Discuss methods used to account for assets, liabilities, and shareholder equity, and explain how the company’s inventory valuation method affects reported results.

Apr 24th, 2016
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Price: $25 USD

Question description

You will select a company from this list, and you will analyze the company’s financial performance, highlighting accounting principles and methods learned in this course. This project requires you to present, review, and analyze the organization’s published annual reports and related footnotes for the last 2 years. Specifically, your paper will cover the following:

  • Discuss methods used to account for assets, liabilities, and shareholder equity, and explain how the company’s inventory valuation method affects reported results.
  • Explain the company’s approach to internal controls, and assess its compliance with Sarbanes-Oxley.
  • Prepare and interpret the results of horizontal and vertical analyses of the financial statements.
  • Prepare and interpret the results of at least 5 ratios, 1 from each of the following categories:
    • Profit Ratios
    • Debt Ratios
    • Efficiency Ratios
    • Equity Ratios
    • Liquidity Ratios
  • Assess the company’s overall financial performance and the integrity of its internal controls.
  • Discuss how various stakeholders—internal and external—use information contained in the financial statements for decision making.

Include the last 2 years of published financial statements as Appendices to your report. Do not include the entire Annual Reports.

Present your findings as a Word document of 5–6 pages formatted in APA style.

Submitting your assignment in APA format means, at a minimum, you will need the following:

  • Title page: Remember the running head and title in all capital letters.
  • Body: The body of your paper begins on the page following the title page and it must be double-spaced between paragraphs. The typeface should be 12-pt. Times Roman or 12-pt. Courier in regular black type. Do not use color, bold type, or italics except as required for APA level headings and references. The deliverable length of the body of your paper for this assignment is 5–6 pages. In-text academic citations to support your decisions and analysis are required. A variety of academic sources is encouraged.
  • Reference page: References that align with your in-text academic sources are listed on the final page of your paper. The references must be in APA format using appropriate spacing, hang indention, italics, and upper- and lower-case usage as appropriate for the type of resource used. Remember, the reference page is not a bibliography, but it is a further listing of the abbreviated in-text citations used in the paper. Every referenced item must have a corresponding in-text citation.
  • Appendices: Include the last 2 years of the company’s published financial statements.

This assignment will be assessed using additional criteria provided here.

Reference

Fortune. (2014). Fortune 500 2014. Retrieved from http://fortune.com/fortune500/

Please submit your assignment.


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UCLA
PREMIUM TUTOR

Running head: WALMART FINANCIAL PERFORMANCE

Walmart Financial Performance
Name
Institution Affiliation

WALMART FINANCIAL PERFORMANCE

2

Overview
This paper focuses on Walmart Company and its financial performance. It highlights the
company’s accounting principles and methods learned in class. Today, the company is
considered to be the world’s largest company, and is quickly advancing to be a company in
which consumers are increasingly becoming fussier about what to eat. Besides, Doug McMillon,
new CEO of the company, has made the company break from a seemingly stagnant growth in
two years to a significant growth in its sales. The company’s financial performance is
outstanding as presented in this paper.
Methods used to account for Assets, Liabilities, and Shareholders
In Walmart, every business transaction has an effect on the financial position of the
company. This aspect is also true to all other business organization from large multinational
corporations to small businesses (AccountingCoach, LLC., 2016). Wal-Mart’s financial position
is measured using the following aspects:
i. Assets: These include what the company owns
ii. Liabilities: These include what the company owes to other companies and individuals
iii. Shareholder Equity: Shareholder/owner equity of Wal-Mart is depicted by the difference
between the company’s assets and it liabilities.
The above measures determine the actual financial position of the company. To determine
the financial position of Walmart, it is crucial to evaluate and explain its assets, liabilities, and
shareholder separately. A general analysis of the three measures would them bring out an overall
evaluation of the company’s financial grounds.

WALMART FINANCIAL PERFORMANCE

3

Assets refer to an economic resource owned by a company, whether tangible or
intangible, and it is used to generate value. It is specifically held by the company to create a
positive economic value. Assets in Walmart Company represent the value of the company’s
ownership, and they can be converted to cash. As such, the company’s assets are evaluated in
monetary value. The company’s assets consist of what is actually owned by its shareholders and
liabilities. In this case, the assets of Walmart are given as follows:
Assets = Liabilities + Shareholders’ Equity
Currently, the total assets of Walmart are valued at $199.58 billion according to
Wikinvest.com (2016). On the other hand, the company’s liabilities are currently valued at
$119.04 billion. Based on the above equation, it is possible to obtain the company’s shareholder
equity. As such, the shareholders’ equity is obtained as follows:
Assets

= Liabilities + Shareholders’ Equity

Shareholders’ Equity = Assets – Liabilities
= $199.58 billion - $119.04 billion
= $80.54 billion
From the above calculation, the current shareholder’s equity at Walmart Company is $80.54
billion. The implication from the above analysis is that over 59% of the company’s assets are
part of the company’s liabilities while only 40.4% of its assets are from the company’s
contribution from shareholders. In this case, the company has a higher liability than its equity.
According to Stock Analysis on Net (2016) the company has been experiencing fluctuating
values of shareholder equity and liabilities. As such, the value of its assets have been fluctuating

WALMART FINANCIAL PERFORMANCE

4

as well. Table 1 below shows the total liabilities, shareholder equity, and calculated assets from
2012 to 2016. Note that the company’s fiscal years ends on January 31.
Table 1: Walmart Assets, Liabilities, and Shareholder Equity from 2012 to 2016
Year

2012
($Millions)

2013
($Millions)

2014
($Millions)

2015
($Millions)

2016
($Millions)

Total Liabilities

117,241

120,848

121,921

117,769

115,970

Total
Shareholder
Equity

75,761

81,738

81,339

85,937

...

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