Finance Principles

In: Business and Management

Submitted By nicolefredd
Words 276
Pages 2
Wal-Mart financial statements shows great financial health, they have improved from 2011 and are continuing to grow. Wal-Mart annual report for 2012 financial statements shows that their current assets are much higher than their current liabilities. Wal-Mart has gained $12,624 in assets and only $3,697 in liabilities which shows excellent working capital. Analyzing Wal-Mart financial statements, the cash flow is affected when assets were a direct cost inflow or outflow during the operating cycle. For example Wal-Mart has property under capital lease that is most likely paid monthly but the accumulated amortization will be looked at as accounting numbers with no real impact on cash flow. The accounts that truly provide changes in cash flows on Wal-Mart financial statement would be accounts payable, short term borrowings, and obligations under capital lease due within one year and current liabilities of discontinued operations. The accounts that are reported solely for account purpose include, accrued liabilities, accrued income taxes, long term debt and deferred income taxes and many more. Accumulated other comprehensive income is like accumulated depreciation. It's an accounting convention so there is no cash exchanged. Transactions that could lead to AOCI can go into the cash flow statement, such as the purchase of marketable securities. Those items can eventually be sold and then go to the cash flow statement. Unearned compensation on restricted stock represents the cost yet to be preformed and is reported on Wal-Mart’s balance sheet under stockholders equity as a loss for 2012. Wal-Mart annual report was very easy to understand and provided the details on following the principles and standards under…...

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