Disclosure

Disclosure Paper

Micah Lewis

ACC/422 Intermediate Financial Accounting II

08/03/15

Gregory Watters

Wal-Mart Disclosure

Management strives to report their financial results in a clear and understandable manner, although in some cases accounting and disclosure rules are complex and require them to use technical terminology (Wal-Mart). An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements (Wal-Mart). An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation (Wal-Mart). . The disclosure of constant currency amounts or results permits investors to understand better Walmart’s underlying performance without the effects of currency exchange rate fluctuations or acquisitions (Wal-Mart). For fiscal 2015, they did not meet their objective of growing operating income at the same rate or a faster rate than net sales as operating income increased 1.0%, while net sales increased 1.9% when compared to the previous fiscal year (Bloomberg). This was primarily due to the factors they discussed for not leveraging operating expenses. For fiscal 2014, they also did not meet their objective of growing operating income at a faster rate than net sales as operating income decreased 3.1% while net sales increased 1.6%, when compared to the previous fiscal year (Bloomberg). This was primarily due to the factors they discussed for not leveraging operating expenses, partially offset by increases in membership and other income of 5.6% (Bloomberg).

Equivalents

Wal-Mart’s cash equivalents consists of credit cards, debit cards, other electronic transactions, securities, bank accounts, and treasury bills. Cash and cash equivalents were $9.1 billion and $7.3 billion for fiscal 2015 and 2014, respectively (Wal-Mart). Their working capital deficit was $2.0 billion and $8.2 billion at January 31,...