | 4,446 |
| Total equity | 85,937 | 81,339 | 81,738 | 75,761 |
| Total liabilities and shareholders equity | $203,706 | $204,751 | $203,105 | $193,406 |
SCF
| WAL MART STORES INC | ||||
| 10-K | ||||
| Statement of Cash Flows | ||||
| (Amounts in millions) | ||||
| Fiscal Year Ended January 31, | 2015 | 2014 | 2013 | 2012 |
| Cash flows from operating activities: | ||||
| Consolidated net income | $17,099 | $16,695 | $17,756 | $16,387 |
| (Income) Loss from discontinued operations, net of tax | (285) | (144) | (52) | 21 |
| Income from continuing operations | 16,814 | 16,551 | 17,704 | 16,408 |
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities | ||||
| Depreciation and amortization | 9,173 | 8,870 | 8,478 | 8,106 |
| Deferred income taxes | (503) | (279) | (133) | 1,050 |
| Other operating activities | 785 | 938 | 602 | 468 |
| Changes in certain assets and liabilities, net of effects of acquisitions: | ||||
| Increase in accounts receivable | (569) | (566) | (614) | (796) |
| Increase in inventories | (1,229) | (1,667) | (2,759) | (3,727) |
| Increase in accounts payable | 2,678 | 531 | 1,061 | 2,687 |
| Increase in accrued liabilities | 1,249 | 103 | 271 | 30 |
| (Decrease) Increase in accrued income taxes | 166 | (1,224) | 981 | 29 |
| Net cash provided by operating activities | 28,564 | 23,257 | 25,591 | 24,255 |
| Cash flows from investing activities: | ||||
| Payments for property and equipment | (12,174) | (13,115) | (12,898) | (13,510) |
| Proceeds from disposal of property and equipment | 570 | 727 | 532 | 580 |
| Proceeds from disposal of certain operations | 671 | 0 | 0 | 0 |
| Other investing activities | (192) | (138) | (271) | (3,679) |
| Net cash used in investing activities | (11,125) | (12,526) | (12,637) | (16,609) |
| Cash flows from financing activities: | ||||
| Net change in short-term borrowings | (6,288) | 911 | 2,754 | 3,019 |
| Proceeds from issuance of long-term debt | 5,174 | 7,072 | 211 | 5,050 |
| Payment of long-term debt | (3,904) | (4,968) | (1,478) | (4,584) |
| Dividends paid | (6,185) | (6,139) | (5,361) | (5,048) |
| Purchase of Company stock | (1,015) | (6,683) | (7,600) | (6,298) |
| Dividends paid to noncontrolling interest | (600) | (426) | (282) | (526) |
| Purchase of noncontrolling interest | (1,844) | (296) | (132) | 0 |
| Other financing activities | (409) | (260) | (58) | (71) |
| Net cash used in financing activities | (15,071) | (10,789) | (11,946) | (8,458) |
| Effect of exchange rates on cash | (514) | (442) | 223 | (33) |
| Net (decrease) increase in cash and cash equivalents | 1,854 | (500) | 1,231 | (845) |
| Cash and cash equivalents at beginning of year | 7,281 | 7,781 | 6,550 | 7,395 |
| Cash and cash equivalents at end of year | $9,135 | $7,281 | $7,781 | $6,550 |
| Supplemental disclosure of cash flow information | ||||
| Income tax paid | 8,169 | 8,641 | 7,304 | 5,889 |
| Interest paid | 2,433 | 2,362 | 2,262 | 2,346 |
Wal-Mart Analysis/ACT 5140 WALMART ASSIGNMENT TEPMPLATE NEW.doc
Nova Southeastern University H. Wayne Huizenga School of Business & Entrepreneurship
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Assignment for Course: |
ACT 5140 – Accounting for Decision Makers |
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Submitted to: |
Dr. Vik Desai |
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Submitted by: |
xxx |
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xxx |
Date of Submission: Sunday, September 27th 2015
Title of Assignment: Financial Analysis Assignment – Wal-Mart
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student's Signature: _
*****************************************************************
Instructor's Grade on Assignment:
Instructor's Comments:
ACT 5140 – Accounting for Decision Makers
Walmart Analysis Assignment
Directions: Answer all the questions. Please submit your work in Word or PDF formats only. You can submit an Excel file to support calculations, but please “cut and paste” your solutions into the Word or PDF file. Be sure to show how you did your calculations. Also, please be sure to include your name at the top of the first page of your file.
