Financial Accounting Project: Wal-Mart Stores, Inc.
Wal-Mart Stores, Inc. is a multinational corporation that operates in retail industry. Wal-Mart runs a chain of stores of various sizes and formats in USA and 27 countries worldwide. The company was founded in 1962 when Sam Walton opened a discount store in Rogers, Arkansas, which was branded as Wal-Mart Discount City. Within five years company grew up to 24 stores and $12.6 million in sales and has gone public in 1970. During 1970s company has demonstrated intensive growth and reached a milestone of $1 billion sales in 1980. The next decade was characterized by the rapid implementation of technical innovations such as electronic check-registers. In 1990s Walmart began its international expansion and in 2002 has been ranked #1 in the Fortune 500 America’s largest companies. In 2009 annual sales of Wal-Mart Inc. has exceeded $400 billion for the first time. Currently with more than 10,000 stores and over 2 million employees Wal-Mart is ranked as the world’s largest retail company and number one private employer. The company’s headquarters is located in Bentonville, Arkansas and the largest stake (48%) is held by Walton family making Walmart one of the most successful family-owned corporations.
Wal-Mart Inc. structure includes three large divisions: Walmart U.S., Sam’s Club and Walmart International. Walmart U.S operates a chain of retail stores in all 50 states and Puerto-Rico. The variety of store types includes Walmart Discount stores which mainly sell merchandise and grocery; Walmart Supercenters which are usually larger and additionally offer a full range of food products; Walmart Markets which offer grocery and pharmaceutical products. Sam’s Club division operates in USA and internationally and runs a chain of wholesale stores which sell grocery and merchandise. This division is aimed to serve small business and requires all its customers to buy a membership. Finally, Walmart International runs more than 5,000 stores in 27 countries with largest branches in Mexico, Canada, UK, Brazil and China. Walmart uses more than 60 local store brands along with its own in the international market.
According to the annual report for the financial year ended 31 January 2012, total current assets of Wal-Mart Inc. were $54,975 million; total long term assets were $138,432 million. The main contributors to the current assets account were inventories (more than $40 billion), cash ($6.5 billion) and accounts receivable ($5.9 billion). The largest account in long term assets section was equipment ($109 billion in net value corrected for accumulated depreciation) with $20.6 billion goodwill account being the second in the section. In comparison with 2011 financial year the growth in current assets and long term assets was 5.7% and 7.5% respectively which implies that company’s is accumulating more assets.
Company’s current liabilities in 2012 totaled $62,300 million (6.35% growth) with largest contribution from accounts payable ($38 billion), accrued liabilities ($18 billion) and short-term borrowings ($4 billion). By the end of the same period long-term liabilities added up to $55,345 (8.6% growth) with largest share attributed to the long-term debt ($44 billion).
Working capital of …