Elasticity exercise points 100 in this project, you are asked

Elasticity Exercise
Points: 100
In this project, you are asked to take sales data, estimate a
demand function, and make a management decision based on
your calculations.
Background
Your company has tasked you with estimating demand for a new
type of frozen snack food that the company has developed. The
existing snacks your company is competing with are well
established in the market and rarely change price. However,
you are not sure how much your consumer will be willing to pay
relative to the existing snacks.
One thing you are confident in is that people will want to buy
more of your new frozen snack on hot days.
Your company has varied the price of the product each of the
last 10 weeks in a test location and collected data on sales. The
results are in Elasticity Exercise.xlsx, and include price
charged, units sold per hour, and the average temperature for
that day.
Your manager has informed you that your company has another
team working on minimizing production costs, so you don’t
have that data yet. “Just find the best price to charge to drive
the highest revenue—we’ll deal with cost data later.”
Instructions
Use the data in ‘Elasticity exercise.xlsx’ listed in the course
assignment page to perform a multiple regression analysis, with
Sales per Hour as your dependent variable and ‘Price’ and ‘Avg
Temp’ as independent variables (See the Elasticity Lecture
Video for tips). Use the results to answer the following
questions. When you have completed the exercise, upload a

word document with your answers.
Questions
1. You have hypothesized that the general form of the demand
function is Qd = f(P, T) where P is the price of ice cream cones
and T is average temperature. Based on your regression
analysis, write out your estimate of the specific form of the
demand for your company’s new snack. In other words, if Qd=a
+ b1P + b2T, what values do a, b1 and b2 take? (Hint: what
should the sign on b1 be, based on the Law of Demand?) (30
pts)
2. Assume the average high temperature will be 80 next year.
Draw the demand curve. Be careful to put P on the vertical axis
and Q on the horizontal axis. This will probably require
rearranging your data so that P looks like a function of Q.
Excel, for example, will by default assume that if your data is in
two columns, the first column is your X or independent
variable.
Please label the vertical intercept (above what price will 0 units
be sold) and the horizontal intercept (if P=0, how many units
are ‘sold’).
Create a graph in Excel or some other software, and embed the
image in the space provided below. Do not submit a photo or
any separate file (.jpg or similar). (30 pts)
Embed Image:
3. A co-worker suggests charging $2.50 per snack. Do you

agree? Calculate the price elasticity of demand if you charge
$2.50 (still assuming an average temperature of 80 degrees).
Use that calculation to argue whether you should charge a price
of $2.50, more than $2.50, or less than $2.50. (20 pts)
4. What price would maximize revenue if your estimate of
demand is correct? How did you arrive at this price? (20 pts)
2013 Annual Report
One mission:
137073_L01_CVRS.indd 2 4/10/13 2:04 PM
A history of delivering strong results
$60B
returned to
shareholders
through dividends
and share
repurchases(1)
More than
123%

in free
cash flow(1)(2)
Increase of
59%
in
earnings
per share(1)
Increase of
(1) Data reflects five-year period from fiscal 2009 through
2013.
(2) Free cash flow is a non-GAAP measure. Net cash provided
by operating activities of continuing operations is the closest
GAAP measure to free cash flow. Reconciliations
and other information regarding free cash flow and its closest
GAAP measure can be found in the Management’s Discussion
and Analysis of Financial Condition and Results
of Operations included in this Annual Report and on our website
at www.stock.walmart.com.
10,700
More than
retail units operated
in 27 countries
75%
of U.S. store
operations management

joined Walmart as
hourly associates
Approximately
245M
Approximately
customers served
weekly in our stores
in 27 countries
To learn more about
Walmart’s business
strategies and company
mission, please visit our
electronic report at
www.stock.walmart.com.
You’ll hear from manage ment,
associates and customers
about our business.
About the cover:
Regardless of the market
where we operate, the
retail format or the
website, Walmart serves
customers with one core
mission: to help people
save money so they can
live better.
137073_L01_CVRS.indd 3 4/10/13 2:04 PM

Walmart 2013 Annual Report || 1
To our shareholders, associates and customers
Over the last few years, I’ve shared with you how we would
build the “Next Generation Walmart” and serve the “Next
Generation customer.” This came from a belief that the
major trends shaping our world are also driving significant
change in the retail landscape – the emerging global middle
class, the faster adoption of mobile technology, rising energy
prices and many others. At Walmart today, we have never
had more clarity around what the world is going to look like,
and what it will take to win with the customer we care so
much about. We’ve developed and executed strategies that
are delivering results, which I’ll highlight in this message.
Just as important, however, are the key strategic areas where
we are especially focused and accelerating.
Financial results and key strategies
Last year, Walmart delivered a really good financial
performance.
Our earnings per share increased 10.6 percent to $5.02.
With the addition of $22 billion in net sales, we are now
a $466 billion company. Our operating income was up
4.7 percent to $27.8 billion. We also grew free cash flow
18.1 percent to $12.7 billion. All of this enabled our company
to return $13 billion to shareholders in dividends and share
repurchases. In fact, Walmart shareholders enjoyed the
best overall return in stock performance and dividends
for our company this year than in more than a decade.
This success was made possible by the contributions of our
2.2 million fantastic associates around the world and their
commitment to saving people money so they can live better.

When it comes to our operating segments, Walmart U.S. is as
strong as it has ever been. Last year, we opened our 4,000th
U.S. location and added more than $10 billion in net sales,
including $4.7 billion in comp sales growth. We had positive
comp performance and grew market share in a number of
our largest categories. Walmart International continues to
be the growth engine for our company, contributing nearly
30 percent of consolidated net sales, while adding 19 million
square feet of new retail space. Improving returns in Walmart
International remains a top priority. Sam’s Club continues to
drive sales, delivering more than $56 billion in net sales with
fuel, a 4.9 percent increase over last year. With membership
engagement scores at record levels, we’re continuing to focus
on driving value to our members.
Michael T. Duke
President and Chief Executive Officer
Wal-Mart Stores, Inc.
Many of Walmart’s most innovative ideas originate from the
insights of associates across our global operations.
137073_L01_NARR.indd 1 4/5/13 11:50 PM
2 || Walmart 2013 Annual Report Walmart 2013 Annual
Report || 3
At Walmart, we’re excited about the progress in our business
and have confidence in the strategies we’re executing in each
operating segment. I feel very good about the areas where
we are strategically focused, and we are prepared to acceler-
ate these efforts. We’re delivering on the productivity loop

and being even more disciplined about operating expenses
and capital spending. We’re investing to serve more customers
globally, especially in e-commerce. We’re putting a major
effort into making sure we have the best retail talent at
every level of our organization. And we’re taking our model
for making a difference and applying it in new ways to some
of society’s toughest challenges.
More often, I see customers using a mobile phone to check
the price of an item. The era of price transparency is right here,
right now and in real time. We welcome Walmart being a
showroom for online shoppers. This may surprise some people,
but because we’re really churning the productivity loop, we
have a lot of open road ahead. If we offer the right assortment,
the lowest prices and the best experience, customers choose
Walmart whenever and wherever they shop.
Walmart has now leveraged operating expenses for a third
consecutive year. In fact, every operating segment grew sales
faster than expenses. We continue to invest savings into
lower prices and improving returns. I’m pleased with the
progress we’ve made with innovations around workforce
planning, on-shelf availability and sourcing. These areas –
and many others – are key priorities for our management
teams. We’re on track to meeting our goal to reduce operating
expenses as a percentage of sales by at least 100 basis points
by fiscal 2017.
We’re also applying this same discipline to capital
expenditures.
We’ve reduced total remodeling costs for Walmart U.S.
50 percent over the past two years and are lowering construc-
tion costs around the world. Last year, we invested $12.9 billion
to add 34.6 million square feet of retail space. We’re also better
matching our systems investments to the size of the retail box

and the need of the market. Whether it’s expense leverage or
capital discipline, Walmart is accelerating the productivity loop
to drive prices even lower for our customers.
Delivering a seamless shopping experience
By bringing together best-in-class online, mobile and social
capabilities and our over 10,700 stores, we are building what
no other retailer – online or otherwise – can. We can offer
customers a truly seamless experience that empowers them
to shop in the way most convenient for them – anytime
and anywhere. Over the past year, we’ve made significant
investments in talent and technology to accelerate progress
toward this vision.
One success is our new search engine for walmart.com,
which delivers more relevant results to online shoppers and
led to increased sales conversions. We’re also testing some
great innovations, such as same-day delivery of purchases
from our U.S. website. We just expanded mobile self-checkout
through our Scan and Go™ app. Perhaps most important to
our growth plans, we’ve launched a multi-year process to
build the next generation global technology platform. By
having the ability to connect every product in the world
with every customer in the world, we’ll be able to accelerate
our expansion of e-commerce operations. Right now, we
At Sam’s Club, exciting merchandise at great values drives
strong member engagement.
Exceptional customer service is a key contributor to
Walmart Canada’s strong market position.
137073_L01_NARR.indd 2 4/5/13 11:50 PM

