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Wal-Mart Stores, Inc. Case Study

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Wal-Mart Stores, Inc.

Accounting

Courtney Gee

2/24/2017


Table of Contents

Executive Summary…………………………………………………………………….…2

Company Background…………………………………………………………………….3

Auditor and Committees……………………………………………………………….…4

Balance Sheet………………………………………………………………………………5

Income statement analysis……………………………………………………………..….5

Comparative analysis………………………………………………………………………6

Property, Plant, & Equipment…………………………………………………………….6

Inventory……………………………………………………………………………...........7

Investments in other entities………………………………………………………………7

Intangible Assets……………………………………………………………………………7

Statements of Stockholder’s Equity……………………………………………………….7

Statements of Cash Flows………………………………………………………………….8

Investment Analysis………………………………………………………………………..8

Refrences……………………………………………………………………………………9

Executive Summary

        Walmart Stores Incorporated, also known as the world’s largest retailer, was founded in Arkansas by Sam Walton. The company has always strived to provide great value and great customer service. The founder’s strategy, the lowest prices anywhere, anytime, still remains a main focus of the company.

Company Background

        Sam Walton opened Walton’s 5& 10 in Bentonville, Arkansas in 1950. The store had tremendous success and lead Walton to open the very first Walmart twelve years later in Rogers, Arkansas. By 1970, Walmart became a publicly traded company with the first stock being sold at $16.50 per share. In just two years, the company was listed on the New York Stock Exchange with fifty-on stores. In the eighties, the company created Sam’s Club, the warehouse retail chain, and Walmart Supercenter, a store combining a full supermarket and general merchandise. The next decade consisted of Walmart dipping into international markets. The company expanded into Mexico, Canada, China, and the United Kingdom throughout the nineties. The international expansion continued to grow in the next decade to India and South Africa. In 2000, walmart.com was created and opened up a whole new market. Customers could shop in-store or online. This created the platform for the site to service launch in 2007. This service allowed customers to purchase products online and get free shipping to their local stores. Therefore, all the customer had to do was pick up their purchase in store.

In 2005, hurricane Katrina was a major disaster in the United States. However, Walmart undertook a major role in disaster relief to help with Hurricane Katrina. The company contributed $18 million dollars along with over 2000 truckloads of supplies to victims. This contribution sparked Walmart to make a commitment to environmental sustainability. According to the company’s website, they created goals to create zero waste, use only renewable energy, and sell products that sustain people and the environment. Then, five years later, Walmart begin a project to donate five billion dollars to help end hunger in the United States. Once again, this donation encouraged Walmart to initiate a global commitment to sustainable agriculture. The next service initiative the company took on was in 2013 when they announced they would hire any honorably discharged veteran within their first year off of active duty.

Auditor and Committees

According to the 2013, 2014, and 2015 annual reports Wal-Mart has filed Ernst & Young LLP has been the company’s independent auditor. Ernst & Young reported all three years as unqualified with no discrepancies found. Wal-Mart has seven sub committees, with three to five members each, within the company. The first committee is the audit committee and it consists of four members with one being the chairperson. The company’s website states that the audit committee is directly responsible for retention, termination, compensation and terms of engagement, evaluation, and oversight of the work of the Outside Auditor. (Walmart Website) The next committee is the compensation and management development committee. This committee must meet at least five times a year. Their main responsibility is to evaluate the compensation of the company’s directors, executive officers, and associates. Identifying people qualified to serve as board members and implementing good corporate governance makes up the duties of the nominating and governance committee. The next committee is the executive committee. This team is responsible for amending bylaws and implement policy decisions of the board. The fifth subgroup is the global compensation group. Their job duties include amending, approving, selecting eligible associates, and awarding associates for the compensation plans. The last two committees have the largest amount of members at five members a piece. The sixth subcommittee is strategic planning and finance. The team job duties includes evaluating the company’s capital structure, advising the Board on financial matters, analyzing and recommending financial goals, reviewing the company’s performance on capital investment projects, and reviewing the dividend policy. The final subgroup is the technology and eCommerce committee. This team provides guidance on the company’s information technology and eCommerce strategies and monitors the industry trends.          

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