Analysis of 10-K for Walmart

Three primary documents in Walmart’s Sec-10K are in the category of
financial statements. The forms include the income statement, balance sheet, and the cash flow
statement. For Walmart’s investors, the three pieces of information are crucial as they indicate
one primary concept. The indications are Walmart’s net income concerning non-controlling
interests. The aim is to demonstrate the level at which the company is positioned in terms of
future performance. Even though Walmart’s investors use the financial documents separately,
there is a connection between the forms. For instance, if there are changes in the company’s
assets and liabilities, there will be an indication of a change in its revenue and expenses in the
income statement. In such a situation, the company practices can either gain or make losses. The
cash flow can provide more information on the cash that appears in the balance sheet, but it will
not be parallel to the income statement’s net income. In the 2019 fiscal year, Walmart’s net
income concerning the non-controlling assets was $443.9 million, while the projected amount for
the 2020 financial years is $594 million.
The net income to the non-controlling interest is continuing to be stable even with the
availability of very little volatility. There are two parts of the consolidated revenue. One of the
components is attributed to the non-controlling interest, and the other part is net income
attributed to the company. When the company makes purchases worth 50% of stocks from
another company, it will be the parent company. The company whose stocks have been bought
will become the subsidiary company. Most of the segments of the company are under full
ownership by Walmart. Suppose the request of Walmart is over 50% of the subsidiary stock. In
that case, the GAAP will require the organization to make reports that will indicate 100% of the
revenue and 100% of the subsidiary’s expenses. From the segment, Walmart will control the
subsidiary even if they don’t have 100% of the stocks. Thus, there is segregation of the total
consolidated income statement into segments that they have a license and owned by an outsider.
Walmart will own the consolidated net income attributed to the organization, while the external
shareholders will own consolidated net income attributed to the non-controlling interests.
Also, there are segmentations in terms of equity. Their equity of the company is divided
into two. One of the parts is the total shareholder’s equity for Walmart, and the other segment is
non-controlling assets, which are not redeemable. The balance sheet for Walmart accounts for
100% of the assets and 100% of the subsidiary company’s liabilities in control. For the balance
sheet’s effective balancing, the non-controlling interest that is not redeemable must be added to
the company’s overall equity. At the start of the quarter of the 2008 fiscal year, the SG&A
expenses for Walmart has increased from 18.97 to 21.05. In the 2019 fiscal year, the company
spent $107.1 million on selling, general and administrative expenses. The amount is a
combination of direct and indirect costs, general and administrative expenses.
The income from continuing operations before taxes on income is then established
through income loss from equity method of investments before any deductions on the income tax
from the gains and the revenue related to no controlling interest. The overall consolidated net
income for Walmart will now represent the profits and losses for the stipulated time, which is the
net of the income taxes concerning the parent. Walmart’s consolidated net income attributed to
the company decreased from 2016 to 2017 and from 2017 to 2018. From section 10K report, the
consolidated net profit associated with Walmart can be summarized as follows (Figures in
Millions)
Financial Year 2016 2017 2018
Consolidated Net $10,523 $14,293 $15, 080

ADVANCED ACCOUNTING SEC10K REPORT FOR WALMART 3
Income
Consolidated Net
Income Attributed to
Non-controlling
Interest

($ 661) ($ 650) ($ 386)

Consolidated Net
Income Attributable
to Walmart

$9,862 $13,643 $14,694

The long-term assets are a sum of the carrying amounts of various cash assets, sold and
consumed for one year and beyond. For Walmart, the long-term investments have increased from
$6,468 million in 2017 to $7,143 million in 2018. The total assets will sum all the carrying
amounts in the balance sheet that are recognized. Walmart’s total current assets have increased
from $198,825million in 2017 to $204,522 million in 2018.
The net cash in investing activities will encompass inflow in the investing activities’
money, excluding operations that are discounted. The activities include the collection of loans
and disposing of investments. Walmart Inc.’s net cash provided by operating activities declined
from $31.67 billion to $27.75 billion. The net cash used for financing activities also reduced
from $19.07 billion to $2.54 billion. On the other hand, the financial activities will be the cash
inflow amount from economic activities, excluding discounted events. Such activities include
getting of resources from owners and provision of returns on their investment. Besides, there is
borrowing and payment of amounts of the amounts borrowed and even settling its obligations.
Cash and cash equivalents for the year 2018 and 2019 increased by $742 million from a negative
figure of $130 million in 2017 and 2018. and negative $1,747 million in 2016 and 2017. The
cash and cash equivalents figures show that the company has been gradually improving its cash
flow position.
The operating income for Walmart as a percentage of the net sales has increased from
2017 to 2018. However, there has been a significant decrease in the year 2019. The continuing
operations before tax as a percentage of the net sales have also decreased from 2017 to 2018 and
increased in 2019. The company’s consolidated net income fell from the 2017 financial year to
2018 and raised in the 2019 fiscal years to surpass the 2017 figures. From the standard size, it is
possible to establish the company’s performance level compared with other companies of the
same size but in different industries.
However, there is a limitation to the non-controlling interests. The non-controlling part
fails to use the standard definition and computation of the various ratios. Walmart uses a
different formula in the determination of the percentage of ownership of the subsidiary. Many
farms put into consideration the current liabilities in the decision of the current ratio. However,
that’s not the case in Walmart as it does not consider the bank overdraft from all the current
liabilities in determining the percentage. Also, the company ignores the qualitative aspects of the
organization in using non-controlling interest. They only consider the quantitative, which is the
monetary aspect of the analysis. The external factor of recession is also widely ignored in the
company’s analysis of its non-controlling interest.