Report || 3
have growing online businesses in 10 countries and are well
positioned in markets that offer the greatest growth potential –
the U.S., the U.K., Brazil and China. I’m particularly
encouraged
by our increased investment in Yihaodian, which has
strengthened our ability to capitalize on the vast potential
in the Chinese e-commerce market.
Talent is key to success
To execute these and other strategies vital to our long-term
success, we must recruit, develop and retain the absolute
best talent at every level of our organization. That means
executives, managers and front-line associates that traditionally
make up the ranks of a major retailer. But we also need
entrepreneurs, technology specialists, data scientists and
consumer Internet professionals. Today, Walmart has more
than 2,500 associates with these skills in Silicon Valley, Brazil,
India and China. They are some of the most inspired and
inspiring associates anywhere in our company.
Nothing makes me prouder of Walmart than when I hear
about the opportunity we provide to our associates. It’s
amazing to think that in our Walmart U.S. business, approxi-
mately 75 percent of our store operations management
started their careers as hourly associates. I especially love
hearing from our front-line associates and talking with them
about their ideas for how we can serve our customers even
better. Our senior leadership team is the best in retail and
perhaps in all of business.
The job of every Walmart associate must begin with integrity.

Over the past year, I’ve had countless opportunities to speak
to our associates, and I’ve been very clear that ethics and
compliance are non-negotiable. Our standard is full compliance
with all laws and regulations in the markets where we operate.
We’ve made significant improvements to our compliance
programs and we’re taking appropriate action for any instance
of non-compliance. We’re pleased with the progress we’ve
made through training, new processes and procedures
and recruiting exceptionally strong talent to fill new roles.
Walmart will have a world-class compliance organization.
Benefiting our communities
Wherever I travel around the world and have the chance to
talk with a business leader or an elected official, it’s gratifying
to hear their comments about what Walmart is doing on hiring
veterans, women’s economic empowerment or environmental
sustainability. Year after year, we’ve just continued to build
momentum in how we use our size and scale in new ways to
make a difference on big issues. Last year alone, Walmart and
the Walmart Foundation’s charitable contributions surpassed
$1 billion in cash and in-kind donations to positively impact
local communities around the globe. Over the past year,
Walmart became the largest onsite solar power generator in
the United States, and the same is true for renewables. We
announced major new commitments to make our supply
chain more sustainable in China and around the world. I’m
also very excited about our recent announcement to boost
U.S. manufacturing for Walmart U.S. and Sam’s Club, to hire
100,000 honorably discharged U.S. veterans and to do more
to help our part-time associates find full-time jobs and build
careers at Walmart.
Looking ahead
Walmart is only getting stronger as the world’s healthiest
and best-positioned global retailer. I’m pleased with our

business and financial performance last year. But what gives
me the most confidence is the changing retail landscape, and
how our people and our strategies fit so well for the customers
we know and care about. Whether it’s everyday low prices, a
seamless shopping experience, the most talented team of
associates, or our model for making a difference, we are on
the right path. We will accelerate everything we’re doing.
And Walmart’s best and most exciting days remain ahead.
Michael T. Duke
Every day our talented associates deliver the operational
efficiencies that make possible Walmart’s EDLP.
137073_L01_NARR.indd 3 4/9/13 1:10 PM
4 || Walmart 2013 Annual Report
Top: Grocery accounts for 55 percent of Walmart U.S. sales.
Walmart is the nation’s largest grocer.
Middle: Focusing on basics drove apparel sales to the best
comp sales performance in 7 years.
Bottom: More than 240 Neighborhood Markets offer
groceries and a pharmacy.
Right: Supercenters offer a broad assortment to deliver
one-stop shopping.
137073_L01_NARR.indd 4 4/5/13 11:51 PM

Everyday low prices
on a broad assortment,
anytime, anywhere
In fiscal 2013, Walmart U.S. delivered a strong 1.8 percent
comp increase, or
an additional $4.7 billion in comp store sales from last year.
Net sales rose to
$274.5 billion, a 3.9 percent increase, and operating income
grew by 5.4 percent to
$21.5 billion. We are driving growth and meeting our
customers’ needs by offering
lower prices on a broad assortment of relevant merchandise.
Leveraging a winning formula. Everyday Low Price (EDLP) is
the cornerstone of our
strategy, and our price focus has never been stronger. Today’s
consumer seeks the
convenience of one-stop shopping that we offer. From grocery
and entertainment
to sporting goods and crafts, we provide the deep assortment
that our customers
appreciate. Our price investments across a broad assortment
allow us to deliver a
lower-priced market basket. Through Walmart’s localized and
national market basket
media campaigns, we show customers market by market that we
are the low price
leader on baskets of merchandise.
Fortifying our low-cost culture. Through our Everyday Low
Cost (EDLC) focus,
Walmart is constantly fueling the productivity loop by

leveraging expenses so that
we can lower prices. We work closely with suppliers to obtain
the best price for the
merchandise customers want. And, we committed to source an
additional $50 billion
of U.S. products over the next 10 years. We also drive
innovation across our supply
chain and store operations to reduce cost. Productivity
initiatives, including One-Touch
and MyGuide, help our stores manage expenses, while
continuing to provide good
customer service.
Engaged associates drive customer satisfaction. Sam Walton
used to say, “The
greatest measure of our success is how well we please the
customer, our boss.” Our
associates are dedicated to executing our core strategy of
managing expenses so we
can invest in lower prices for our customers. Associate
engagement scores are at an
all-time high. We continue to promote associates and during
fiscal 2013, we provided
a record $1.5 billion incentive payout to field associates. This
year, we began a new
commitment to hire 100,000 honorably discharged U.S. veterans
over the next five
years, which will further strengthen our associate team.
Integrated offerings between e-commerce and stores. With more
than 4,000
stores, unmatched logistical efficiency and innovative e-
commerce solutions, we
offer millions of items to about 130 million weekly shoppers,
with convenient and
flexible delivery options. To enhance our customers’

experience, we developed a
new walmart.com search engine and delivered mobile solutions
to help customers
plan their shopping trips, manage their budgets and find
merchandise more
efficiently. Walmart offers a seamless shopping experience,
both in our stores
and online, to provide customers with merchandise anytime,
anywhere.
Disciplined growth, diverse formats. We are continuing to grow
both through
comp store sales and new stores, including supercenters and
small formats. Our
enhanced focus on capital discipline allows us to reduce our
cost per square foot
on new construction, as we drive productivity into design and
construction
processes. We plan to add between 15 and 17 million square
feet of retail space
this year, representing between 220 and 240 units.
137073_L01_NARR.indd 5 4/5/13 11:51 PM
Report || 7
International
A global portfolio that
drives growth and returns
Walmart International serves more than 105 million customers
per week
in 26 countries. Our portfolio provides a balance of growth with
improved

profitability and higher returns. In fiscal 2013, International
contributed
almost 30 percent of the company’s net sales, with an increase
of
7.4 percent from the prior year to $135.2 billion. Operating
income grew
8.3 percent to $6.7 billion. We ended the year with 497 more
new stores,
totaling approximately 19 million square feet.
Disciplined growth through new stores and e-commerce. We’re
focused on disciplined investment in high potential markets, as
we
strengthen our presence in mature markets. This past year, we
moderated new
store growth in a few markets to ensure that we open highly
productive
stores through more disciplined real estate development
processes.
We’re focused on driving comparable sales growth, opening
new stores
and investing in e-commerce. Our majority stake in China’s
Yihaodian
allows us to quickly penetrate one of the world’s fastest-
growing
e-commerce markets.
Extending our EDLP advantage. The diversity of our formats
ensures
we’re relevant to our customers and we’re focused on delivering
our EDLP
advantage across formats. Most of our markets use EDLP as a
foundation,
and the remaining are in the process of deploying this strategy.
Brazil’s
conversion to EDLP is progressing well, and China is in the

