Wal-Mart V/S Target1

Financial Statements Lester M. Legette Trident University International

ACC501- Accounting for Decision Making Dr. Ralph Wayne Ezelle 20 February 2012

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The companies chosen for this SLP is Wal-Mart, and Target. I have analyzed their financial statements from 2008-2010. Over the three year period both companies have shown a profit or increase in most areas. In 2008 both companies had higher numbers in accounts payable, account receivable, and inventory, but since then they have had a steady increase in all areas. Comparing the financial statements Wal-mart is doing extremely better than its competition Target. While Target only operates 1763 stores in 49 states, Wal-Mart has branched off and has a chain of stores SAMs club, and Wal-Mart international. Wal-Mart has over nine thousand retail stores in fifteen countries. Wal-Marts fiscal year 2011 sales are at $419 billon; Wal-Mart employs more than two million associates worldwide. Wal-Mart continues to be a leader in sustainability, corporate philanthropy, and employment opportunity. Trends Revenues: Both companies tend to show an increase in revenues every year since 2008. On an average Wal-mart tends to make about $340,000 more than Target. Although Target shows an increase in profit the two companies are not competing on the same level Cost of goods sold: Wal-mart has showed an increase every year since 2008 with its most fluctuating increase from 2008 to 2009. Target actually showed a decrease from 2008 to 2009, but was able to get back on track in 2010 and showed an increase in profit. Accounts Receivable: In this category both companies had their most profitable year in 2008 and have not showed number even close since then. This tells me that consumers were charging, and spending more money in 2008 than in 2009-2010. Accounts Payable: Both companies numbers remained relatively the same for all three years in this category, both showed signs of decline in 2009.

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Inventory: Since 2008, Wal-Marts inventory has been on a slight decrease whereas Target has been showing increase in their inventory. For this module I was required to use the balance sheet, the income statement, and the cash flow statement in order to obtain a true accurate reading of how well both companies were doing and give a comparison of how well they stand up with each other. Revenues and cost of goods sold came from the Income statement these categories were helpful in determining how much profit each company made during the three year time period. Inventories and Accounts payable were retrieved from the Balance sheet, these were helpful in determining the amount of assets, and liabilities each of the companies had. Both of these financial statements are very important in determining a company wealth. The income statement is an accurate reading of how much the company has made during certain time periods, whereas the balance sheet gives you an accurate reading on much a company owes in terms of payroll checks or for paying back loans. This statement also gives you a true reading on the amount of Assets a company has that can be turned into cash within one year. In all you need both of these statements to get a true and accurate reading of how well a company are doing.

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Wal-Mart V/S Target Wal-Mart (millions) Revenues 2010 2009 2008 $408,085 $404,254 $378,799 Cost of goods sold 2010 2009 2008 $304,444 $303,941 $286,515 Accounts receivable 2010 2009 2008 $297 $101 $564 Account payable 2010 2009 2008 $30,451 $28,849 $30,370 Inventory 2010 2009 2008 $33,160 $34,511 $35,180 Target(millions) Revenues $67,390 $65,357 $64,948 Cost of goods sold $45,725 $44,062 $44,157 Accounts receivable $78 $57 $458 Account payable $6,511 $6,337 $6,721 Inventory $7,179 $6,705 $6,780

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References Target. (2011). Target 2011 Investors. Target.com. Retrieved January 25, 2012 from http://investors.target.com/phoenix.zhtml?c=65828&p=irol-IRHome

Walmart. (2011). Walmart 2011 Investors. Walmart.com. Retrieved January 25, 2012 from http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome