ACCT 110 Lecture Notes - Lecture 23: Cash Flow, Weighted Arithmetic Mean, Financial Statement
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1.Balance sheet
â | Prepare a classified balance sheet in proper form. The termâproper formâ implies the inclusion of 4 columns for classificationof account titles and dollar amounts, the listing of account titlesunder the correct headings and in proper order. For example,current assets are listed in order of liquidity. The appropriateuse of dollar signs and rulings (underscores). Strive forprofessionalism. INCOME STATEMENT
Cash-7882000 Accounts Receivable-1400000 Inventory-2798000 Allowance for doubtful accounts-40000 Prepaid Supplies- 93000 Assets held for sale- 0 Land-17500000 Buildings-7975000 Equipment-9800000 Accumulated depreciation- equipment- 5130000 accumulated depreciation- buildings- 1395000 accounts payable- 1500000 interest payable- 101250 bonds payable- 5000000 Common stock ($10 par)- 12500000 Retained earnings-13837500 unearned design revenue- 4650000 sales commissions- 2000000 Cost of goods sold- 4962500 advertising expense- 750000 rent expense- 1150000 wages expense- 4000000 supplies expense- 700750 interest expense- 201250 loss on income from discontinued operations- 300000 prepaid rent- 300000 paid in capital in excess of par- 5000000 long term notes payable- 500000 investment in ABC bonds- 2000000 investments in XYZ bonds- 300000 |
Information:
WAL MART STORESINC | ||||
10-K | ||||
Income Statement | ||||
(Amounts in millions except per sharedata) | ||||
Fiscal Year Ended January 31, | 2015 | 2014 | 2013 | 2012 |
Revenues: | ||||
Net sales | $482,229 | $473,076 | ####### | $443,416 |
Membership and other income | 3,422 | 3,218 | 3,047 | 3,093 |
485,651 | 476,294 | 468,651 | 446,509 | |
Costs and expenses: | ||||
Cost of sales | 365,086 | 358,069 | 352,297 | 334,993 |
Operating, selling, general andadministrative expenses | 93,418 | 91,353 | 88,629 | 85,025 |
Operating income | 27,147 | 26,872 | 27,725 | 26,491 |
Interest: | ||||
Debt | 2,161 | 2,072 | 1,977 | 2,034 |
Capital leases | 300 | 263 | 272 | 286 |
Interest expense | 2,461 | 2,335 | 2,249 | 2,320 |
Interest income | (113) | (119) | (186) | (161) |
Interest, net | 2,348 | 2,216 | 2,063 | 2,159 |
Income from continuing operations beforeincome taxes | 24,799 | 24,656 | 25,662 | 24,332 |
Provision for income taxes: | ||||
Current | 8,504 | 8,619 | 7,976 | 6,722 |
Deferred | (519) | (514) | (18) | 1,202 |
Total provision for income taxes | 7,985 | 8,105 | 7,958 | 7,924 |
Income from continuing operations | 16,814 | 16,551 | 17,704 | 16,408 |
Income (Loss) from discontinuedoperations, net of tax | 285 | 144 | 52 | (21) |
Consolidated net income | 17,099 | 16,695 | 17,756 | 16,387 |
Consolidated net income attributable tononcontrolling interest | (736) | (673) | (757) | (688) |
Consolidated net incomeattributable to Walmart | $16,363 | $16,022 | $16,999 | $15,699 |
Net income per common share: | ||||
Basic income per common share fromcontinuing operations to Walmart | $5.01 | $4.87 | $5.03 | $4.55 |
Basic income (loss) per common share fromdiscontinued operations | $0.06 | $0.03 | $0.01 | ($0.01) |
Basic net income per common shareattributable to Walmart | $5.07 | $4.90 | $5.04 | $4.54 |
Diluted income per common share fromcontinuing operations to Walmart | $4.99 | $4.85 | $5.01 | $4.53 |