early stages
of its transition. Massmart in sub-Saharan Africa is continuing
to make
progress on implementing EDLP into their stores as well.
Local relevance, world-class capability. We stay close to our
customers
in every market to understand their unique preferences. With
these insights,
our merchants and operators leverage Walmart’s global sourcing
capabilities
to provide locally relevant merchandise at the lowest prices.
Our country
and Home Office teams share best practices and drive EDLC
through
improved productivity in store operations, purchasing practices,
information technology, logistics and back office support
functions.
Deeper talent enables growth. We’re investing in our
outstanding group
of Walmart International associates. The secret to our continued
success
lies in the strength and consistency of our culture that Walmart
associates
embody every day. We recruit energetic and capable leaders. In
addition,
we focus on developing merchant capabilities through merchant
academies in all markets.
Building world-class compliance. We have built our business on
a
foundation of integrity. We’re using that foundation to create an
even
stronger, comprehensive compliance organization in every
market to

give our associates the support they need to always do the right
thing.
We hold ourselves accountable to the highest standards around
the world.
Leading on social and environmental issues. We’re a catalyst
for change
on issues that make a difference in our communities, such as
women’s
economic empowerment, sustainable agriculture and
environmental
sustainability. Through our work on energy efficiency and zero-
waste
goals, we not only benefit the environment, but also drive cost
savings.
Top: Locally relevant formats like Mexico’s Bodega
Aurrera help ensure success across our global portfolio.
Middle: Walmart Canada’s broad selection of
Canadian-sourced beef demonstrates our focus
on locally grown food.
Bottom: Attracting and developing top talent is central
to ASDA’s strategy for continued growth in the U.K.
Right: Our EDLP strategy appeals to customers from
Canada to Brazil.
137073_L01_NARR.indd 6 4/5/13 11:51 PM
Report || 7

137073_L01_NARR.indd 7 4/5/13 11:51 PM
8 || Walmart 2013 Annual Report
Delivering greater
value to members
Sam’s Club associates do a great job of delivering value to
members through exciting merchandise, price leadership and
a best-in-class shopping experience. This approach drove
solid growth in the warehouse club segment in fiscal 2013.
Net sales increased 4.9 percent over last year, to $56.4 billion,
while comp sales increased 3.9 percent. Operating income
was $2.0 billion, up 6.2 percent.
Merchandise that keeps members coming back for more.
Sam’s Club members want a merchandise assortment that
is exciting, relevant and in demand, and that’s what we
provide. Our fresh products and appealing brands drive
traffic. Advantage members manage busy schedules, so
they count on Sam’s Club for their everyday apparel and
Top: Sales of top brand apparel remain strong.
Middle: Assortment, quality and value drive membership
renewals and upgrades.
Bottom: Business members rely on Click ‘n’ Pull® to
save time.
Right: Our extensive fresh food assortment drives
traffic by offering value to both Advantage and
Business members.
137073_L01_NARR.indd 8 4/9/13 1:10 PM

home needs, as well as grocery staples. Our health and
wellness offerings, including diet and nutrition products
and pharmacy services, have seen strong growth. The
quality and value of our bulk sizes resonate with our
business members, who look to Sam’s Club to replenish
their convenience stores, restaurants, cleaning services and
other small businesses. This value proposition has never
been more critical, as challenging economic conditions
pressure their budgets.
Price leadership drives traffic and ticket. Our role at
Sam’s Club is to support our members by creating value
for them through price investments across the club. We’re
driving operating efficiencies, such as refining workforce
scheduling to more closely align with member traffic
patterns. Productivity measures enable us to expand
strategic price investments on key traffic-driving items –
further strengthening members’ long-term loyalty.
Innovations that enhance the shopping experience.
We invest in technology to help members shop smarter
at Sam’s Club. We’re strengthening in-club efficiency by
expanding self-checkouts to all clubs by year-end and by
introducing convertible cash registers that make registers
available for members at all times. In addition, we’re
leveraging the wi-fi capabilities in our clubs to provide new
mobile options. Site visits to samsclub.com strengthen our
integration of e-commerce and the club, while enhancing
the experience overall.
Sharpening our focus to deliver even greater value.

In fiscal 2014, we’ll continue to grow, with plans to open
8 to 12 new clubs, while relocating or expanding 7 to 8 more.
We’re expanding the price investments that we started late
in fiscal 2013. And, we’re evaluating a new membership
benefit program that simplifies a member’s fee structure
and provides instant savings to drive membership … all
in an effort to deliver even greater value to our members.
137073_L01_NARR.indd 9 4/9/13 1:10 PM
Report || 11
Top: Our mobile apps make shopping fun for
customers – and more convenient than ever.
Bottom: ASDA offers convenient apps for
shopping and delivery of groceries and
general merchandise.
Right: Free shipping is available on thousands
of items through Site to Store.
Global eCommerce
Delivering seamless access to customers –
anytime, anywhere
The world’s e-commerce market continues to expand rapidly,
and
Walmart is investing to serve customers and to gain share of
this
huge opportunity. Our e-commerce business unites and expands
the Walmart customer experience. We are building best-in-class
capabilities in online, mobile and social that, when combined
with

our 10,700 stores and approximately 245 million weekly
shoppers,
allow us to do what no one else can – offer customers seamless
access to the products they want anytime, anywhere.
We have clear objectives to drive e-commerce growth –
excelling at
the fundamentals, innovating in more ways, winning in key
markets
and uniting and expanding the Walmart shopping experience.
Excelling at the fundamentals. We aim to:
• provide more personalized and relevant shopping options;
• offer a broad product assortment;
• provide the best possible shopping experience online, through
mobile and in our stores; and
• deliver merchandise at the lowest possible cost to customers
when and where they want it.
We’re driving increased sales by building world class e-
commerce
technologies, such as the upgraded search engine for
walmart.com
which is enabled by the new global technology platform that
we are now beginning to deploy.
Innovating in more ways. We’re leading in Big Data, social and
mobile. We use Big Data to optimize our fulfillment networks,
to create powerful pricing tools and to build the right product
assortment. Signals from social media help us gain insights on
customer trends. Mobile transforms the retail experience by
bringing together online and stores – putting power directly in
the customers’ hands. New mobile apps assist customers with

navigating our stores, making it even easier to find specific
products.
We continue to expand the test of our mobile self-checkout app
called Scan and Go.
Winning in key markets. We have e-commerce sites in 10
countries and are investing aggressively in markets that
represent
the greatest growth opportunities – U.S., U.K., Brazil and
China.
Uniting and expanding the Walmart shopping experience.
By leveraging our stores and clubs, our logistics network and
our
supplier relationships, Global eCommerce enhances the in-store
experience and provides e-commerce options that take
Walmart to more consumers around the world.
137073_L01_NARR.indd 10 4/9/13 1:10 PM
Report || 11
Global
Responsibility
Helping our customers and
communities live better
As the world’s largest retailer, we have the ability and the
responsibility to
make a difference on issues our customers, communities and
associates
care about … to help people live better. We focus our
leadership on
three key areas: social responsibility, environmental

responsibility and
associate opportunity.
Social responsibility. Through charitable contributions, skills
training
and global sourcing initiatives, we’re improving the lives of so
many
others. Walmart and the Walmart Foundation’s charitable
contributions
surpassed $1 billion in cash and in-kind donations last year to
address
needs of local communities globally. We continue to strengthen
our
women’s economic empowerment initiatives through a variety
of
programs. Last year, for example, more than 73,000 low -income
women
around the world received job skills training, access to markets
and
career opportunities. With our healthier foods initiative, we’re
helping
customers easily identify healthier food options. And for
manufacturers,
we’re enhancing auditing, training and education, and
stakeholder collab-
oration to reinforce our commitment to safe working
environments in our
global supply chain.
Environmental responsibility. We’re focused on responsible
energy
consumption globally and now obtain approximately 21 percent
of our
electricity from renewable sources. Walmart has the most onsite
solar
capacity of any business in the U.S., according to the EPA. Our