Part 1
Perform a vertical and horizontal analysis of Wal-Mart Stores, Inc.’s income statements and balance sheets as of January 31, 2015. In performing this analysis, consider any notable trends or changes that you observe that may provide useful information concerning its financial condition. Also use as many years’ worth of statements as you feel necessary. You should write up your results in paragraph form.
Part 2
Assess Wal-Mart, Stores Inc. concerning liquidity, solvency, profitability, and stock performance as of January 31, 2015. For each area, you should calculate the ratios we discussed in class and provide an analysis of the ratios calculated. I include historical stock price information and outstanding common share information below.
|
Fiscal Year Ended |
1/31/2015 |
1/31/2014 |
1/31/2013 |
1/31/2012 |
|
Adjusted Closing Price |
$83.94 |
$71.97 |
$65.79 |
$56.32 |
|
Common Shares Outstanding (millions) |
3,228 |
3,233 |
3,314 |
3,418 |
Part 1 – Vertical and Horizontal Analysis
Vertical Analysis
Vertical analysis is a method in which the relationship between items in the same financial statement is identified by converting all amounts into percentages of the total. This method is also known as the common size as it allows to compare companies of different sizes in the same industry.
This type of analysis has two main advantages; the first is that the percentages can be compared over a number of periods allowing to identify unusual changes in the accounts over time. The unusual changes can be further analyzed and action is taken to bring percentages back to normal levels. The second advantage is that financials from companies of different sizes within the same industry can be compared. This type of comparison allows seeing where companies stand versus a particular competitor or the industry. In the case of Wal-Mart the comparison is performed to industry benchmark.
The vertical analysis on the income statement is performed by comparing each expense to the net sales and the balance sheet is performed by comparing each asset to the total assets and the liabilities, long term debt and equities are shown as a percentage of the total liabilities and stockholder equity.
Income Statement
The vertical analysis of Wal-Mart’s income statement was performed by dividing each expense over the net sales. This allows to see how each dollar of sales is distrusted among the various costs, expenses and profits. It also allows to see the trends of successive years for these items. For example, -----------------------------------------------------………. The consolidated net income ------from 2012 to 2013 but then …in 2014 and ….in 2015. So provide the analysis now
Balance Sheet
The vertical analysis of Wal-Mart’s balance sheet is performed by diving assets as a percentage of total assets and current liabilities, long term debt and equities as a percentage of total liabilities and shareholder’s equity. The balance sheet provides internal and external customer and owner’s essential information about the company’s financial position at a specific moment as it reveals the assets the same thing with balance sheet…………..
Horizontal Analysis:
Horizontal analysis is a method that shows change in the amounts of financial statement items over a period of time. It is useful to evaluate trends within the company also known as the trend analysis. A base period needs to be establish which is the earliest period being analyzed. The items on the statements after the base period are compared to such. The horizontal analysis main purpose is to see how values change over time and not being utilized or distributed. The base period for the income statement and balance sheet will be 2012 for the purpose of this analysis.
Income Statement
The horizontal analysis for Wal-Mart’s income statement does not show a … trend. SAME THING HERE
Balance Sheet
The horizontal analysis for Wal-Mart’s balance sheet shows a …. trend. SAME THING HERE….
