Financial decisions and Corporate valuations 2

“Wal-Mart Restructured Balance Sheets (for the Fiscal Years Ended January

31, 1990 and 2000 – Amounts in Million)” (Jablonsky & Basrsky, 2001)

	1990	Change	2000
Long-Term Investment
Current Assets
Cash and Equivalents	$13	$1,843	$1,856
Receivables	$156	$1,185	$1,341
Inventory	$4,428	$15,365	$19,793
Other	116	$1,250	$1,366
Total Current Assets	$4,713	$19,643	$24,356
Current Liabilities
Accounts Payable	$1,827	$11,278	$13,105
Accrued Liabilities	$995	$9,618	$10,613
Current Debt Due	$24	$2,061	$2,085
Total Current Liabilities	$2,846	$22,957	$25,803
Working Capital	$1,867	($3,314)	($1,447)
Gross Productive Assets
Property, Plant, And Equipment	$4,402	$40,946	$45,348
Gross Other Assets
Other Assets	$55	$9,969	$10,024
Total Long-Term Investment	$6,324	$47,601	$53,925
Long-Term Financing
External Debt Financing
Long-Term Debt	$185	$13,487	$13,672
Long-Term Lease Obligations	$1,087	$1,915	$3,002
Minority Interest	$0	$1,279	$1,279
Total External Debt	$1,272	$16,681	$17,953
External Equity Financing
Common Stock	$273	$923	$1,160
Stock Repurchases	$0	($3,105)	($3,105)
Total External Equity	$273	($2,182)	($1,945)
Total External Debt	$1,272	$16,681	$17,953
Internal Equity Financing
Retained Earnings	$3,728	$21,401	$25,129
Accumulated Depreciation	$972	$8,407	$9,379
Deferred Income Taxes and Other	$115	$644	$759
Stock Repurchases	$0	$3.105	$3,105
Other Equity Adjustments	$0	($455)	($455)
Total Internal Equity	$4,815	$33,102	$37,917
Total Long-Term Financing	$6,324	$47,601	$53,925

Source: Jablonsky & Basrsky, 2001

The figures in the restructured balance sheet noticeably do not necessarily show the itemized account of the long-term investment as well as the financing strategy. However, four financial managerial activities can be readily assumed. One, the financial manager of the company made a long-term investment amounting to $47.6 billion. Two, the financial manager got a long-term financing of equal amount. Three, to have a working capital, the financial manager of the company decided to subtract current liabilities from current assets, which difference is significant to cover the daily operational company expenditures. Four, the financial manager decided to incorporate current assets and current liabilities to come up with a bottom-line company long-term investment asset (Jablonsky & Basrsky, 2001).