goal remains
“zero waste” and, to reach it, we’re rethinking processes, using
smarter
packaging, recycling and reducing plastic bag use. In addition,
we’re
applying and scaling the Sustainability Index – a tool to
measure and
drive the sustainability qualities of products. As part of this
global effort,
Walmart committed to buying 70 percent of the goods sold in
U.S. stores
and clubs only from suppliers who use the Index by the end of
2017.
Associate opportunity. Our founder, Sam Walton, fostered a
unique
corporate culture, dedicated to a belief in limitless opportunity
for
Walmart associates. Our global workforce reflects the rich
diversity of
the communities we serve. In addition, Walmart U.S. has
committed to
hire a projected 100,000 honorably discharged U.S. veterans
over the
next five years and to increase opportunities for part-time
associates
to advance to full-time careers. Our leadership development
programs
resulted in meaningful increases in women and minority
promotions
from hourly to management assignments.
To learn more about Walmart’s responsibility initiatives to help
people
live better, access our 2013 Global Responsibility Report (GRR)
at

corporate.walmart.com. The Global Reporting Initiative (GRI)
collaborates
with many stakeholders for its framework on sustainability
reporting.
This approach is now incorporated into Walmart’s 2013 GRR.
Top: Walmart empowers consumers to select healthier food
options, as we lower prices on fresh fruit and vegetables.
Middle: Solar power plays a leading role in Walmart’s
efforts to increase the use of renewable energy resources.
Bottom: Associates have the opportunity to build long-term
careers with Walmart.
137073_L01_NARR.indd 11 4/5/13 11:52 PM
Report || 13
Strong corporate governance
guides our decisions
Walmart has one of the highest quality public company board of
directors. We are guided by strong governance principles and
are
rooted in our service to shareholders, as well as in making
decisions
that strengthen our ability to serve customers.
One of our most important priorities is
compliance and Walmart is implementing
a stronger global compliance organization.
Our …

Associate
career opportunities
Walmart de Mexico promoted
more than 22,700 associates
in fiscal 2014.
Putting low prices within reach
We serve customers around the globe
more than 250 million times each week.
Affordable, healthier food
In FY 2014, we opened 96 new stores
in America’s food deserts, with 224
opened since our initiative began.
Meeting community needs
around the world
Last year, Walmart and the Walmart Foundation
gave more than $1 billion in cash and in-kind
gifts to charitable organizations.
Toward
a more
sustainable
tomorrow
Today, 24% of
our electricity
comes from

renewable sources.
Wal-Mart Stores, Inc. (NYSE: WMT)
702 S.W. 8th Street | Bentonville, Arkansas 72716 USA |
479-273-4000 | walmart.com
So many ways to
Save money.
Live better.
2014 Annual Report
2014 A
n
n
u
al Rep
o
rt
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Walmart 2014 Annual Report 24 Walmart 2014 Annual Report
So many opportunities for
associates to serve customers
190,000
U.S. store/club associates
promoted in fi scal 2014

2.2M
dedicated
associates
globally
300K*
associates
have 10+ years
of service
Based on survey results
from more than 2 million
associates worldwide,
approximately
4 of 5
are proud to work
for Walmart.
*Represents Walmart U.S. data only.
The minimized environmental footprint of this report is the
result of an extensive, collaborative effort of Walmart and our
supply chain
partners. The environmental and social impact continues to be
an important consideration. It is printed on paper from well -
managed
forests containing recycled PCW fiber that is Elementally
Chlorine Free (ECF). It is printed using 100 percent renewable
wind power
(RECs), along with environmental manufacturing principles that
were utilized in the printing process. These practices include

environ-
mentally responsible procurement, lean manufacturing, green
chemistry principles, the recycling of residual materials and
reduced
volatile organic compound inks and coatings.
Our sustainable, next-generation report.
5.11 acre
of forestland preserved
via managed forestry
983 fewer
trees consumed
via recycling
129,537 kWh
less energy – the same
used by 5 homes for a year
472 metric tons
of greenhouse gas offset –
the equivalent of taking 94
cars off the road for a year
46,835 kWh
converted to clean renewable
sources (printing plant
using RECs)
459,333 fewer
gallons of water

consumed
Savings baselines were developed using the national averages of
similar
coated papers and printing practices by EarthColor Printing.
FSC® is not
responsible for any calculations on saving resources by
choosing this paper.
Walmart’s Global Responsibility
Report highlights helping
communities live better.
Learn more about our workplace, social, environmental,
sourcing and compliance initiatives by reading our
Global Responsibility Report at corporate.walmart.com/
microsites/global-responsibility-report-2014
Walmart’s investor relations app is
our company at your fi ngertips.
Walmart’s IR app gives shareholders anytime and anywhere
access to financial and company news from their mobile
devices.
Find presentations, quarterly results, virtual store tours, a
global
footprint map and the stock price on your iPad, iPhone or
Android
device. Download the free app from iTunes or Google Play.
Walmart’s enhanced digital annual
report has expanded content.
We’re driving innovation and sustainability – and reducing
costs – with our enhanced digital annual report. Visit
www.stock.walmart.com to hear directly from our leaders,
associates and customers. Also, visit this website to enroll
to receive future materials electronically for our Annual

Shareholders’ Meetings.
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NT
ED USIN
G
1
0
0%
W
IND EN
ER
G
Y
Supplied by Community Energy
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8:48 PM4/9/14 8:48 PM
Walmart 2014 Annual Report 1

100K
honorably
discharged U.S.
veterans expected
to be hired by
Walmart U.S.
and Sam’s Club
by 2018
57%
of our
International
associates
are women
*Represents Walmart U.S. data only.
Approximately
75%*
of store management
joined Walmart as
hourly associates
Delivering
for customers
and shareholders

Our Global eCommerce footprint spans
10 countries, creating digital access
and physical distribution points for our
customers worldwide.
$68B*
returned to shareholders
through dividends and
share repurchases
12%*
total shareholder
returns (CAGR)
30%*
earnings per share
growth
33M
approximate retail
square footage added
in fiscal 2014
$68B*
net sales growth over
the past five years
250M
customers served
weekly in our stores
in 27 countries
*Data reflects five-year period including fiscal 2010 through
2014.

To our
shareholders,
associates and
customers:
I’m deeply honored to lead Walmart at such an exciting time.
Walmart has a rich history and is well-positioned for the future.
We have an authentic and important purpose. We’re grounded
with strong values and have millions of associates who share a
culture and belief in doing what is right for our customers, our
communities and each other. The future will bring a lot of
change as the rapid growth of digital commerce enables us
to serve customers in new and exciting ways. Our customers
continue to search for value, a broad assortment and a
shopping experience that saves them time and money. With
greater convergence of digital and physical retail, we’re invest-
ing in capabilities to provide customers even more choice
and convenience. When I think about all these capabilities,
I’m confident in Walmart’s continued growth and enthusiastic
about our future.
Positioning to serve our customers. Around the world,
we deliver value for customers in different ways. We operate
supercenters, Sam’s Clubs, e-commerce sites and many other
formats that enable us to serve our customers. As we develop
the
combination of digital and physical interaction with customers,
we’ll remain well positioned to grow. We’re laser-focused on
delivering improved comparable store sales by sharpening our
merchandising efforts, price leadership and enhancing service.
We’re also intent on creating transformative growth by adding
capabilities in e-commerce and mobile commerce. When we
view our business through the eyes of our customers, we don’t
think about our stores, clubs or websites independently. Instead,
our goal is to have customers see these channels converge as
one unified relationship with us. We want to deliver a relevant,

personalized and seamless experience across all channels.
So, our approach to investments will continue to evolve
to support the singular goal of enhancing the customer
experience to further grow sales.
Change is nothing new for Walmart – it’s embedded in our
DNA.
After all, our company founder, Sam Walton, was the premier
innovator in retail. He made Walmart better by questioning
everything, every day – frequently asking customers and our
store associates how we could do better. He was always in the
market looking for new ideas. For Sam, the customer was
always
the boss, and the improvements he made to Walmart were
Doug McMillon
President and
Chief Executive Officer
customer-driven. I intend to lead Walmart with this same
customer-centric focus. Today, in addition to listening to
our customers, we apply data and technology to this task.
The millions of customer interactions that take place each
week give us some of the world’s most robust data to analyze
and leverage to improve our service. For example, customer
insights led the Walmart U.S. team to expand our Black Friday
1-Hour Guarantee program this past year, and innovative
systems enabled successful execution and on-time product
delivery. The tools today may be different than the ones Sam
employed, but the imperative that will guide our transforma-
tional initiatives is the same – to connect more effectively