Part 2 – Ratio Analysis
Liquidity Ratios
Calculations:
· Current Ratio: total assets / total current liabilities
· Working Capital: Total assets – total current liabilities
· Acid-test ratio: (cash + accounts receivables) / total current liabilities
· Inventory turnover: cost of sales / average inventory
· Days sales in inventory: 365 / inventory turnover
· Accounts receivables turnover: total net sales / average accounts receivables
· Days sales in receivables: 365 / A/R turnover
· Free cash flow: Operating cash flow + capital expenditures
· Average Inventory: (inventory 2015 + inventory 2014)/2
· Average A/R: (accounts receivables 2015 + accounts receivables 2014)/2
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Liquidity Ratios |
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Fiscal Year Ended |
2/1/2015 |
2/2/2014 |
2/3/2013 |
1/29/2012 |
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Current ratio |
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Working capital |
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Acid-test ratio |
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Inventory turnover (times) |
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Days sales in inventory |
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Accounts receivable turnover (times) |
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Days sales in receivables |
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Free cash flow |
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Average inventory |
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Average A/R |
Analysis:
Liquidity ratios determine the company’s ability to pay off its short-term debt. The ability to turn short-term assets into cash to cover debt is very important for investor’s fundamental analysis. Wal-Mart’s current ratio has been … much l…..than the current ratio as a core part of their business is being eliminated from the calculation.
Overall the liquidity rations have been …………..…
Long-Term Solvency
Calculations:
· Debt to equity: long-term liabilities / total equity
· Interest coverage: operating income / interest expense
· Long-term liabilities: total liabilities - total current liabilities
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Solvency Ratios |
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Fiscal Year Ended |
2/1/2015 |
2/2/2014 |
2/3/2013 |
1/29/2012 |
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Debt to equity |
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Interest coverage |
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Long term liabilities |
Analysis:
The debt to equity ratio has …
Profitability Performance
Calculations:
· Asset turnover: total net revenues / average total assets
· Return on sales: adjusted net income / total net revenues
· Gross margin %: (total revenue – cost of sales) / total revenue
· Return on assets: adjusted net income / average total assets
· Return on equity: net earnings / average equity
· Average interest rate: interest expense / average total liabilities
· Average total assets: (total assets 2015 + total assets 2014)/2
· Income tax rate: Provision for income taxes / earnings before income taxes
· Net of tax interest expense: income tax rate * interest expense
· Adjusted net income: net earning + net of tax interest expense
· Average equity: (total shareholders’ equity 2015 + total shareholders’ equity 2014)/2
· Average total liabilities: (total liabilities 2015 + total liabilities 2014)/2
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Profitability Ratios |
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Fiscal Year Ended |
2/1/2015 |
2/2/2014 |
2/3/2013 |
1/29/2012 |
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Asset turnover |
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Return on sales |
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Gross margin % |
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Return on assets |
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Return on equity |
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Average interest rate |
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Average total assets |
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Income tax rate |
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Net of tax interest expense |
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Adjusted net income |
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Average equity |
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Average total liabilities |
Analysis:
Profitability ratios are important for the analysis of a company as well. They determined the company’s bottom line and its return to its investors.
The asset turnover ratio indicated that Wal-Mart is using its assets …
DuPont Model – Analysis of ROA
Calculations:
· Product: Return on sales * asset turnover
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DuPont Analysis of ROA |
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Fiscal Year Ended |
2/1/2015 |
2/2/2014 |
2/3/2013 |
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Return on assets (calculated) |
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Return on sales |
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Asset turnover |
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Product |
Analysis:
ROA has ….