Diluted income (loss) per common sharefrom discontinued operations | $0.06 | $0.03 | $0.01 | ($0.01) |
Diluted net income per common share | $5.05 | $4.88 | $5.02 | $4.52 |
Weighted-average number of commonshares: | ||||
Basic | 3,230 | 3,269 | 3,374 | 3,460 |
Diluted | 3,243 | 3,283 | 3,389 | 3,474 |
Dividends declared per common share | $1.92 | $1.88 | $1.59 | $1.46 |
WAL MART STORESINC | ||||
10-K | ||||
Balance Sheet | ||||
(Amounts in millions except per sharedata) | ||||
January 31, | 2015 | 2014 | 2013 | 2012 |
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $9,135 | $7,281 | $7,781 | $6,550 |
Receivables | 6,778 | 6,677 | 6,768 | 5,937 |
Inventories | 45,141 | 44,858 | 43,803 | 40,714 |
Prepaid expenses and other | 2,224 | 1,909 | 1,551 | 1,685 |
Current assets of discontinuedoperations | 0 | 460 | 37 | 89 |
Total current assets | $63,278 | $61,185 | $59,940 | $54,975 |
Property and equipment, at cost | 177,395 | 173,089 | 165,825 | 155,002 |
Less accumulated depreciation | (63,115) | (57,725) | (51,896) | (45,399) |
Property and equipment, net | 114,280 | 115,364 | 113,929 | 109,603 |
Property under capital lease | 5,239 | 5,589 | 5,899 | 5,936 |
Less accumulated amortization | (2,864) | (3,046) | (3,147) | (3,215) |
Property under capital lease, net | 2,375 | 2,543 | 2,752 | 2,721 |
Goodwill | 18,102 | 19,510 | 20,497 | 20,651 |
Other assets and deferred charges | 5,671 | 6,149 | 5,987 | 5,456 |
Total assets | $203,706 | $204,751 | $203,105 | $193,406 |
LIABILITIES ANDSHAREHOLDERS EQUITY | ||||
Current liabilities: | ||||
Short-term borrowings | $1,592 | $7,670 | $6,805 | $4,047 |
Accounts payable | 38,410 | 37,415 | 38,080 | 36,608 |
Accrued liabilities | 19,152 | 18,793 | 18,808 | 18,154 |
Accrued income taxes | 1,021 | 966 | 2,211 | 1,164 |
Long-term debt due within one year | 4,810 | 4,103 | 5,587 | 1,975 |
Obligations under capital leases duewithin one year | 287 | 309 | 327 | 326 |
Current liabilities of discontinuedoperations | 0 | 89 | 0 | 26 |
Total currentliabilities | 65,272 | 69,345 | 71,818 | 62,300 |
Long-term debt | 41,086 | 41,771 | 38,394 | 44,070 |
Long-term obligations under capitalleases | 2,606 | 2,788 | 3,023 | 3,009 |
Deferred income taxes and other | 8,805 | 8,017 | 7,613 | 7,862 |
Redeemable non-controlling interest | 0 | 1,491 | 519 | 404 |
Commitments and contingencies | 0 | 0 | 0 | 0 |
Shareholders equity: | ||||
Common stock | 323 | 323 | 332 | 342 |
Capital in excess of par value | 2,462 | 2,362 | 3,620 | 3,692 |
Retained earnings | 85,777 | 76,566 | 72,978 | 68,691 |
Accumulated other comprehensive income(loss) | (7,168) | (2,996) | (587) | (1,410) |
Total Walmart shareholders' equity | 81,394 | 76,255 | 76,343 | 71,315 |
Noncontrolling interest | 4,543 | 5,084 | 5,395 | 4,446 |
Total equity | 85,937 | 81,339 | 81,738 | 75,761 |
Total liabilities and shareholdersequity | $203,706 | $204,751 | $203,105 | $193,406 |
WAL MART STORESINC | ||||
10-K | ||||
Statement of CashFlows | ||||
(Amounts in millions) | ||||
Fiscal Year Ended January 31, | 2015 | 2014 | 2013 | 2012 |
Cash flows from operating activities: | ||||
Consolidated net income | $17,099 | $16,695 | $17,756 | $16,387 |
(Income) Loss from discontinuedoperations, net of tax | (285) | (144) | (52) | 21 |
Income from continuing operations | 16,814 | 16,551 | 17,704 | 16,408 |
Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities | ||||
Depreciation and amortization | 9,173 | 8,870 | 8,478 | 8,106 |
Deferred income taxes | (503) | (279) | (133) | 1,050 |
Other operating activities | 785 | 938 | 602 | 468 |
Changes in certain assets and liabilities,net of effects of acquisitions: | ||||
Increase in accounts receivable | (569) | (566) | (614) | (796) |
Increase in inventories | (1,229) | (1,667) | (2,759) | (3,727) |
Increase in accounts payable | 2,678 | 531 | 1,061 | 2,687 |
Increase in accrued liabilities | 1,249 | 103 | 271 | 30 |
(Decrease) Increase in accrued incometaxes | 166 | (1,224) | 981 | 29 |
Net cash provided by operatingactivities | 28,564 | 23,257 | 25,591 | 24,255 |
Cash flows from investing activities: | ||||
Payments for property and equipment | (12,174) | (13,115) | (12,898) | (13,510) |
Proceeds from disposal of property andequipment | 570 | 727 | 532 | 580 |
Proceeds from disposal of certainoperations | 671 | 0 | 0 | 0 |
Other investing activities | (192) | (138) | (271) | (3,679) |
Net cash used in investingactivities | (11,125) | (12,526) | (12,637) | (16,609) |
Cash flows from financing activities: | ||||
Net change in short-term borrowings | (6,288) | 911 | 2,754 | 3,019 |
Proceeds from issuance of long-termdebt | 5,174 | 7,072 | 211 | 5,050 |
Payment of long-term debt | (3,904) | (4,968) | (1,478) | (4,584) |
Dividends paid | (6,185) | (6,139) | (5,361) | (5,048) |
Purchase of Company stock | (1,015) | (6,683) | (7,600) | (6,298) |
Dividends paid to noncontrollinginterest | (600) | (426) | (282) | (526) |
Purchase of noncontrolling interest | (1,844) | (296) | (132) | 0 |
Other financing activities | (409) | (260) | (58) | (71) |
Net cash used in financingactivities | (15,071) | (10,789) | (11,946) | (8,458) |
Effect of exchange rates on cash | (514) | (442) | 223 | (33) |
Net (decrease) increase in cash and cashequivalents | 1,854 | (500) | 1,231 | (845) |
Cash and cash equivalents at beginning ofyear | 7,281 | 7,781 | 6,550 | 7,395 |
Cash and cash equivalents at endof year | $9,135 | $7,281 | $7,781 | $6,550 |
Supplemental disclosure of cash flowinformation | ||||
Income tax paid | 8,169 | 8,641 | 7,304 | 5,889 |
Interest paid | 2,433 | 2,362 | 2,262 | 2,346 |
Questions:
DuPont Model â Analysis of ROA
Calculations:
< >: Return on sales x asset turnover
Fiscal Year Ended | 2/1/2015 | 2/2/2014 | 2/3/2013 | 1/29/2012 |
Return on assets (calculated) | 8.39% | 8.15% | 8.74% | 8.47% |
Return on sales | 5.63% | ? | ? | ? |
Asset turnover | 2.38% | 2.33% | 2.31 | 2.31 |
Product | 13.40% | ? | ? | ? |
Profitability Performance
Calculations:
Asset turnover: total net revenues / averagetotal assets = 485,661 / 203,706 = 2.38
Return on sales: adjusted net income / totalnet revenues = Step by step for 2015 =
Gross margin %: (total revenue â cost of sales)/ total revenue = (485,651 â 365,086) / 485,651 = 0.2483 =24.83%
Return on assets: adjusted net income / averagetotal assets = 17,099 / 203,706 = 8.39%
Return on equity: net earnings / averageequity = Step by step for 2015 ?
Average interest rate: interest expense /average total liabilities = 2,461 / 65,272 = 0.0377 =3.77%
Average total assets: (total assets 2015 +total assets 2014)/2 = (203,706 + 204,751) / 2 =204,228.50
Income tax rate: Provision for income taxes /earnings before income taxes = Step by step for 2015?
