A Discussion for Wal-Mart's Financial Statements (Other (Not Listed) Sample)

A Discussion for Wal-Mart’s Financial Statements
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Balance Sheet  HYPERLINK "http://finance.yahoo.com/q/bs?s=WMT+Balance+Sheet&annual" http://finance.yahoo.com/q/bs?s=WMT+Balance+Sheet&annual
Income Statement  HYPERLINK "http://finance.yahoo.com/q/is?s=WMT+Income+Statement&annual" http://finance.yahoo.com/q/is?s=WMT+Income+Statement&annual
Notes to the Financial Statement  HYPERLINK "/Archives/edgar/data/104169/000010416914000019/wmtform10-kx13114.htm" /Archives/edgar/data/104169/000010416914000019/wmtform10-kx13114.htm
Management Discussion and Analysis
 HYPERLINK "http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf" http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf

Wal-Mart is an international organization that specializes in the retail business. The organization opened its first store in 1962 and now has stores in 27 countries around the world. The store is available in countries such as Brazil, the United Kingdom, and The United Sates of America. It is notable that the organization helps people save their money by selling products at the cheapest prices. As evidence, 245 million consumers visit their stores every week (Wal-Mart, 2014). It is also crucial to highlight that Wal-Mart trades publicly in the New York Stock of Exchange under the ticker symbol WMT. Considering the rapid expansion of the organization under discussion, it is reasonable to examine the organization’s financial statements in order to identify its practices. Therefore, this paper discusses Wal-Mart’s financial statements by focusing on the notes to financial statements, the balance sheet, management analysis, and the income statement.
According to the Wal-Mart notes to financial statements (2014), the organization uses the American generally accepted accounting principles to keep their books. As evidence, their 10-K annual report reveals that their consolidated financial statements have been prepared in consistent with the American generally accepted accounting principles. Additionally, the same report reveals that Wal-Mart uses different methods of accounting to record their inventory. For instance, the organization uses the last in, first-out (LIFO) retail method of accounting for all American stores and the first-in first-out retail method of accounting for all international segments. Further, the organization uses the LIFO weighted-average cost for inventories from Sam’s Club segment. It is also notable that Wal-Mart made continuous profits for the years ending 31st January 2012, 2013 and 2014. The organization made not only continuous profits, but also recorded a steady increase in profits across the aforementioned years. This owes to the reality that the organization made gross profits of 118,225,000, 116,354,000, and 111.516,000 in 2014, 2013, 1nd 2012 respectively. It is crucial to highlight that Wal-Mart states receivables at their carrying values. They comprise of amounts due from banks, insurance companies, suppliers, real estate transactions, and consumer financing programs. Thus, the organization uses pledging to acquire loans from investors for their accounts receivables. It is also critical that the organization used the direct write-off method to allow for bade debt. This method complements the fact that Wal-Mart adheres to the American generally accepted accounting principles because the principles advocate the direct write-off method of tackling bad debt (Fridson and Alvarez, 2011).
Wal-Mart also issues different types of stocks to their investors. As evidence, their balance sheet indicates that the organization issued miscellaneous stock options warrants and common stocks. Moreover, the miscellaneous stock options warrants recorded a steady increase from 2012 to 2014 while the common stocks recorded a steady decline from 2012 to 2014. It follows that the organization pays lower dividends to its shareholders because common stocks pay lower dividends than preferred stocks (Fridson and Alvarez, 2011). Wal-Mart also recorded an increase in revenues from 2012 to 2014. This owes to the reality that the organization recorded revenues of 476,294,000, 468,251,000, and 446,509,000 in 2014, 2013, and 2012 respectively (Wal-Mart, 2014). This implies that the organization has been working to increase their sales over the three years. Apparently, the steady increase in revenue explains why the organization recorded a steady increase in gross profits across the years.
Another important subject for discussion is the amount of expenses spent by Wal-Mart over the last three years. This owes to the reality that the organization recorded a steady increase for expenses from 2012 to 2014. The steady increase is enhanced by the fact that the organization recorded expenses amounting to 118,...