Stock Performance
Calculations:
· Book value per common share: book value of equity / common shares outstanding
· P/E Ratio: adjusted closing price / earnings per share (diluted)
· Dividend yield: dividend per share / adjusted closing price
· Dividend payout: dividend per share / earnings per share (diluted)
· Adjusted basic EPS: adjusted net income / Weighted average shares outstanding: basic
· Adjusted diluted EPS: adjusted net income / Weighted average shares outstanding: diluted
· Adjusted P/E ratio: adjusted closing price / adjusted diluted EPS
· Adjusted dividend payout: Dividends per share / adjusted diluted EPS
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Stock Ratios |
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Fiscal Year Ended |
2/1/2015 |
2/2/2014 |
2/3/2013 |
1/29/2012 |
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Book value per common share |
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Earnings per share (basic) |
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Earnings per share (diluted) |
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P/E Ratio |
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Dividend yield |
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Dividend payout |
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Adjusted Basic EPS |
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Adjusted Diluted EPS |
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Adjusted P/E Ratio |
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Adjusted dividend payout |
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Book value of equity |
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Common shares outstanding |
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Adjusted closing price |
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Dividends per share |
Analysis:
Wal-Mart is a growing company. The book value has ………CONTINUE THE ANALYSIS
APPENDIX A
Wal-Mart’s Common Size Income Statement
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WAL MART STORES INC |
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10-K |
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Income Statement |
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(Amounts in millions except per share data) |
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Fiscal Year Ended January 31, |
2015 |
2014 |
2013 |
2012 |
2015 |
2014 |
2013 |
2012 |
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Revenues: |
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% |
% |
% |
% |
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Net sales |
482,229 |
473,076 |
465,604 |
443,416 |
100.00% |
100.00% |
100.00% |
100.00% |
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Membership and other income |
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Costs and expenses: |
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Cost of sales |
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Operating, selling, general and administrative expenses |
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Gross Margin |
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Operating income |
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Interest: |
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Debt |
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Capital leases |
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Interest expense |
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Interest income |
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Interest, net |
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Income from continuing operations before income taxes |
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Provision for income taxes: |
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Current |
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Deferred |
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Total provision for income taxes |
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Income from continuing operations |
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Income (Loss) from discontinued operations, net of tax |
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Consolidated net income |
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Consolidated net income attributable to noncontrolling interest |
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Consolidated net income attributable to Walmart |
APPENDIX B
Discount Department Stores Industry Benchmark Common Size Income Statement (Data Period 2013)
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Company Size |
All |
Large |
Medium |
Small |
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Size by Revenue |
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Over $50M |
$5M - $50M |
Under $5M |
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Company Count |
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Net Sales |
100% |
100% |
100% |
100% |
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Gross Margin |
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Officer Compensation |
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Advertising & Sales |
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Other Operating Expenses |
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Operating Expenses |
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Operating Income |
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Net Income |
APPENDIX C
Wal-Mart’s Common Size Balance Sheet
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WAL MART STORES INC |
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10-K |
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Balance Sheet |
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(Amounts in millions except per share data) |
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Fiscal Year Ended January 31, |
2015 |
2014 |
2013 |
2012 |
2015 |
2014 |
2013 |
2012 |
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ASSETS |
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% |
% |
% |
% |
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Current assets: |
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Cash and cash equivalents |
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Receivables |
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Inventories |
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Prepaid expenses and other |
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Current assets of discontinued operations |
