PREFACE
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INTRODUCTION TO THE CORPORATE ANNUAL
REPORT:
A Business Application with IFRS Content
3
d
edition
Copyright 2011 by Applied Accounting Analytics. All rights reserved. Reproduction or
translation of this book beyond that permitted by the applicable copyright law without Applied
Accounting Analytics’ permission is prohibited. Requests for permission to reprint or for further
information should be directed to
[email protected] or
[email protected].
ISBN: 978-0-9841839-2-0
mailto:
[email protected]mailto:
[email protected]To be completed by the student and submitted with the completed annual
eport project according to your instructor’s requirements.
Complete the following form before you submit your assignment. This step is required to
validate your compliance with sections 107 or 108 of the 1976 United States Copyright
Act.
1. Remove the front cover of the workbook and identify:
Student Name: Arnold Bowleg
Term: Summe
Selected Company: WalMart
Instructor: Dr. Joung Kim
2. Print your completed electronic template.
3. Attach the following:
This page completed with all required information.
Completed Word form template. Form template boxes expand as you input
esponses.
Arnold Bowleg
1
CHAPTER 1 - INTRODUCTION
Select a Company and Gather Documents
Chapter 1: Select a Company and Gather Documents – Question 1
Identify with an ―X‖ the primary source of data for this project.
X Annual report to shareholders
Click
here to
enter
text.
Annual report to shareholders with a letter from Chief Executive Officer
and SEC Form 10-K as part of the annual report to shareholders. The
annual report may include additional general company information.
X SEC Form 10-K and the company website.
Fill in the page numbers from the annual report where the following are located.
Required information for this
workbook project.
Page
No.
Required information for this
workbook project.
Page No.
Financial Highlights
Not absolutely necessary, but very
common in annual report to shareholders.
Not in SEC Form 10-K. May be posted on
company website. If so put WEB in Page
No. box.
If not available, put N/A in Page No. box.
N/A
Chief Executive Officer Letter
May be labeled President’s, CEO’s or
other top official’s message or letter to the
shareholders
Not in SEC Form 10-K. Likely posted on
company website if SEC Form 10-K used
to satisfy the annual report to shareholders
eporting requirement. If so put WEB in
Page No. box.
1
Management’s Discussion and
Analysis (MD&A)
18
Notes to Financial Statements
Put range of pages, for example, 47 to 58.
36 to 55
Income Statement
May be labeled Statement of Earnings 32
Report of Independent
Accountants or Independent
Auditors’ Report
57
Balance Sheet
May be labeled Statement of Financial Position 33
Five- or Ten-Year Summary of
Operating Results
Item 6 in SEC Form 10-K
17
Statement of Change in
Stockholder’s Equity
34
Management’s Report
(Responsibility) on Internal
Control over Financial
Reporting
Item 9A. Control and Procedures in SEC 10-K
58
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Statement of Cash Flows
35
Investor and Company
Information or Shareholder
Information
60
Identify Why You Selected This Company
Chapter 1: Identify Why You Selected This Company – Question 1
A) What is/are your motivation(s) or interest(s) in selecting this company?
[See above for examples.]
B) What question(s) are you seeking to answer?
[For example, is the company profitable? Can the company change and develop new products
and services to be competitive? Would I invest in this company? Will the company provide
ewarding career opportunities? In chapter 5 you will have pulled together the financial and
nonfinancial information to answer these question(s).]
A) Walmart is one of the larget store in United States of America. How the company
works, how it deals with investors and other stakeholders is required to be enquired.
Thus, this company is selected. The reason behind its selection is to make informed
decision regarding its purchase or sale of its stock.
B) The long-term growth potential, profitability, solvency of the company is needed to
e studied. The expected returns, future opportunities, future developments are to be
evaluated.
Company and Annual Report Essentials
Chapter 1: Company and Annual Report Essentials – Question 1
What is the company’s complete name?
Wal-Mart Stores, Inc.
Chapter 1: Company and Annual Report Essentials – Question 2
What is the address of your company’s corporate headquarters?
702 SW 8
th
Street
Bentonville, AR 72716-8611
479-273-4000
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Chapter 1: Company and Annual Report Essentials – Question 3
Identify the company’s website address.
http:
corporate.walmart.com
Chapter 1: Company and Annual Report Essentials – Question 4
Identify the telephone number and e-mail address of the company’s Investor Relations
Department.
Telephone number: 479-273-6463
E-mail address:
[email protected]Chapter 1: Company and Annual Report Essentials – Question 5
Which stock exchange lists your company?
NYSE
Chapter 1: Company and Annual Report Essentials – Question 6
What is your company’s stock exchange trading symbol?
