Balance sheet 1

On the other hand, towards the end of the fiscal year 2000 the current assets and current liabilities swelled in such a way that the amount of current liabilities surpassed the amount of the current assets. However, the increased assets values were explained by the input into new outlets and other supplementary cost, thus increasing the gross productive assets. Additionally, property plant and equipment values were not accounted for accumulated depreciation; instead its original value was added into the retained earnings. So, from a $4.4.02 billion level or 69.9 % in 1990, Wal-Mart’s gross productive assets rose to $45.348 billion or 84.1% in 2000 (Jablonsky & Basrsky, 2001). Apparently, from the perspective of a prospective investor and even the shareholders, the financial managerial decision to restructure the company balance sheet, which in a way is a perfect company valuation, is successful.

Moreover, Riahi-Belkaoui in 1999 understood Wilson’s observation on the complimentary performance of stocks in the event that cash flows would show huge values as in the case of WAL-Mart’s restructured financial statement, and vice-versa. Additionally, the reputation built by Wal-Mart with its restructured balance sheet (Jablonsky & Basrsky, 2001) may give the company a competitive edge, which apparently investors consider as a factor in determining a firm value (Riahi-Belkaoui, 1999).