Net of tax interest expense: income tax rate xinterest expense = Step by step for 2015 ?
Adjusted net income: net earning + net of taxinterest expense = Step by step for 2015?
Average equity: (total shareholdersâ equity2015 + total shareholdersâ equity 2014)/2 = Step by stepfor 201
Average total liabilities: (total liabilities2015 + total liabilities 2014)/2 = Step by step for 2015?
Profitability Ratios
|
Stock Performance
Calculations:
Book value per common share: book value ofequity / common shares outstanding = Step by st for2015 =
Earnings per share (Basic) according to Income Statementis $5.07
Earnings per share (Diluted) according to IncomeStatement is $5.05
P/E Ratio: adjusted closing price / earningsper share (diluted) = Step by step for 2015=
Dividend yield: dividend per share / adjustedclosing price = Step by step for 2015=
Dividend payout: dividend per share / earningsper share (diluted) = Step by step for 2015=
Adjusted basic EPS: adjusted net income /Weighted average shares outstanding: basic
Adjusted diluted EPS: adjusted net income /Weighted average shares outstanding: diluted
Adjusted P/E ratio: adjusted closing price /adjusted diluted EPS
Adjusted dividend payout: Dividends per share /adjusted diluted EPS
Fiscal Year Ended | 2/1/2015 | 2/2/2014 | 2/3/2013 | 1/29/2012 |
Book value per common share | ? | ? | ? | ? |
Earnings per share (basic) | ? | ? | ? | ? |
Earnings per share (diluted) | ? | ? | ? | ? |
P/E Ratio | ? | ? | ? | ? |
Dividend yield | ? | ? | ? | ? |
Dividend payout | ? | ? | ? | ? |
Adjusted Basic EPS | ? | ? | ? | ? |
Adjusted Diluted EPS | ? | ? | ? | ? |
Adjusted P/E Ratio | ? | ? | ? | ? |
Adjusted dividend payout | ? | ? | ? | ? |
Book value of equity | ? | ? | ? | ? |
Common shares outstanding | ? | ? | ? | ? |
Adjusted closing price | ? | ? | ? | ? |
Dividends per share | ? | ? | ? | ? |
Information:
WAL MART STORESINC | ||||
10-K | ||||
Statement of CashFlows | ||||
(Amounts in millions) | ||||
Fiscal Year Ended January 31, | 2015 | 2014 | 2013 | 2012 |
Cash flows from operating activities: | ||||
Consolidated net income | $17,099 | $16,695 | $17,756 | $16,387 |
(Income) Loss from discontinuedoperations, net of tax | (285) | (144) | (52) | 21 |
Income from continuing operations | 16,814 | 16,551 | 17,704 | 16,408 |
Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities | ||||
Depreciation and amortization | 9,173 | 8,870 | 8,478 | 8,106 |
Deferred income taxes | (503) | (279) | (133) | 1,050 |
Other operating activities | 785 | 938 | 602 | 468 |
Changes in certain assets and liabilities,net of effects of acquisitions: | ||||
Increase in accounts receivable | (569) | (566) | (614) | (796) |
Increase in inventories | (1,229) | (1,667) | (2,759) | (3,727) |
Increase in accounts payable | 2,678 | 531 | 1,061 | 2,687 |
Increase in accrued liabilities | 1,249 | 103 | 271 | 30 |
(Decrease) Increase in accrued incometaxes | 166 | (1,224) | 981 | 29 |
Net cash provided by operatingactivities | 28,564 | 23,257 | 25,591 | 24,255 |
Cash flows from investing activities: | ||||
Payments for property and equipment | (12,174) | (13,115) | (12,898) | (13,510) |
Proceeds from disposal of property andequipment | 570 | 727 | 532 | 580 |
