Wal-Mart Accounting Project

Gray Snowden

Professor Bolt

Managerial Accounting

15 March 2012

Wal-Mart Corporation

Wal-Mart, the largest corporation in the world, has been continuing true to its name. Its revenues are steadily increasing, along with production and profit. There are many reasons as to why Wal-Mart is so successful. The main reason is that they are such a large business, making it hard for other companies to compete with their prices and production.

Wal-Mart’s revenues have been steadily increasing. From 2009 to 2010, net sales increased four billion dollars, and from 2010 to 2011 net sales increased roughly fourteen billion dollars. This is clearly a favorable trend. Wal-Mart also pulled in around three billion dollars a year from membership fees from 2009 to 2011. Unfortunately, this amount is steadily decreasing at the rate of one hundred million dollars per year.

Wal-Mart’s membership club, Sam’s, helps distinguish the company from its competitors in addition to bringing in extra revenue each year. It gives the customers the chance to be able to shop in a “membership only” retail store and buy products in mass quantity for a significantly lower price. Their three billion dollar a year income from their membership fees comes directly from the Sam’s Club division. Also, most of Sam’s Club’s business currently comes from smaller businesses, privately owned companies and small, non-corporation restaurants.

Wal-Mart’s profits have also been steadily rising. From 2010 to 2011, the company witnessed a substantial increase in profits of two billion dollars. Their cost of sales rose dramatically from 2010 to 2011 from 304 billion to 315 billion dollars. This is mainly due to the fact that “Wal-Mart includes in its cost of sales the transportation from each manufacturing facility to the warehouses, and then from the warehouses to the retail stores.”

Although Wal-Mart is producing more, and therefore their costs would certainly rise, fuel plays a huge role...