with customers.
Walmart is well-positioned for the future partially due to our
unique assets. We have more than 10,900 physical points of
distribution globally. No other retailer possesses such an
extensive footprint. And, with our retail websites around the
world, we’re doing more to leverage these physical assets to
expand the intersection with digital retail. Last year, we grew
e-commerce sales in Brazil and China at nearly twice the
market rate. Asda’s Click and Collect program has been very
successful, and Mexico is expanding grocery delivery beyond
our Superama grocery stores to supercenters this year. We’re
leveraging best practices to further test grocery delivery
and customer pickup in the U.S. We’ve also broadened our
e-commerce merchandise assortment. Last year, for example,
we more than doubled walmart.com’s merchandise offerings
in the U.S. to over 5 million SKUs, and our sites in Brazil and
China greatly expanded their assortments as well.
We invest in price to bring everyday low prices (EDLP) to
more customers around the world. EDLP earns trust with
customers because we’re driven to keep our cost structure
low. That commitment to price is central to our brand –
regardless of the format.
We’re also giving customers greater access to the value we
offer through different formats. In the U.S., our Neighborhood
Markets offer fresh foods, pharmacy and fuel, and delivered
healthy comp sales growth in fiscal 2014. This year, we’ll
significantly accelerate their rollout to complement our
core supercenter fleet. And, in Mexico and the U.K., we’ll
open more small stores to deliver convenience, assortment
and low prices.
Expanding opportunities for associates. One of the
most exciting things about serving more customers in new

ways is the opportunity to create good jobs, attract new talent
and expand current associates’ possibilities to build careers.
Last year, we hired 776,000 new associates to jobs across
our operations. The path of my own career attests to the
exceptional opportunity at Walmart to advance professionally.
In fact, we promoted about 190,000 U.S. store and club
associates last year to jobs with more responsibility and
higher pay. And, we’ll continue to invest in training and
development because building the best team in retail is
central to our strategy.
Driving operational excellence. We remain focused on
driving the productivity loop to leverage operating expenses.
The most important way to deliver against this objective is to
increase sales. By operating and buying for less, we’re able to
lower prices that, in turn, prompt customers to make more
purchases. We also foster an environment that leverages best
practices across the enterprise to drive process improvements.
Operational excellence requires capital discipline and
efficiency,
and our real estate and construction teams have made great
progress in lowering the cost of new stores and remodels.
Our focus on capital efficiency also is top of mind with our
e-commerce capabilities. We’re more disciplined now in
allocating capital to the right markets, the right formats
and the right digital capabilities.
Earning trust in communities. I’m proud of the value
we add in the communities we serve and I know we will find
new ways to contribute. We are deeply committed to com-
pliance and social, environmental and local responsibility.
Operating with integrity is a cornerstone for building trust.
We have made tremendous progress toward our goal of
developing a world-class compliance organization and this
will continue to be a top priority going forward. Our training
and leadership development programs reinforce the mission

of upholding the highest standards of integrity, not just in
retail, but in all of business. We’ll also continue to lead on key
Read Walmart’s 2014 Global
Responsibility Report at
stock.walmart.com to learn
more about our workplace,
social, environmental,
sourcing and compliance
initiatives.
issues like women’s economic empowerment, healthier foods
and renewable energy. Walmart’s initiatives, in partnership with
many suppliers, have significantly increased sustainability
throughout the global supply chain, and we will do even more.
Solid performance in a challenging environment.
In fiscal 2014, consolidated net sales increased $7.5 billion to
more than $473 billion and diluted earnings per share from
continuing operations were $4.85. While we certainly see areas
where we can improve, it’s also a reality that we faced some
challenging consumer environments around the world. Both
developed and developing markets grew slower than most
people would have hoped for. The value we offer enabled us
to grow share almost everywhere, and we’re optimistic that
conditions will moderately improve this year.
Walmart U.S. delivered solid profit growth. Operating income
grew 4 percent on a net sales increase of $5 billion. The U.S.
team did a great job controlling costs and successfully lever-
aged expenses. Walmart International’s net sales increased
1.3 percent to more than $136 billion. We took important steps

to hone our international portfolio and focus investments on
the most profitable opportunities to position the business for
future growth. Sam’s Club continued to expand its footprint,
opening 12 new clubs, and enhanced its merchandise offerings
with a sharpened focus around value, quality and exciting
merchandise. Our members saw the value of membership,
and with the fee increase in May, Sam’s Club membership
income continued to grow.
Each operating segment strengthened its e-commerce
platforms, and customers responded, driving annual Global
eCommerce sales, including acquisitions, above the $10-billion
mark, a 30 percent increase. A strong focus on e-commerce
is now fully embedded within each of our businesses and
we’ll increase our investment as e-commerce opportunities
present themselves.
Embracing the challenge to change. After just a few
months into my new role, I have an even deeper appreciation
for Mike Duke’s extraordinary contributions as CEO over the
past 5 years. His work positioned Walmart for long-term
success,
and I am one of the many associates who benefitted from his
guidance and leadership. His passion for our business and
drive for continuous improvement greatly benefitted Walmart’s
associates, customers and shareholders.
I look to the future confident that Walmart has all the
ingredients
necessary to prosper in the new retail world that is unfolding.
Our purpose remains clear – to save people money so they
can live better – and the actions we’re taking will expand the
opportunities to fulfill that purpose. We’ll analyze and review
everything Walmart is today, and we’ll be willing to change
whatever is necessary to serve customers better than ever.

I first started working for Walmart 30 years ago when I was a
teenager. I’ve fallen in love with our company, its people, our
purpose and culture. We have a unique culture grounded on
four basic beliefs: service to our customers, respect for the
individual, striving for excellence and acting with integrity.
As CEO, I want to continue to nourish and strengthen these
foundational beliefs. And, I’m excited to increase the pace of
change to ensure we’re serving the customers the way they
want to be served in the future.
Sincerely,
Doug McMillon
Top left: We’ll purchase an additional $250B
of U.S.-made products over the next 10 years.
Top right: Produce, backed by our money-back
guarantee, has the quality and value customers trust.
Middle right: We’re bringing new, innovative grocery
products to our broad assortment.
Bottom right: Customers appreciate the convenient
access to pharmacy, fresh foods, fuel and e-com-
merce pickup at our Walmart Express pilot stores.
Bottom left: In fiscal 2015, we expect to add about
200 new Neighborhood Markets to our portfolio.

Nearly
140 million
customers served
each week
Serving customers and
delivering savings every day
In fiscal 2014, Walmart U.S. attracted nearly 140 million
weekly shoppers to our stores
and delivered net sales of more than $279 billion, an increase of
$5 billion, or 1.8 percent,
from last year. Our focus on cost discipline helped drive 4
percent operating income
growth, more than twice the rate of sales, despite a 0.6 percent
decline in comp sales.
Focused on customer needs. Customers choose Walmart for our
broad assortment,
including national brands and locally relevant merchandise, at
everyday low prices (EDLP).
It’s our winning formula and results in continued market share
gains in key categories,
such as food, consumables, over-the-counter and apparel. With
our merchant mindset,
we partner with suppliers to increase product innovation and
bring exciting new brands
to our stores, such as Russell, Avia and Calphalon. We also
work hard to improve quality
and execution, making great strides in areas such as produce
and meat. And, our price
investments are driving sales by providing a lower-priced
basket relative to the market

and building customers’ trust in our EDLP promise.
In order to invest in price, we focus on everyday low cost
(EDLC). Advancements in
logistics and store operations continue to reduce costs and
improve productivity. For
instance, optimized transportation routes and distribution center
mechanization are
driving supply chain efficiencies. Greater flexibility at the store
front-end, such as self-
checkouts, is helping productivity and resonating with our
customers. We believe we
can drive cost savings by sourcing closer to the point of
consumption. We made bold
commitments to increase purchases of U.S.-made products by an
additional $250 billion
over the next 10 years.
Our 1.2 million associates are essential to a customer-centric
experience. Advancement
opportunities abound for Walmart associates who are passionate
about serving customers.
Last year, we promoted over 170,000 associates and
experienced more part-time associates
accepting full-time roles, building long-term careers with
Walmart. We also added over
30,000 honorably discharged veterans to our team. We’re
strengthening career develop-
ment pathways by expanding training to foster continued, strong
associate engagement.
Positioned to win at the convergence of digital and physical.
Walmart is redefining
the next generation of retail growth and is the best-positioned
retailer to win at the
convergence of digital and physical retail. In fiscal 2015, we’ll

