Financial decisions and Corporate valuations 1

Financial Decisions and Corporate Valuations

Reflecting upon Wal-Mart’s financial statement, the financial managers apparently rendered financial decisions which may have cost the jobs of some employees. Nonetheless, financial growth and development in the business entity are usually expected. Thus, to meet the needs for expansions, shift becomes a proactive option. So, Wal-Mart’s financial managers must have shifted by availing of long-term financing to do long-term investment. In this connection, the idea of Gregory Bateson according to Jablonsky & Basrsky in 2001 was utilized. This was the restructuring of the balance sheet.

This restructured balance sheet now contains: “1) the long term investment section with the working capital, gross productive assets, and gross assets; 2) the long term financing section with external debt financing, external equity financing, and internal equity financing; and 3) internal equity financing equals retained earnings plus several score-keeping adjustments that have been added back to retained earnings” (Jablonsky & Basrsky, 2001).