Walmart: Reading the Real Financial Statements

Income statement as a picture

Where each revenue dollar goes

*Here gross profit = total revenue − cost of sales, so it includes membership income. The worksheet’s gross profit margin uses net sales only. Green = profit, red = costs.

Find it in the statements

Know the concept, find the account

• 1  Expects to collect from customers → Receivables9,975
• 2  Cost of the merchandise sold → Cost of sales / merchandise costs511,753
• 3  Expense for wages, rent, utilities, advertising → Operating (SG&A) expenses139,884
• 4  Cost of goods still on the shelves → Inventories56,435
• 5  Owes suppliers for goods bought on credit → Accounts payable58,666
• 6  The government’s share of the profit → Provision for income taxes6,152

Find it in the statements

Know the concept, find the account

• 7  Left of revenue after all expenses → Net income20,157
• 8  Cost of buildings and equipment used up so far → Accumulated depreciation111,624
• 9  What buildings and equipment originally cost → Property and equipment, at cost231,617
• 10  Owed to lenders on long-term loans → Long-term debt33,401
• 11  Paid to shareholders → Dividends6,688
• 12  Profit earned and kept over the years → Retained earnings98,313

How the numbers connect

Cost, used up, and what is left

Ratios

Three numbers that describe Walmart