continue to grow our
multi-format portfolio. Our core supercenter fleet serves the
stock-up trip and accounts for
the majority of our market share leadership. We’re accelerating
the rollout of Neighborhood
Markets to serve the quick-trip needs. And, our expanded pilot
of Walmart Express focuses
on the rural quick-trip. Neighborhood Markets and Express
deliver convenience and
customer access to fresh foods, pharmacy and fuel. Overall,
we’ll add between 21 and
23 million retail square feet, representing between 385 and 415
units in fiscal 2015.
We’ll also connect Walmart’s physical assets to the broad
assortment that is available
through nearby stores and online, delivering anytime access to
our brand. We’re testing
grocery delivery in several markets and also piloting an easy
pickup option for online
grocery and general merchandise. Innovations such as these
expand our reach to more
customers on their terms.
“ We’re offering
customers con-
venient digital and
physical access to
Walmart’s broad
merchandise
assortment and
investing in price
leadership to
provide even

greater value.”
Bill Simon
President and CEO
Walmart U.S.
Positioning our portfolio for
continued growth
In fiscal 2014, Walmart International’s net sales, excluding the
impact of currency exchange
rate fluctuations and acquisitions, increased 4.6 percent to
$140.9 billion. We added
12.5 million square feet and 324 stores, bringing our total
portfolio to more than
6,100 stores. We also grew or maintained market share in most
countries, despite a
challenging macroeconomic environment where household
incomes were stretched
and competition remained high.
Targeting the most promising opportunities. International will
continue to be a
growth vehicle for Walmart. We’re focused on driving comp
sales in all markets and
investing in relevant formats and channels, including e-
commerce and mobile. During
the year, we took steps to strengthen our position in Brazil,
Chile, China and Mexico
and expect these actions to help us deliver our financial
priorities.
We’re excited about opportunities for growth in e-commerce.
Our investments in
infrastructure and talent are accelerating International’s digital

expansion and providing
options for customers with diverse shopping habits. For
example, Asda’s rapidly growing
online grocery business exemplifies the physical-digital
convergence, creating a customer
experience that only Walmart can deliver. Brazil e-commerce
sales grew at nearly twice
the market rate last year, and Yihaodian is one of China’s
fastest-growing e-commerce
sites, offering customers both grocery and general merchandise.
In addition, we’re
increasing our investments in Mexico and Canada to drive
growth.
Customers around the world still want and need value. We’ll
deliver EDLP for them by
continuing to invest in price. EDLP builds trust with customers
while saving them money,
whether it’s “Worry Free” pricing in China or the “Asda Price
Guarantee” in the U.K. Our
objective is to fund this investment by being the lowest-cost
operator in every market.
We continue to expand our capabilities to buy, operate and sell
for less. In partnership
with our global leverage teams, we’re driving innovative
technology and process
improvements, all with a lens on greater customer relevance.
Taking corporate responsibility to a higher level. At the core of
International are
the outstanding associates, who are dedicated to serving our
customers. We continue
to recruit some of the best global talent in retail to complement
our current teams, and
we’re investing in training and development of current
associates. For example, in the

last year, we ramped up our efforts with the merchant leadership
academy to provide
advanced training in merchandising strategy and execution.
As a global company, we have responsibilities to the countries
in which we operate,
and we earn trust through our commitment to compliance, social
and environmental
issues. We remain vigilant in our focus to have the most
compliant processes and
capabilities, to support charities and to lead on environmental
sustainability to improve
the communities that we serve.
International
8 Walmart 2014 Annual Report
“ To drive sales and
build long-term
value, we’re
focused on price
leadership and
operational
excellence while
investing in the
formats and
channels that
customers want.”
David Cheesewright
President and CEO
Walmart International

Top left: Our EDLP strategy in Canada, supported by
Rollbacks, provides one-stop shopping at great values.
Top right: Bodega Express provides Mexican customers
with convenient access to Walmart.
Middle right: We expect to continue our growth in
China by opening 110 additional facilities by 2016.
Bottom right: Supercenters in Mexico provide a broad
assortment with local relevance at everyday low prices.
Bottom left: Asda customers enjoy the quality of
George apparel. Overall, Asda will invest £1.25 billion in
price and quality over the next 5 years.
More than
6,100
retail units
operated in
26
countries
1.6 million
demos in
630 clubs
last year
Top left: Members appreciate our merchandise
transformation focused on price, bulk, quality

and excitement.
Top right: Sam’s Club helps business members supply
their needs in restaurants, convenience stores, and others.
Middle top right: Initiatives to promote the health
and wellness of members is a key priority.
Middle bottom right: Sales of traffic-driving categories,
such as fresh produce, saw strong growth in fiscal 2014.
Bottom right: The Instant Savings Books add further
value to a membership.
Bottom left: We’ve expanded self checkouts,
increasing convenience for our Savings, Plus and
business members.
Rosalind Brewer
President and CEO
Sam’s Club
“ We’re focused
on creating even
more value for
our members,
through great
merchandise
at exceptional
values. Our new
membership
enhancements

will make a Sam’s
Club membership
more rewarding
than ever. “
Offering unique merchandise
at exceptional values
In fiscal 2014, Sam’s Club delivered greater value to members,
opened new clubs and
improved the ability to shop anytime, anywhere through e-
commerce and mobile
initiatives. Net sales increased 1.3 percent to $57.2 billion and
operating income was
$2.0 billion. Excluding the 30 basis point fuel impact, comp
sales increased 0.7 percent.
Membership income was the strongest it’s been in many years,
growing 5.9 percent,
primarily due to the fee increase implemented in May.
More new ways to excite our members. The initial steps of our
merchandise
transformation are energizing members to buy. We boost
member traffic by offering
exciting new merchandise, including quality national brands, at
exceptional values. We
had great success in home and apparel and plan to continue
rolling out even more new
merchandise across our clubs. Our highly engaged associates
drive member excitement
by providing great service that enhances the membership
experience.
A seamless multi-channel offering creates an integrated member
experience. Improved
e-commerce and mobile platforms strengthen conversions,
particularly in mobile trans-

actions. We’re fully integrating our samsclub.com team with
Walmart Global eCommerce
to strengthen digital capabilities and support continued sales
growth.
We’re also focused on member relevance by leveraging Big
Data to better understand our
members’ needs. These insights increase efficiency and
productivity in our clubs. Data
helps us predict whether a mom is planning family meals or an
entrepreneur is launching
a new business and enables personalized interactions that make
their membership
experience more rewarding.
Sam’s Club opened 20 new, relocated or expanded clubs in
fiscal 2014, the largest number
of openings in several years. We invested in membership
acquisition to build a critical mass
in our new club openings, including the use of social media
marketing. In fiscal 2015, we
plan to open between 17 and 22 new, relocated or expanded
units.
Making membership more rewarding than ever. We’re using
Instant Savings Books
(ISB) as an important tool to demonstrate price leadership. We
discount top-selling brands,
popular items and new products throughout the club and online
to provide greater
value. Offered several times throughout the year, ISBs also
drive member awareness
to categories they might not typically shop.
This summer, we’ll launch two new membership enhancements.
First, we’ll roll out

cash rewards nationally, providing an opportunity to reward our
best members, grow
membership income and drive loyalty. Second, we’ll introduce a
new cash-back credit
card offering. Both enhancements will provide significant value
to our members, making
a membership with Sam’s Club more rewarding than ever.
12 Walmart 2014 Annual Report
Accelerating growth through
e-commerce integration
In China, Yihaodian’s new,
more intuitive mobile app
has helped expand mobile
transactions eightfold in
one year.
In the U.S., walmart.com customers
enjoy an expanded online assortment
of more than 5 million SKUs and
convenient delivery options to their
home or through Site to Store.
We’re investing in new fulfillment centers
to provide faster delivery in the U.S., U.K.
and Brazil.
13 Walmart 2014 Annual Report Walmart 2014 Annual Report