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Total current assets |
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Property and equipment, at cost |
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Less accumulated depreciation |
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Property and equipment, net |
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Property under capital lease |
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Less accumulated amortization |
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Property under capital lease, net |
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Goodwill |
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Other assets and deferred charges |
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Total assets |
203,706 |
204,751 |
203,105 |
193,406 |
100.00% |
100.00% |
100.00% |
100.00% |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Short-term borrowings |
||||||||
|
Accounts payable |
||||||||
|
Accrued liabilities |
||||||||
|
Accrued income taxes |
||||||||
|
Long-term debt due within one year |
||||||||
|
Obligations under capital leases due within one year |
||||||||
|
Current liabilities of discontinued operations |
||||||||
|
|
||||||||
|
Total current liabilities |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
||||||||
|
Long-term obligations under capital leases |
||||||||
|
Deferred income taxes and other |
||||||||
|
Redeemable non-controlling interest |
||||||||
|
Commitments and contingencies |
||||||||
|
Total liabilities |
||||||||
|
|
||||||||
|
Shareholders’ equity: |
||||||||
|
Common stock |
||||||||
|
Capital in excess of par value |
||||||||
|
Retained earnings |
||||||||
|
Accumulated other comprehensive income (loss) |
||||||||
|
|
||||||||
|
Total Walmart shareholders' equity |
||||||||
|
|
||||||||
|
Noncontrolling interest |
||||||||
|
|
||||||||
|
Total equity |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
203,706 |
204,751 |
203,105 |
193,406 |
100.00% |
100.00% |
100.00% |
100.00% |
APPENDIX D
Discount Department Stores Industry Benchmark Common Size Balance Sheet (Data Period 2013)
|
Company Size |
All |
Large |
Medium |
Small |
|
Size by Revenue |
|
Over $50M |
$5M - $50M |
Under $5M |
|
|
|
|
|
|
|
Balance Sheet |
|
Cash |
|
Accounts Receivable |
|
Inventory |
|
Total Current Assets |
|
Property, Plant & Equipment |
|
Other Non-Current Assets |
|
Total Assets |
|
Accounts Payable |
|
Total Current Liabilities |
|
Total Long Term Liabilities |
|
Net Worth |
APPENDIX E
Wal-Mart’s Trend Analysis Income Statement
|
WAL MART STORES INC |
|
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|
|
10-K |
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|
|
Income Statement |
|
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|
|
|
|
(Amounts in millions except per share data) |
|
|
|
|
|
|
Base Year |
|
Fiscal Year Ended January 31, |
2015 |
% |
2014 |
% |
2013 |
% |
2012 |
|
Revenues: |
|
|
|
|
|
|
|
|
Net sales |
|||||||
|
Membership and other income |
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|
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|
|
|||||||
|
Costs and expenses: |
|||||||
|
Cost of sales |
|||||||
|
Operating, selling, general and administrative expenses |
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|
|
|||||||
|
Operating income |
|||||||
|
|
|||||||
|
Interest: |
|||||||
|
Debt |
|||||||
|
Capital leases |
|||||||
|
Interest expense |
|||||||
|
Interest income |
|||||||
|
|
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|
Interest, net |
|||||||
|
|
|||||||
|
Income from continuing operations before income taxes |
|||||||
|
|
|||||||
|
Provision for income taxes: |
|||||||
|
Current |
|||||||
|
Deferred |
|||||||
|
|
|||||||
|
Total provision for income taxes |
|||||||
|
|
|||||||
|
Income from continuing operations |
|||||||
|
Income (Loss) from discontinued operations, net of tax |
|||||||
|
|
|||||||
|
Consolidated net income |
|||||||
|
|
|||||||
|
Consolidated net income attributable to noncontrolling interest |
|||||||
|
|
|||||||
|
Consolidated net income attributable to Walmart |
APPENDIX F
Wal-Mart’s Trend Analysis Balance Sheet
|
WAL MART STORES INC |
|
|
|
|
|
|
|
|
10-K |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in millions except per share data) |
|
|
|
|
|
|
Base Year |
|
Fiscal Year Ended January 31, |
2015 |
|
2014 |
|
2013 |
|
2012 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|||||||
|
Receivables |
|||||||
|
Inventories |
|||||||
|
Prepaid expenses and other |
|||||||
|
Current assets of discontinued operations |
|||||||
|
|
|||||||
|
Total current assets |
|||||||
|
|
|||||||
|
Property and equipment, at cost |
|||||||
|
Less accumulated depreciation |
|||||||
|
Property and equipment, net |
|||||||
|
|
|||||||
|
Property under capital lease |
|||||||
|
Less accumulated amortization |
|||||||
|
Property under capital lease, net |
|||||||
|
|
|||||||
|
Goodwill |
|||||||
|
Other assets and deferred charges |
|||||||
|
|
|||||||
|
Total assets |
|||||||
|
|
|||||||
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Short-term borrowings |
|||||||
|
Accounts payable |
|||||||
|
Accrued liabilities |
|||||||
|
Accrued income taxes |
|||||||
|
Long-term debt due within one year |
|||||||
|
Obligations under capital leases due within one year |
|||||||
|
Current liabilities of discontinued operations |
|||||||
|
|
|||||||
|
Total current liabilities |
|||||||
|
|
|||||||
|
Long-term debt |
|||||||
|
Long-term obligations under capital leases |
|||||||
|
Deferred income taxes and other |
|||||||
|
Redeemable non-controlling interest |
|||||||
|
Commitments and contingencies |
|||||||
|
Total liabilities |
|||||||
|
|
|||||||
|
Shareholders’ equity: |
|||||||
|
Common stock |
|||||||
|
Capital in excess of par value |
|||||||
|
Retained earnings |
|||||||
|
Accumulated other comprehensive income (loss) |
|||||||
|
|
|||||||
|
Total Walmart shareholders' equity |
|||||||
|
|
|||||||
|
Noncontrolling interest |
|||||||
|
|
|||||||
|
Total equity |
|||||||
|
|
|||||||
|
Total liabilities and shareholders’ equity |
$203,706 |
105% |
$204,751 |
106% |
$203,105 |
105% |
$193,406 |
�Don’t copy this chart but just an example of how you can be imaginative(
15
Wal-Mart Analysis/NOTES FOR HORIZONTAL AND VERTICAL ANALYSIS.docx
NOTES FOR HORIZONTAL AND VERTICAL ANALYSIS
Horizontal analysis (also known as trend analysis) is a financial statement analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time. It is a useful tool to evaluate the trend situations.
