Financial Reporting

Financial Reporting Paper Part 1

This week's problem asked Team B to take a closer look at Wal-Mart's reporting for this last year. Team B looked at and analyzed the assets, revenues, and incomes. In the report below is Team B's analysis and findings of Wal-Mart's annual report.

What are the company's total assets at the end of its most recent annual reporting period? Why is this important?

Wal-Mart shows for its fiscal year ending January 31, 2013 to have total assets equaling (in millions) $203,105. These assets include cash and cash equivalents, receivables, inventories, prepaid expenses, property and equipment, goodwill, and other assets and deferred charges. The total assets Wal-Mart shows is important because the CEO, board of directors, inventors, and potential investors use this information to stay informed on the resources Wal-Mart owns. The interested parties can view whether the assets are substantial enough for the company to pay its debt and continue growing. The total assets show cash in pocket for a company and the ability for a company to liquidate its assets as needed for operating cost and expenses.

What are the total assets at the end of the previous annual reporting period?

Wal-Mart shows total assets for the fiscal year ending January 31, 2012 to be (in millions) $193,406. This calculates out to be a 5% increase in assets in one year. Interested parties, such as investors or potential investor can use this information as part of the picture about the health of the company and the potential for further growth.

How much cash and cash equivalents did the company have at the end of its most recent annual reporting period?

Wal-Mart shows for its fiscal year ending January 31, 2013 to have total cash equivalents equaling (in millions) $7,781. This is important because cash and its equivalents is Wal-Mart's most liquid asset. It can be used quickly for liabilities and other expenses and is available the quickest in an emergency situation.

What amount of accounts payable did the company have at the end of its most recent annual reporting period?

Accounts payable are very important to a business. Accounts payable show how much a company owes a supplier for things they have purchased on credit. The suppliers usually bill the company for any debt owed. After carefully reviewing the accounts payable section of Wal-Mart's annual financial report, the balance sheet showed there was not much change between 2012 and 2013 as of January 31. In 2012 there was $36,608 (in millions) in accounts payable. In 2013 there was $38,080 (in millions) in accounts payable. This was an increase from the previous year in the amount of $1,472 (in millions). It is important to maintain good standings with suppliers that way the company is able to pay them monthly instead of each time the company receives merchandise. Developing this kind of organization makes it easier to maintain records of what money has been spent.

What are the company's net revenues for the last three annual reporting periods?

The net revenue for the last three annual reporting periods of Wal-Mart is $469,162, $446,950, and $421,849 (in millions) for the years 2013, 2012, and 2011. The percentage changes in the last three annual reporting periods are 5.0%, 6.0%, and 3.4% for the years 2013, 2012, and 2011. The way that these revenues are determined is by looking at "the Company's performance metrics: ... growth, leverage, and returns" (pg. 19); for net sales, growth will be discussed. The growth focuses