13
Walmart To Go, now in
test in the U.S., leverages
best practices from our
successful Asda grocery
delivery business in the U.K.
Traffic on Sam’s Club’s
mobile platform nearly
doubled in the last year.
After a threefold increase in
site traffic, walmart.com in
Brazil consistently ranks as the
#1 or #2 most visited retail site.
“ Best in class e-commerce,
plus the assets of the world’s
largest retailer, allow Walmart
to do for customers what no
one else can.”
Neil Ashe,
President and CEO,
Global eCommerce
Walmart’s …
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
___________________________________________
FORM 10-K
___________________________________________
Securities Exchange Act of 1934
for the fiscal year ended January 31, 2014, or
¨ Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 1-6991.
___________________________________________
WAL-MART STORES, INC.
(Exact name of registrant as specified in its charter)
___________________________________________
Delaware 71-0415188
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
702 S.W. 8th Street
Bentonville, Arkansas 72716
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (479) 273-
4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, par value $0.10 per share New York Stock
Exchange
Securities registered pursuant to Section 12(g) of the Act: None
___________________________________________
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Exchange
Act.
Yes ̈ No
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements
for at least the past 90 days.
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to

be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the
registrant was required to submit and post such files).
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form
10-
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or
a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange
Act.
Non-Accelerated Filer o Smaller Reporting Company o
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes ̈ No
As of July 31, 2013, the aggregate market value of the voting
common stock of the registrant held by non-affiliates of the
registrant, based on the closing sale
price of those shares on the New York Stock Exchange reported
on July 31, 2013, was $124,752,718,081. For the purposes of
this disclosure only, the
registrant has assumed that its directors, executive officers (as
defined in Rule 3b-7 under the Exchange Act) and the beneficial
owners of 5% or more of the

registrant's outstanding common stock are the affiliates of the
registrant.
The registrant had 3,229,175,401 shares of common stock
outstanding as of March 18, 2014.
DOCUMENTS INCORPORATED BY REFERENCE
Document Parts Into Which Incorporated
Portions of the registrant's Annual Report to Shareholders for
the Fiscal Year
Ended January 31, 2014 (the "Annual Report to Shareholders")
included as
Exhibit 13 to this Form 10-K
Parts I and II
Portions of the registrant's Proxy Statement for the Annual
Meeting of
Shareholders to be held June 6, 2014 (the "Proxy Statement")
Part III
2
CAUTIONARY STATEMENT REGARDING FORWARD-
LOOKING STATEMENTS AND INFORMATION
This Annual Report on Form 10-K, the other reports,
statements, and information that Wal-Mart Stores, Inc. (which
individually or together with its
subsidiaries, as the context otherwise requires, is hereinafter
referred to as "we," "Walmart" or the "Company") has

previously filed with or furnished to, or
that we may subsequently file with or furnish to, the Securities
and Exchange Commission ("SEC") and public announcements
that we have previously made
or may subsequently make include, may include, or may
incorporate by reference certain statements that may be deemed
to be "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995, as amended, and that are intended to enjoy the
protection of the safe harbor for
forward-looking statements provided by that Act.
The forward-looking statements included or incorporated by
reference in this Annual Report on Form 10-K and that are or
may be included or incorporated by
reference in those reports, statements, information and
announcements address our future economic performance,
activities, events or developments that we
expect or anticipate will or may occur in the future, including or
relating, but not limited to, our expected results of operations
and our forecasts of certain
financial results for certain periods, including our sales, the net
sales of one or more of our operating segments, our expenses in
various categories, our
earnings per share for certain periods, our comparable store
sales or comparable club sales of one of our operating segments
or operations in a particular
country for a period, our effective annual tax rate, the amount,
nature and allocation of future capital expenditures, dividends,
capital structure and opening of
certain numbers of additional stores and clubs in the United
States and additional units in the other countries in which we
operate, our forecasts for the
increase in square footage in our various operating segments
and in countries in which we operate, the consummation of the
acquisition of assets or operations,

conversion of discount stores into supercenters, relocations of
existing units, remodeling of or special projects at existing
units, expansion and other
development trends of the retail industry, our plans for
integrating newly acquired operations into our existing
operations, our business strategy, our business
plans, our pricing strategy, our cost of goods, our inventory
levels, the anticipated success of various operating initiatives,
our plans for increasing our market
share, our financing strategy, expansion and growth of our
business, changes in our operations, including the mix of
products sold, changes in expected sales
of certain categories of products, our plans for leveraging best
practices, lessons from multiple formats and global sourcing
practices, our liquidity and plans
for accessing the capital markets, our need to repatriate cash
held offshore of the United States, the outcome of litigation and
other legal proceedings to which
we are subject and the costs we may incur in connection
therewith, and other similar matters and the assumptions
underlying or relating to any such
statement. Such forward-looking statements include statements
made in Part I, Item 3. "Legal Proceedings" in this Annual
Report on Form 10-K as to our belief
that the possible loss or range of any possible loss that may be
incurred in connection with certain legal proceedings will not
be material to our financial
condition, results of operations, or liquidity. Forward-looking
statements are often identified by the use of words or phrases
such as "anticipate," "believe,"
"could occur," "could result," "continue," "estimate," "expect,"
"forecast," "guidance," "plan," "projected," "projections," "will
be," "will continue," "will
change," "will decrease," "will have," "will increase," and "will
remain," or words or other phrases commencing with the word
"will," or words or phrases

that are variations of or that use such words or phrases and
other similar words and phrases that denote anticipated or
expected occurrences or results.
Our business operations are subject to numerous risks, factors
and uncertainties, domestically and internationally, which are
outside our control. Any one, or
a combination, of these risks, factors and uncertainties could
materially affect our financial performance, our results of
operations, including our sales,
earnings per share or comparable store sales or comparable club
sales and effective tax rate for any period, our business
operations, business strategy, plans,
goals or objectives. These factors include, but are not limited
to: general economic conditions, including changes in the
economy of the United States or other
specific markets in which we operate, economic instability,
changes in the monetary policies of the United States, the Board
of Governors of the Federal
Reserve System, other governments or central banks, economic
crises and disruptions in the financial markets, including as a
result of sovereign debt crises,
governmental budget deficits, unemployment and partial
employment levels, employment conditions within our markets,
credit availability to consumers and
businesses, levels of consumer disposable income, consumer
confidence, consumer credit availability, consumer spending
patterns, consumer debt levels,
consumer preferences, including consumer demand for the
merchandise we offer for sale, the timing of consumers' receipt
of tax refund checks, changes in the
amount of payments made under the Supplement Nutrition
Assistance Plan and other public assistance plans, changes in
the eligibility requirements of public
assistance plans, inflation, deflation, commodity prices, the cost
of the goods we sell, competitive pressures, the seasonality of

our business, seasonal buying
patterns in the United States and our other markets, anticipated
store or club closures, labor costs, transportation costs, the cost
of diesel fuel, gasoline,
natural gas and electricity, the selling prices of fuel, the cost of
healthcare and other benefits, accident costs, our casualty and
other insurance costs,
information security costs, the cost of construction materials,
availability and the cost of acceptable building sites for new
stores, clubs and other units,
availability of qualified labor pools in the specific markets in
which we operate, including the availability of persons with the
skills and abilities necessary to
meet Walmart's needs for managing and staffing its new units
and conducting their operations, real estate, zoning, land use
and other laws, ordinances, legal
restrictions and initiatives that may prevent Walmart from
building, or that impose limitations on Walmart's ability to
build, new units in certain locations or
relocate or expand existing units, availability of necessary
utilities for new units, availability of skilled labor and labor,
material and other construction costs
in areas in which new or relocated units are proposed to be
constructed or existing units are proposed to be expanded or
remodeled, competitive pressures and
the initiatives of our competitors, accident-related costs,
weather conditions patterns and events, climate change,
catastrophic events and natural disasters, as
well as storm
3
and other damage to our stores, clubs, distribution centers and
other facilities and store closings and other limitations on our

