Annual Report

Yuanyuan Xu

Introduction

• Chief executive officer: Chief executive officer • Location of home office: 702 SW 8th St,

Bentonville, AR 72716 • Ending date of latest fiscal year: 1/31/2012 • Principal products or services: Supplying

thousands of products to a consuming market, Wal-Mart Stores Inc. has focused on providing lower cost items at advertised bottom-end prices.

• Main geographic area of activity: the United States

Audit Report

• Wal-Mart Stores Inc.’s independent auditors: Ernst and Young LLP

• Audit say that financial statements of Wal-Mart Stores Inc. present fairly and are conformity with accounting principles.

Stock Market Information

• Most recent price of the company’s stock: $74.84 • Twelve month trading range of Walmart’s

stock:$65.99 to $79.86 • Dividend per share: $1.88/share • Date of the above information: June 2, 2013 9:28

p.m • I think it is wise to buy walmart stock as an

investment because it has strong financial position and the share price has rising tendency over the year.

Income Statement

Income statement

• The format of the income statement is most like a multistep format.

• The gross profit is steadily increasing from 2011 to 2013. Most revenue of this company comes from operation.

Balance sheet

Statement of Balance sheet

• According to Walmart Balance sheet of 2012 and 2011, the company’s total assets, total liabilities and shareholder’s equity increases.

• Total assets and total liabilities all increases from 2011 to 2012, which indicates that the company is growing.

Statement of Cash Flows

Statement of Cash Flows

• cash flows from operations are more than net income for the past two years.

• Wal-Mart Stores Inc. is growing through operating activities.

• Wal-Mart Stores Inc’s primary source of financing is net change in short-term borrowings.

• Cash increased or decreased over the past two years.

Accounting Policies

• Walmart recognizes sales revenue net of sales taxes and estimated sales returns at the time it sells merchandise to the customer.

• The topics of the notes to the financial statements:

• 1.Summary of Significant Accounting Policies • 2. Notes about depreciating assets • 3.Notes about valuing inventory • 4.Notes to Contingencies

Financial Analysis Liquidity Ratios

(USD $ in millions) 2011 2012

Working capital (7,325) (11,878)

Current ratio

0.88 0.83

Receivable turnover

74.76 68.87

Average days’ sales uncollected

323/365=0.88 115/365=0.32

Inventory turnover

10.90 10.64

Average days’ inventory on hand

40,714/365=111.5 43,803/365=120.0

Operating cycle

38 40

Wal-Mart Stores Inc.'s receivables turnover, inventory turnover deteriorated and its ability to pay back its short-term liabilities with its current asset was reduced from 2011 to 2012 .

Financial Analysis Profitability Ratios

(USD $ in millions) 2011 2012

Profit margin

100 × 15,699 ÷ 418,952 = 3.75%

100 × 16,999 ÷ 466,114 = 3.65%

Asset turnover

443,854÷ 193,406 = 2.29 466,114 ÷ 203,105 = 2.29

Return on assets

100 × 15,699÷ 193,406 = 8.37%

100 × 16,999 ÷ 203,105 = 8.37%

Return on equity

100 × 15,699 ÷ 71,315 = 22.01%

100 × 16,999 ÷ 76,343 = 22.27%

Wal-Mart Stores Inc.'s asset turnover and return on assets keep stable from 2011 to 2012. As an retail company, Wal-Mart Stroes Inc. has pretty low profit margin which indicates that its low-cost stretagy.

Financial Analysis Market Strength

Ratios

(USD $ in millions) 2011 2012

Price/earnings per share

61.09/4.61=13.25 74.77/5.16=14.48

Dividend yield

1.46/61.01=0.024 1.59/69.95=0.023

Wal-Mart Stores Inc. grow from 2011 to 2012 and Its material benefits to stockholders had been flat for those years. The P/E ratio of Walmart increased from 2011 to 2012, which indicates that its earnings were substantially increasing those years to keep the high stock price.

Financial Analysis Solvency

Ratio

(USD $ in millions) 2011 2012

Debt to equity

0.75 0.71

Financing gap

365/(443,854 ÷ 36,608) -38=-7.9

365/(466,114 ÷ 38,080)-40=-10.2

Wal-Mart Stores Inc.'s financing gap keeps negative from 2011 to 2012, which means it has adequate Fund. It indicates that Wal-Mart Inc. has enough cash to purchase capital expenditures without borrowing. Wal-Mart Stores Inc. also maintained low debt-to-equity ratio, which refers that conservative financing. From that perspective, Wal-Mart Stores Inc. had sustained and steady earnings those years.

Industry Situation & Company Plans

• Running retail business, Wal-Mart Stores Inc. can attract customers to gain stable earnings by keeping low-cost principle. Wal-Mart Stores Inc. will keep enlarging the size of its market by establishing more stores to cover more areas.

• Wal-Mart Stores Inc. will continues its global expansion activities by growing our retail square feet and expanding our e-commerce capabilities. It means that Wal-Mart Stores Inc. will increase its investment in technology and global e-commerce initiatives to develop a global technology platform. Continuing complete its online system and globule technology, Wal-Mart Stores Inc. can strengthens its competitiveness.

• “Next Generation Walmart & the Future of Shopping” brickmeetsclick.com. Bishopsgate, LLC. May 14, 2013 <http://www.brickmeetsclick.com/next-generation-walmart---the-future-of-shopping>

• “Walmart 2013 Annual Report” <http://az204679.vo.msecnd.net/media/documents/2013-annual-report_130108806067963477.pdf>

Executive Summary

• As one of the world’s largest retailer obtaining a permanent place in the retail market is the goal of Wal-Mart Inc. Wal-Mart Stores Inc. has it’s reputation for providing customer best services with its lowest prices for a long time.

• By combining experience and technology, Wal-Mart Stores Inc. will be able to create a high satisfaction level to globe customers. For the next few years, Wal-Mart Stores Inc. tend to put its focus on expanding overseas market and cutting its cost by technological innovation.

• Planning to invest more capital into the development of its new technology, Wal-Mart Stores Inc. will increase its profits from its gaining of greater share in overseas retail business.

• Overview, Wal-Mart Stores Inc. sent a signal of bright earnings outlook to the shareholders through their future plans.