The statements for two or more periods are used in horizontal analysis. The earliest period is usually used as the base period and the items on the statements for all later periods are compared with items on the statements of the base period. The changes are generally shown both in dollars and percentage.
Dollar and percentage changes are computed by using the following formulas:
Horizontal analysis may be conducted for balance sheet, income statement, schedules of current and fixed assets and statement of retained earnings.
Example:
An example of the horizontal analysis of balance sheet, schedule of current assets , income statement and statement of retained earnings is given below:
Comparative balance sheet with horizontal analysis:
Comparative schedule of current assets:
Comparative income statement with horizontal analysis:
Comparative retained earnings statement with horizontal analysis:
In above analysis, 2007 is the base year and 2008 is the comparison year. All items on the balance sheet and income statement for the year 2008 have been compared with the items of balance sheet and income statement for the year 2007.
The actual changes in items are compared with the expected changes. For example, if management expects a 30% increase in sales revenue but actual increase is only 10%, it needs to be investigated.
Vertical analysis (also known as common-size analysis) is a popular method of financial statement analysis that shows each item on a statement as a percentage of a base figure within the statement.
To conduct a vertical analysis of balance sheet, the total of assets and the total of liabilities and stockholders’ equity are generally used as base figures. All individual assets (or groups of assets if condensed form balance sheet is used) are shown as a percentage of total assets. The current liabilities, long term debts and equities are shown as a percentage of the total liabilities and stockholders’ equity.
To conduct a vertical analysis of income statement , sales figure is generally used as the base and all other components of income statement like cost of sales, gross profit, operating expenses, income tax, and net income etc. are shown as a percentage of sales.
In a vertical analysis the percentage is computed by using the following formula:
A basic vertical analysis needs an individual statement for a reporting period but comparative statements may be prepared to increase the usefulness of the analysis.
Example:
An example of the vertical analysis of balance sheet and income statement is given below:
Comparative balance sheet with vertical analysis:
Current assets:
2008: (550,000 / 1,139,500) × 100 = 48.3% 2007: (530,000 / 1,230,500) × 100 = 43.3%
Comparative income statement with vertical analysis:
Cost of goods sold:
2008: (1,043,000/1,498,000) × 100 = 69.6% 2007: (820,000/1200,000) × 100 = 68.3%
Vertical analysis states financial statements in a comparable common-size format (percentage form). One of the advantages of common-size analysis is that it can be used for inter-company comparison of enterprises with different sizes because all items are expressed as a percentage of some common number. For example, suppose company A and company B belong to same industry. A is a small company and B is a large company. Company A’s sales and gross profit are $100,000 and $30,000 respectively whereas company B’s sales and gross profit are $1,000,000 and $300,000 respectively. If vertical analysis is conducted and sales figure is used as base, it would show a gross profit percentage of 30% for both the companies as shown below:
|
Company A and B Comparative Income Statement For the year ended……. |
|
|
|
|
|
|
Company A |
|
Company B |
|
|
Sales |
100,000 |
100% |
1,000,000 |
100% |
|
Cost of goods sold |
70,000 |
70% |
700,000 |
70% |
|
|
——— |
|
———– |
|
|
|
30,000 |
30% |
300,000 |
30% |
|
|
——— |
|
———– |
|
