American Corporation Analysis: Wal-Mart
Tiffany Tyler, Samantha Moore, Salvador Lua, Edward Martinez
American Corporation Analysis
The main reason behind financial analysis is to give a better perspective about the financial structure and profitability position of the corporation. Certain corporations such as Wal-Mart Incorporates benefit considerably from a financial analysis because it assists in determining the durability in handling sales, assets, and debts. A gentleman by the name of Sam Walton in Rogers, Arkansas; by 1967 there were 24 stores established that had a $12.7 million sales revenue. In 1970, the corporation became a publicly traded company with stocks at $16.50 per share. Ten years later Sam Walton reached $1 billion in sales annually, beating out other major competitors. In 1990, Wal-Mart was the number one retailer nationally, and continued its success by going international. Today, Wal-Mart has over 2.2 million associates in North America and internationally, and serves over 200 million customers weekly at more than 11,000 stores.
After our team completed the horizontal analysis of Wal-Mart’s consolidated balance sheets for the years of 2014 and 2015, there were a few elements that stood out with significant variances. For example, Wal-Mart’s cash and equivalents increased by 3.1% while total assets increased by 22%. Prepaid expenses saw a significant decrease of 24.3% in 2015, which could indicate better-cost control and current asset utilization. The red flag item on the balance sheet is short-term borrowing, which saw an increase of $292 in 2015; this could indicate a significant short-term financing of operating expenses. Accrued income taxes in 2015 also increased by 641% that raises the questions in regards to income tax declaration practices by the corporation.
The consolidated statement of income horizontal analysis also showed several items with significant...