Proceeds from disposal of certainoperations | 671 | 0 | 0 | 0 |
Other investing activities | (192) | (138) | (271) | (3,679) |
Net cash used in investingactivities | (11,125) | (12,526) | (12,637) | (16,609) |
Cash flows from financing activities: | ||||
Net change in short-term borrowings | (6,288) | 911 | 2,754 | 3,019 |
Proceeds from issuance of long-termdebt | 5,174 | 7,072 | 211 | 5,050 |
Payment of long-term debt | (3,904) | (4,968) | (1,478) | (4,584) |
Dividends paid | (6,185) | (6,139) | (5,361) | (5,048) |
Purchase of Company stock | (1,015) | (6,683) | (7,600) | (6,298) |
Dividends paid to noncontrollinginterest | (600) | (426) | (282) | (526) |
Purchase of noncontrolling interest | (1,844) | (296) | (132) | 0 |
Other financing activities | (409) | (260) | (58) | (71) |
Net cash used in financingactivities | (15,071) | (10,789) | (11,946) | (8,458) |
Effect of exchange rates on cash | (514) | (442) | 223 | (33) |
Net (decrease) increase in cash and cashequivalents | 1,854 | (500) | 1,231 | (845) |
Cash and cash equivalents at beginning ofyear | 7,281 | 7,781 | 6,550 | 7,395 |
Cash and cash equivalents at endof year | $9,135 | $7,281 | $7,781 | $6,550 |
Supplemental disclosure of cash flowinformation | ||||
Income tax paid | 8,169 | 8,641 | 7,304 | 5,889 |
Interest paid | 2,433 | 2,362 | 2,262 | 2,346 |
WAL MART STORESINC | ||||
10-K | ||||
Balance Sheet | ||||
(Amounts in millions except per sharedata) | ||||
January 31, | 2015 | 2014 | 2013 | 2012 |
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $9,135 | $7,281 | $7,781 | $6,550 |
Receivables | 6,778 | 6,677 | 6,768 | 5,937 |
Inventories | 45,141 | 44,858 | 43,803 | 40,714 |
Prepaid expenses and other | 2,224 | 1,909 | 1,551 | 1,685 |
Current assets of discontinuedoperations | 0 | 460 | 37 | 89 |
Total current assets | $63,278 | $61,185 | $59,940 | $54,975 |
Property and equipment, at cost | 177,395 | 173,089 | 165,825 | 155,002 |
Less accumulated depreciation | (63,115) | (57,725) | (51,896) | (45,399) |
Property and equipment, net | 114,280 | 115,364 | 113,929 | 109,603 |
Property under capital lease | 5,239 | 5,589 | 5,899 | 5,936 |
Less accumulated amortization | (2,864) | (3,046) | (3,147) | (3,215) |
Property under capital lease, net | 2,375 | 2,543 | 2,752 | 2,721 |
Goodwill | 18,102 | 19,510 | 20,497 | 20,651 |
Other assets and deferred charges | 5,671 | 6,149 | 5,987 | 5,456 |
Total assets | $203,706 | $204,751 | $203,105 | $193,406 |
LIABILITIES ANDSHAREHOLDERS EQUITY | ||||
Current liabilities: | ||||
Short-term borrowings | $1,592 | $7,670 | $6,805 | $4,047 |
Accounts payable | 38,410 | 37,415 | 38,080 | 36,608 |
Accrued liabilities | 19,152 | 18,793 | 18,808 | 18,154 |
Accrued income taxes | 1,021 | 966 | 2,211 | 1,164 |
Long-term debt due within one year | 4,810 | 4,103 | 5,587 | 1,975 |
Obligations under capital leases duewithin one year | 287 | 309 | 327 | 326 |
Current liabilities of discontinuedoperations | 0 | 89 | 0 | 26 |
Total currentliabilities | 65,272 | 69,345 | 71,818 | 62,300 |
Long-term debt | 41,086 | 41,771 | 38,394 | 44,070 |
Long-term obligations under capitalleases | 2,606 | 2,788 | 3,023 | 3,009 |
