Assignment ContentCreate a 5- to 10-slide presentation and use the same publicly traded company selected in Week 2 to address the following:
Be sure to use the most recent SEC 10-k or Annual report.Identify the Company’s current liabilities for the past two years?Compare the current portion of long-term debt for the past two years?Discuss some of the items found in the current liability section.Describe any lease obligations the Company disclosed.Explain what contingency liabilities are disclosed in the financial statements?Recommend, from the perspective of a bank, whether or not you would support this company.Compute the Debt ratio and Debt to Equity ratio
Week 2 Presentation
Alexander Melendez
ACC/42
Greg Watters
January 27, 2020
Name of the company
The name of the public
company is:
Walmart Inc. (WMT)
Walmart’s cash balance for the past 2 years
Walmart’s accounts receivable for past 2 years
Notes relevant to Walmarts cash and cash
equivalents
Walmart generates lots of cash because it has a competitive advantage.
In this regard, its yearly cash and cash equivalents declined from $6,867.00
Mil in 2017 to $6,756.00 Mil 2018, and then increased to $7,722.00 Mil in
2019.
Notably, the company has ongoing businesses that generate more cash than
it currently burns.
Notes relevant to accounts receivable
Walmarts accounts receivable are only considered to be worth 75% its book
value.
In this case, for the quarter that ended in October 2019, it had net-net
working capital worth $-122,935 Mil.
The company measures its accounts receivable through the Days Sales
Outstanding.
For the last quarter October 2019, its Days Sales Outstanding was 4.00.
Walmarts key accounting policies
Walmart calculates its inventories at lower of market or cost.
For its segment inventories, it mostly uses first out and last in methods.
Walmart prepares its annual account ting reports in conformity with GAAP.
Notably, it uses different estimates in preparing these reports.
It uses financial reporting and internal control to provide reasonable
assurance in terms of financial reports.
The allowance for doubtful accounts
Walmart makes some sales and failure to collect any payment.
The conviction here is that the more the company collects cash as payment,
the more the accounts receivable decrease.
For financial report, the company uses straight line depreciation method.
Walmarts inventory for the last two years
2018:
43,783,000
2019
44,269,000
Walmart’s policies for reporting inventory
Walmart values inventories at the lower of either market of cost.
Its inventory segments uses last-in, first-out as the inventory method of
accounting.
After valuation and LIFO, Walmart expects to either consume or sell the
reserves of inventory within one year.
AR turnover and Days Outstanding for
Receivable.
2018: 5,614,000
2019: 6,283,000
Average accounts receivables= (5,614,000 + 6,283,000)/2= 5,948,500
Credit sales: 514,405,000
AR turnover= 5,948,500/514,405,000= 0.012
Days outstanding for receivable: Accounts Receivable/Revenue*Days in Period.
0.012 * 91= 1 day.
Inventory turnover and Days Sales in
Inventory.
Average inventory: (43,783,000+44,269,000)/2= 44,026,000
Credit sales: 514,405,000
Inventory turnover= 44,026,000/514,405,000= 0.086
Days Sales in Inventory: Average inventory/revenue*91
0.086*91
Days Sales in Inventory= 8 days.
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