WMT
Chapter 1: Company and Annual Report Essentials – Question 7
What is your company’s Standard Industrial Classification (SIC) and sector? Run a
search on ―Standard Industrial Classification,‖ and the classification and code will be
identified. Your company may list more than one SIC code number. The first listed is
considered the primary SIC for the company.
For example, search – The Home Depot SIC –
ings up a listing of sources. InvestorWords is
one website location option - http:
www.investorwords.com/cgi-
in/stocksymbol.cgi?ticker=HD. Move down the page and you will find:
SIC Code: 5211
Sector: Basic Materials, Construction, Retail
Industry: Lumber and other building materials
SIC Code: 5331
Sector: Retail Variety Stores
http:
corporate.walmart.com
http:
www.investorwords.com/cgi-bin/stocksymbol.cgi?ticker=HD
http:
www.investorwords.com/cgi-bin/stocksymbol.cgi?ticker=HD
http:
www.investorguide.com/cgi-bin/sector.cgi?name=Basic_Materials
http:
www.investorguide.com/cgi-bin/sector.cgi?name=Construction
http:
www.investorguide.com/cgi-bin/sector.cgi?name=Retail
http:
www.investorguide.com/cgi-bin/industry.cgi?sic=5211
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Chapter 1: Company and Annual Report Essentials – Question 8
Locate the board of directors listing. How many board members does your company
have?
14
Chapter 1: Company and Annual Report Essentials – Question 9
How many of the directors are company employees, labeled inside directors? And how
many are non-company directors, labeled outside directors? Why does a company want
and need outside directors?
(Inside and outside directors are typically identified as such by their title and company.)
Inside directors – 5
Outside directors – 9
Outside directors are needed because they provide unbiased and clear opinion. They do
not have any personal interest in company.
Chapter 1: Company and Annual Report Essentials – Question 10
Leadership addresses the stockholders, typically, once a year at the annual stockholders
meeting. Identify where and when this occu
ed, as reported in your annual report.
The company’s Annual Meeting of Shareholders will be held on Friday, June 7, 2013, at 7:00 a.m. (Central Time)
in the Bud Walton Arena on the University of Arkansas campus, Fayetteville, Arkansas
Company Strategy and Business Environment
Chapter 1: Company Strategy and Business Environment – Question 1
Review the chairman’s message of your company’s annual report. Does it appear to be
uplifting or somewhat apologetic? Identify phrases that support your position.
Uplifting. He is talking about future plan and past good performance. As I reflect on
fiscal 2013, there are many areas where Dad would be proud.
Chapter 1: Company Strategy and Business Environment – Question 2
Check below the one primary company strategy identified in the chairman’s message.
Support your answer with phrases found in the chairman’s message that pointed you to
the identified corporate strategy.
Growth: VerticalClick here to enter text.
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Horizontal Click here to enter text.
Concentric The company has a strong focus on technology.
Conglomerate Click here to enter text.
Stability Click here to enter text.
Retrenchment Click here to enter text.
Phrases to support your above conclusion:
The world’s e-commerce market continues to expand rapidly, and
Walmart is investing to serve customers and to gain share of this
huge opportunity. Our e-commerce business unites and expands
the Walmart customer experience. We are building best-in-class
capabilities in online, mobile and social that, when combined with
our 10,700 stores and approximately 245 million weekly shoppers,
allow us to do what no one else can – offer customers seamless
access to the products they want anytime, anywhere.
We have clear objectives to drive e-commerce growth – excelling at
the fundamentals, innovating in more ways, winning in key markets
and uniting and expanding the Walmart shopping experience
Chapter 1: Company Strategy and Business Environment – Question 3
Briefly summarize the company’s discussion found in Item 1 of SEC Form 10-K.
Type of business:
Retail
Major business segments:
Walmart U.S, Walmart International and Sam’s Club
Primary customers:
The everyday consumer who is looking for value in everyday services and products. Low
income persons and families.
Primary products and/or services:
Food, Clothing, Household Appliances, Electronics and Grocery & Pets
Other:
Technology
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Chapter 1: Company Strategy and Business Environment – Question 4
Identify
oad-based social, political, economic, and technological concerns that may
affect your company. Put N/A if one of the categories does not apply.
Social:
Public health emergencies, changing consumer needs and preferences
Political:
Instability in the countries in which foreign suppliers are located, Civil unrest,
distu
ances, te
orist attacks.
Economic:
Financial instability of suppliers, labor problems of suppliers, Exchange Rate, Inflation,
Foreign trade policies, tariff etc.
Technological:
Failure to provide necessary technological interfaces with merchandising programs
including user friendly software applications for smart phones and tablets.