Deferred income taxes and other | 8,805 | 8,017 | 7,613 | 7,862 |
Redeemable non-controlling interest | 0 | 1,491 | 519 | 404 |
Commitments and contingencies | 0 | 0 | 0 | 0 |
Shareholders equity: | ||||
Common stock | 323 | 323 | 332 | 342 |
Capital in excess of par value | 2,462 | 2,362 | 3,620 | 3,692 |
Retained earnings | 85,777 | 76,566 | 72,978 | 68,691 |
Accumulated other comprehensive income(loss) | (7,168) | (2,996) | (587) | (1,410) |
Total Walmart shareholders' equity | 81,394 | 76,255 | 76,343 | 71,315 |
Noncontrolling interest | 4,543 | 5,084 | 5,395 | 4,446 |
Total equity | 85,937 | 81,339 | 81,738 | 75,761 |
Total liabilities and shareholdersequity | $203,706 | $204,751 | $203,105 | $193,406 |
WAL MART STORESINC | ||||
10-K | ||||
Income Statement | ||||
(Amounts in millions except per sharedata) | ||||
Fiscal Year Ended January 31, | 2015 | 2014 | 2013 | 2012 |
Revenues: | ||||
Net sales | $482,229 | $473,076 | ####### | $443,416 |
Membership and other income | 3,422 | 3,218 | 3,047 | 3,093 |
485,651 | 476,294 | 468,651 | 446,509 | |
Costs and expenses: | ||||
Cost of sales | 365,086 | 358,069 | 352,297 | 334,993 |
Operating, selling, general andadministrative expenses | 93,418 | 91,353 | 88,629 | 85,025 |
Operating income | 27,147 | 26,872 | 27,725 | 26,491 |
Interest: | ||||
Debt | 2,161 | 2,072 | 1,977 | 2,034 |
Capital leases | 300 | 263 | 272 | 286 |
Interest expense | 2,461 | 2,335 | 2,249 | 2,320 |
Interest income | (113) | (119) | (186) | (161) |
Interest, net | 2,348 | 2,216 | 2,063 | 2,159 |
Income from continuing operations beforeincome taxes | 24,799 | 24,656 | 25,662 | 24,332 |
Provision for income taxes: | ||||
Current | 8,504 | 8,619 | 7,976 | 6,722 |
Deferred | (519) | (514) | (18) | 1,202 |
Total provision for income taxes | 7,985 | 8,105 | 7,958 | 7,924 |
Income from continuing operations | 16,814 | 16,551 | 17,704 | 16,408 |
Income (Loss) from discontinuedoperations, net of tax | 285 | 144 | 52 | (21) |
Consolidated net income | 17,099 | 16,695 | 17,756 | 16,387 |
Consolidated net income attributable tononcontrolling interest | (736) | (673) | (757) | (688) |
Consolidated net incomeattributable to Walmart | $16,363 | $16,022 | $16,999 | $15,699 |
Net income per common share: | ||||
Basic income per common share fromcontinuing operations to Walmart | $5.01 | $4.87 | $5.03 | $4.55 |
Basic income (loss) per common share fromdiscontinued operations | $0.06 | $0.03 | $0.01 | ($0.01) |
Basic net income per common shareattributable to Walmart | $5.07 | $4.90 | $5.04 | $4.54 |
Diluted income per common share fromcontinuing operations to Walmart | $4.99 | $4.85 | $5.01 | $4.53 |
Diluted income (loss) per common sharefrom discontinued operations | $0.06 | $0.03 | $0.01 | ($0.01) |
Diluted net income per common share | $5.05 | $4.88 | $5.02 | $4.52 |
Weighted-average number of commonshares: | ||||
Basic | 3,230 | 3,269 | 3,374 | 3,460 |
Diluted | 3,243 | 3,283 | 3,389 | 3,474 |
Dividends declared per common share | $1.92 | $1.88 | $1.59 | $1.46 |
Fiscal Year Ended | 1/31/2015 | 1/31/2014 | 1/31/2013 | 1/31/2012 |
Adjusted Closing Price | $83.94 | $71.97 | $65.79 | $56.32 |
Common Shares Outstanding (millions) | 3,228 | 3,233 | 3,314 | 3,418 |