Wal-MartCarlos Lamar

002

Annual Report Project Directions:

•DURING THE CLASS THAT COVERS CHAPTER 15, GET PROFESSOR APPROVAL FOR THE COMPANY YOU WANT TO ANALYZE.

• PREPARE A POWERPOINT PRESENTATION: Modify and enhance this powerpoint template—replace any italicized words in this template with your own. Add images, tables, backgrounds, etc. !!! THIS TEMPLATE IS BASED ON THE ANNUAL REPORT PROJECT  PARTS A-E (OPTION C-exclude cash flow adequacy, pages 56-58) IN  TEXT. 

•SAVE YOUR PROJECT AS A WEB PAGE--NAME YOUR FILE YOUR THREE INITIALS AND YOUR COMPANY NAME.

•BE SURE YOUR WEBPAGE INCLUDES A LINK TO  THE CORPORATIONS' F/S!

•SEND YOUR WEB-READY PRESENTATION AS AN E-MAIL ATTACHMENT TO susan.crosson@sfcc.edu BY THE DUE DATE LISTED IN COURSE CALENDAR. ALL SUBMISSIONS WILL BE POSTED ON OUR COURSE WEBSITE.

• THE ANNUAL REPORT PROJECT IS WORTH 18 POINTS. 

Executive Summary

After completing your analysis, write an executive summary of your conclusions here….

Based on the last two years, it seems that Wal-Mart will continue to prosper and grow. With the support of the supplier and the purchase made by the

consumers Wal-Mart profit should continue to flourish. Wal-Mart will also continue to progress if liabilities and the cost of operation do not exceed the

net income.

Walmart.com

Part A. Introduction

• Name of chief executive officerEduardo Castro-Wright

• Location of home office702 SW 8th street Bentonville, Arkansas 72716

• Ending date of latest fiscal yearJanuary 31, 2005

• Description of the principal products or services that the company providesWal-Mart provides general merchandise, such as cloths, toys, and house hold appliances, and also a full line super market, all at discounted prices.

• Main geographic area of activity Wal-Mart activity area mainly consist of well populated cities.

Part A. Audit Report

• Name of the company’s independent auditors. Ernst and Young LLP are Wal-Mart’s

independent auditors.

• In your own words, what did the auditors say about the company?

Auditors stated that Wal-mart had a “solid performance”. They believe Wal-mart will be profitable for years to come.

Part A. Stock Market Information

• Most recent price of the company’s stock$45.37

• Twelve month trading range of the company’s stock$42.31-$53.36

• Dividend per share$.63

• Date of the above informationmarch 2

• Your opinion about the company stock as an investment? HOLD

Part B. Industry Situation and Company Plans

In your own words, describe the industry and its outlook; then summarize the company’s future plans based on your research (cite at

least two sources) and on reading the annual report (be sure to read the letter to the

stockholders). Include links to any relevant information.

Part C. Income Statement

Multistep

•Insert a table showing the company’s gross profit, income from operations, and net income for the last two years.

•Is the format most like a single-step or multistep format?

gross profit $77,335

income from operations $16,105

net income 2004 $9,054

2005 $16,267

Based on the significant difference in net income from 2004 to 2005 Wal-Mart must may have changed its way of advertising or decreased it liabilities causes an increase in its net income.

Part C. Balance Sheet

•Insert a table showing that Assets=Liabilities + Stockholders’ Equity for the past two years.(in millions)05Asset: Current asset $38,491 = Liabilities: + SHE:

PPE $84,045 Current liabilities $42,888 SHE $49,396

Capital $3,159

ect.

Total asset $120,223

(in millions)04Asset: Current asset $34,421 = Liabilities: + SHE:

PPE $72,094 Current liabilities $37,840 SHE $43,623

Capital $2,613

ect.

Total asset $105,405

•In your own words, comment in general on the increases or decreases in the balance sheet accounts.

•Which accounts changed the most?

stockholders equity

Part C. Statement of Cash Flows•Are cash flows from operations more or less than net income for the past two years?

Cash flows from operation is more than net income for the past two years.

•Is the company growing through investing activities, i.e., buying property, plant and equipment and other long lived assets?

Yes the company is growing trough investing. Base on the last two years the spent more in investing and they earn more money

•What is the company’s primary source of financing, i.e., long-term loans, stock sales?

Stock sale

•Overall, has cash increased or decreased over the past two years?

The cash has increased over the past two years.

Part D. Accounting Policies•What are the significant accounting policies, if any, relating to revenue recognition, cash, short-term investments, inventories, and property and equipment?•List the topics of the notes to the financial statements.

–Working capital–Liquidity and capital resources–Common stock and dividends

Part E. Financial AnalysisLiquidity Ratios

For the past two years, calculate and comment on:• Working Capital

2005 20044.4 million 3.4 million

• Current Ratio.9 .9

• Receivable turnover12.02 9.63

• Average days’ sales uncollected30.34 37.89

• Inventory turnover3.92 7.46

• Average days’ inventory on hand93.11 48.92

Progress since the previous year.

Part E. Financial AnalysisProfitability Ratios

For the past two years, calculate and comment on:• Profit margin

2005 2004.03 .03

• Asset turnover1.26 2.43

• Return on assets.04 .08

• Return on equity.11 .08

Could have done much better.

Part E. Financial AnalysisSolvency Ratio

For the past two years, calculate and comment on:

• Debt to equity

2005 2004

.08 .20Progress since the previous year.

Part E. Financial AnalysisMarket Strength Ratios

For the past two years, calculate and comment on:

• Price/earnings per share

2005 2004

33.87

• Dividend yield

1.1 1