Other:
Merchandise quality issues, natural disasters
Wrap-up
Chapter 1: Wrap-up – Question 1
After further review of additional information you should now be confident in
identifying the one primary company strategy, beyond the insight provided by the
chairman’s message?
Check below the one primary company strategy identified in the chairman’s message
and all other supporting documents. Support your answer with phrases.
Growth: VerticalSam club house, technology
Horizontal Click here to enter text.
Concentric Click here to enter text.
Conglomerate Click here to enter text.
Stability Click here to enter text.
Retrenchment Click here to enter text.
Phrases to support your conclusion from information gathered from the chairman’s
message, Item 1 of the SEC Form 10-K and other insight gained from completing
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Chapter 1.
The world’s e-commerce market continues to expand rapidly, and
Walmart is investing to serve customers and to gain share of this
huge opportunity. Our e-commerce business unites and expands
the Walmart customer experience. We are building best-in-class
capabilities in online, mobile and social that, when combined with
our 10,700 stores and approximately 245 million weekly shoppers,
allow us to do what no one else can – offer customers seamless
access to the products they want anytime, anywhere.
We have clear objectives to drive e-commerce growth – excelling at
the fundamentals, innovating in more ways, winning in key markets
and uniting and expanding the Walmart shopping experience
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CHAPTER 2 - ANNUAL REPORT STRUCTURE
Financial Highlights
Chapter 2: Financial Highlights – Question 1
Review the financial highlights of your company’s annual report to the shareholders.
Identify net sales or revenues, net income, basic earnings per share (BEPS), and total
assets for the cu
ent and preceding years. These are the most common values included
in financial highlights. If your company reports something different, simply cross out an
item here and recap what is reported. SEC Form 10-K does not provide financial
highlights. You may find this information on the company website. If not available put
N/A in the first row of boxes.
Categories Cu
ent Year One Year Prior Two Years Prior
Net sales or revenues $466,114 $443,854 $418952
Net income $16,999 $15,699 $16,389
Basic EPS $5.04 $4.54 $4.48
Total Assets $203,105 $193,406 $180,782
Based on your preliminary review, is your company performing better than, equal to, or
less favorably than in the prior year? Briefly explain.
The performance of the company has improved as sales, total assets, basic EPS has
showed an upward trend.
General Company and Marketing Information
Chapter 2: General Company and Marketing Information – Question 1
Look for pictures of product and people that are colorful and send a positive company
signal to the reader.
Category
Example: Volunteer
Activities
Message
Ongoing and contributing to the success of the community
Price leadership drives
traffic and ticket
Our role at
Sam’s Club is to support our members by creating value
for them through price investments across the club. We’re
driving operating efficiencies, such as refining workforce
scheduling to more closely align with member traffic
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patterns
Innovations that enhance
the shopping experience
We invest in technology to help members shop smarter
Disciplined growth
through new stores and e-
commerce
We’re
focused on disciplined investment in high potential
markets, as the company strengthen our presence in mature
markets.
Local relevance, world-
class capability
We stay close to our customers in every market to
understand their unique preferences
Deeper talent enables
growth
We’re investing in our outstanding group of Walmart
International associates.
What is the
oader message from this information?
Company has a strong focus on value pricing and technology leadership which focus on
innovation and enhancing the shopping experience.
Management’s Discussion and Analysis
Chapter 2: Management’s Discussion and Analysis – Question 1
Results of Operations:
Identify the primary drivers/issues that explain cu
ent and future results of operations
discussed in the MD&A. For example, the gross profit percentage increased because of
improved buye
supplier relations resulting in greater overall operating performance. Or
an increase in operating expenses because of increased fuel costs reduced profits. List
the six major drivers/issues of performance you find in the MD&A section of the annual
eport.
1.Cash flows provided by operating activities have historically supplied company with
significant source of liquidity.
2.The credit rating of the company is good.
3.Operating expenses as a percentage of segment net sales decreased 27 and 10 basis
points during fiscal year 2013 and 2012 because of continued focus on productivity and
expense management.
4.Total revenues increased 5% and 6% for fiscal year 2013 and 2012 due to growth in
etail square feet and positive store and club sales.
5.The tax rate of 2013 was lower than tax rate of 2012 and 2011 because of number of
discrete tax items, including positive impact from fiscal 2013 legislative changes arising
at the end of the fiscal year, most notably the American Taxpayer Relief Act of 2012.
6.Gross Profit Ratio decreased 12 and 33 basis points in 2013 and 2012 respectively
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ecause of Walmart US sement’s strategic focus on price investment and low price
leadership.
Liquidity:
Recap what you find about your company’s liquidity in the MD&A section of the
annual...