ECONOMIC DECISIONS

How People Make Economic Decisions

How People Make Economic Decisions

Introduction

This paper explores the current financial position of Wal-Mart, which is eighteenth largest publicly held company. This paper focuses on the disclosures of Wal-Mart, particularly cash and cash equivalents, receivables, and inventories. Further, various components of Wal-Mart's cash and cash equivalents are identified in the paper.

Discussion

Wal-Mart Stores Inc. is the world's largest retailer with over 2 million employees, and 8,500 establishments in 15 countries under 55 different names. It is also the 18th largest public corporation in United States. Each week, more than 100 million customers visit Wal-Mart establishment. Sam Walton founded the company in 1962 with a simple goal: to offer low prices for all the people. Although he died in 1992, but their values of hard work and dedication are well entrenched in the culture of Wal-Mart even today. This is the possible reason Wal-Mart is a financially strong company. The three heads of balance sheet that is discussed accumulates the amount of three different segments(Annual report, 2011);

The United States segment of Wal-Mart

The international segment of Wal-Mart

The third segment is Sam's Club segment

Cash and Cash Equivalents

As analyzed in the Wal-Mart's balance sheet for the year 2011, the amount of cash and cash equivalents decreased to $7,395 million as compared to previous year's amount $7,907 million (Annual report, 2011). Items considered under the head of cash and cash equivalents are those investments whose maturity period is three months or less. Further, all the debit cards, credit cards and Earning before Tax transactions that's takes less than seven days to process are categorized under cash and cash equivalents (Needles, and Powers, 2010). The total dollar amount that was due from the banks for the above mentioned transactions were $1.2 billion in 2011 and $2.6 billion in 2010. Moreover, under ...