Reference no: EM132479073
You reviewed the financial statements for Wal-Mart in week 1. In addition, the website houses Walmart's December 31, 2015, Form 10-K. You should read the management discussion and analysis (MD&A), financial statements, and notes to the financial statements, especially Note 2, "Summary of Significant Accounting Policies."
Required
Question 1. Given your knowledge of Walmart's key success and risk factors, use the note information described above to evaluate Walmart's accounting quality.
Question 2. If you believe that Walmart's accounting policy does not yield measurements of assets and liabilities that reflect economic reality and a measurement of net income that is predictive of future earnings, suggest any changes that you would make to assets, liabilities, and earnings to improve accounting quality. (At this point in your learning process, if you do not have specific numerical adjustments to propose, at least describe potential journal entries you would make to change the financial statements, if any, and what information you might need to make those entries.)
Question 3. Evaluate whether your proposed adjustments are necessary for (1) credit analysis and (2) equity valuation.
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