V.

Wal-Mart (Assigned case: 3-6 hours)

This case is due on the first day of class and should be uploaded to the drop-box on CCLE. The questions pertain to Wal-Marts (NYSE: WMT) 2013 annual report, which we have attached in the file WMT 2013 Annual Report.pdf. 1) Show that Stockholders Equity equals Assets net of Liabilities for the year ending January 31, 2013. Assets Liabilities = Equity

2) Assuming that the name Wal-Mart is valuable, explain why it is not shown as an asset on the companys balance sheet.

3) Determine the total (current and non-current) amount of Debt and Obligations Under Capital Leases as of January 31, 2013. (NOTE: Short-term borrowings are a form of debt.)

4) Determine the total contributed capital from Wal-Mart shareholders (i.e. ignore noncontrolling interests) as of January 31, 2013.

5) Show that the balance of Common Stock on the companys balance sheet corresponds to the par value per share (10 cents) times the number of shares issued and outstanding as of January 31, 2013. Note that there is a rounding difference between the figure you compute and the dollar amount reported on WMTs balance sheet.

Par value per share

Shares outstanding

= =

Common stock

6) Calculate the gross margin for the fiscal year ending January 31, 2013 (Net Sales less Cost of Sales) in percentage-of-sales terms. (NOTE: Do not include Membership and other income.1)

While there are no black-and-white rules about whether to include this sort of line item, a gross margin measure typically uses the primary sales total and cost of sales typically only pertains only to the product sales included in the Net sales line. This is indeed the case as indicated by the financial statement note describing WMTs cost of sales.

7) Estimate the interest rates on the companys Debt and Capital Leases from information on the 2013 income statement and the 2013 and 2012 balance sheets.

8) Indicate whether sufficient cash is provided by the companys operating activities for the fiscal year ending January 31, 2013 to cover cash used for investment.

9) Indicate whether the auditors opinion is qualified or unqualified (p. 57).

10) From managements discussion and analysis (MD&A), identify which segment, Walmart U.S., Sams Club, or Walmart International, had the highest net sales growth during fiscal 2013 (p. 19)

11) Also from MD&A, determine the new quarterly dividend per share to be paid in fiscal 2014 (p. 26).

12) From the notes to the financial statements, identify when Wal-Marts income statement shows revenue from merchandise sales and when it shows revenue from gift cards (referred to as shopping cards in the note) (Revenue Recognition note, p. 38). a. Merchandise sales:

b. Gift cards:

13) Also from the notes, determine cash membership fees received in fiscal 2013 from Sams Club memberships (p. 38).