customers' access to our stores
and clubs resulting from such events and disasters, disruption in
the availability of our online shopping sites on the internet,
cyberattacks on our information
systems, disruption in our supply chain, including availability
and transport of goods from domestic and foreign suppliers,
trade restrictions, changes in
tariff and freight rates, adoption of or changes in tax, labor and
other laws and regulations that affect our business, including
changes in corporate and
personal tax rates and the imposition of new taxes and
surcharges, costs of compliance with laws and regulations, the
mix of our earnings from our United
States and foreign operations, changes in our assessment of
certain tax contingencies, increases or decreases in valuation
allowances, outcome of
administrative audits, the impact of discrete items on our
effective tax rate, the resolution of other tax matters,
developments in and the outcome of legal and
regulatory proceedings to which we are a party or are subject
and the expenses associated therewith, the requirements for
expenditures in connection with the
FCPA-related matters, including enhancements to Walmart's
compliance program and ongoing investigations; changes in the
rating of any of our indebtedness;
currency exchange rate fluctuations and volatility, fluctuations
in market rates of interest, and other conditions and events
affecting domestic and global
financial and capital markets, public health emergencies,
economic and geo-political conditions and events, including
civil unrest and disturbances and
terrorist attacks, unanticipated changes in generally accepted
accounting principles or in the interpretations or applicability
thereof, unanticipated changes in
accounting estimates and judgments, and unanticipated
restructurings and the related expenses. Moreover, we typically

earn a disproportionate part of our
annual operating income in the fourth quarter as a result of the
seasonal buying patterns. Those buying patterns are difficult to
forecast with certainty and can
be affected by many factors. The accuracy of the forecast of the
range of our effective tax rate for any year can be affected by
other factors, including changes
in assessments of certain tax contingencies, increases or
decreases in valuation allowances, outcome of administrative
audits, the impact of discrete items and
the mix of earnings among the Company's United States and
international operations.
The foregoing list of factors that may affect our operations and
financial performance is not exclusive. Other factors and
unanticipated events could adversely
affect our business operations and financial performance. Our
business operations, results of operations, financial condition
and liquidity are subject to other
risk factors and uncertainties, which we discuss below under the
caption "Item 1A. Risk Factors," and may discuss in
Management's Discussion and
Analysis of Financial Condition and Results of Operations
incorporated by reference in our Annual Reports on Form 10-K
and appearing in our Quarterly
Reports on Form 10-Q. In addition, from time to time, we may
disclose additional risk factors and other risks in our Quarterly
Reports on Form 10-Q and
disclose other risks in other reports filed with the SEC.
Investors and other readers are urged to consider all of these
risks, uncertainties and other factors
carefully in evaluating the forward-looking statements.
Forward-looking statements that we make or that are made by
others on our behalf are based on a
knowledge of our business and the environment in which we
operate and assumptions that we believe to be reasonable at the

time such forward-looking
statements are made, but because of the factors described and
listed above, as well as the other risks, uncertainties and factors
we disclose below and in the
other reports mentioned above, as well as other risks not known
to us at this time, or as a result of changes in facts, assumptions
not being realized or other
circumstances, actual results may differ materially from those
contemplated in the forward-looking statements. Consequently,
this cautionary statement
qualifies all of the forward-looking statements we make or that
are made on our behalf, including those made herein and that
are incorporated by reference
herein. We cannot assure the reader that the results or
developments expected or anticipated by us will be realized or,
even if substantially realized, that those
results or developments will result in the expected
consequences for us or affect us, our business, our operations or
our operating results in the manner we
expect. We caution readers not to place undue reliance on such
forward-looking statements, which speak only as of their dates.
We undertake no obligation to
update any of the forward-looking statements to reflect
subsequent events or circumstances except to the extent
required by applicable law.
4
WAL-MART STORES, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JANUARY 31, 2014
PART I

ITEM 1. BUSINESS
General
Wal-Mart Stores, Inc. ("Walmart," the "Company" or "we")
helps people around the world save money and live better –
anytime and anywhere – in retail
stores, online, and through their mobile devices. We earn the
trust of our customers every day by providing a broad
assortment of quality merchandise and
services at everyday low prices ("EDLP"), while fostering a
culture that rewards and embraces mutual respect, integrity and
diversity. EDLP is our pricing
philosophy under which we price items at a low price every day
so our customers trust that our prices will not change under
frequent promotional activity.
Our operations comprise three reportable business segments:
Walmart U.S., Walmart International and Sam's Club. Our fiscal
year ends on January 31 for
our United States ("U.S.") and Canadian operations. We
consolidate all other operations generally using a one-month lag
and on a calendar basis. Our
discussion is as of and for the fiscal years ended January 31,
2014 ("fiscal 2014"), January 31, 2013 ("fiscal 2013") and
January 31, 2012 ("fiscal 2012").
During fiscal 2014, we generated total revenues of $ 476
billion, which was primarily comprised of net sales of $473
billion.
Walmart U.S. is our largest segment and operates retail stores in
various formats in all 50 states in the U.S., Washington D.C.
and Puerto Rico, as well as its
online retail operations, walmart.com. Walmart U.S. generated
approximately 59% of our net sales in fiscal 2014 and, of our
three segments, historically has
had the highest gross profit as a percentage of net sales ("gross

profit rate"), and contributed the greatest amount to the
Company's net sales and operating
income.
Walmart International consists of the Company's operations in
26 countries outside of the U.S. and its operations include
numerous formats of retail stores,
wholesale clubs, including Sam's Clubs, restaurants, banks and
various retail websites. Walmart International generated
approximately 29% of our fiscal
2014 net sales. The overall gross profit rate for Walmart
International is lower than that of Walmart U.S. because of the
margin impact from its merchandise
mix. Walmart International has generally been our most rapidly
growing segment, growing primarily through new stores and
acquisitions and, in recent years,
has been growing its net sales and operating income at a faster
rate than our other segments. However, for fiscal 2014, Walmart
International sales growth
slowed due to fluctuations in currency exchange rates, as well
as no significant acquisitions, and operating income declined as
a result of certain operating
expenses.
Sam's Club consists of warehouse membership clubs and
operates in 48 states in the U.S. and in Puerto Rico, as well as
its online operations, samsclub.com.
Sam's Club accounted for approximately 12% of our fiscal 2014
net sales. Sam's Club operates as a warehouse membership club
with a lower gross profit rate
and lower operating expenses as a percentage of net sales than
our other segments.
We maintain our principal offices at 702 S.W. 8th Street,
Bentonville, Arkansas 72716, USA.

The Development of Our Company
Although Walmart was incorporated in Delaware in October
1969, the businesses conducted by our founders began in 1945
when Sam M. Walton opened a
franchise Ben Franklin variety store in Newport, Arkansas. In
1946, his brother, James L. Walton, opened a similar store in
Versailles, Missouri. Until
1962, our founders' business was devoted entirely to the
operation of variety stores. In that year, the first Wal -Mart
Discount City, which was a discount
store, opened in Rogers, Arkansas. In 1984, we opened our first
three Sam's Clubs, and in 1988, we opened our first supercenter.
In 1999, we opened our
first Neighborhood Market.
In 1992, we began our first international initiative when we
entered into a joint venture in Mexico. Since then, our
international presence has continued to
expand and at January 31, 2014, our Walmart International
segment conducted business in 26 countries.
5
Information About Our Segments
The Company is engaged in the operation of: retail stores and
membership clubs located throughout the U.S.; its wholly-
owned subsidiaries in Argentina,
Brazil, Canada, China, India, Japan and the United Kingdom; its
majority-owned subsidiaries in Africa, Central America, Chile,
China and Mexico; and its
joint ventures and other controlled subsidiaries in China. The
Company defines its reportable segments as those operations
whose results the chief operating
decision maker ("CODM") regularly reviews to analyze

performance and allocate resources.
The Walmart U.S. segment includes the Company's mass
merchant concept in the U.S. operating under the "Walmart" or
"Wal-Mart" brands, as well as
walmart.com. The Walmart International segment consists of
the Company's operations outside of the U.S., including various
retail websites. The Sam's Club
segment includes the warehouse membership clubs in the U.S.,
as well as samsclub.com. Corporate and support consists of
corporate overhead and other
items not allocated to any of our segments.
The Company measures the results of its segments using, among
other measures, each segment's net sales and operating income,
which includes certain
corporate overhead allocations. From time to time, we revise the
measurement of each segment's operating income, including any
corporate overhead
allocations, as determined by the information regularly
reviewed by our CODM. When the measurement of a segment
changes, previous period amounts and
balances are reclassified to be comparable to the current
period's presentation.
Walmart U.S. Segment
The Walmart U.S. segment had net sales of $279.4 billion,
$274.4 billion and $264.2 billion for fiscal 2014, 2013 and
2012, respectively. During the most
recent fiscal year, no single unit accounted for as much as 1%
of total Company net sales.
General. As a mass merchandiser of consumer products, the
Walmart U.S. segment operates retail stores in all 50 states,
Washington D.C. and Puerto Rico,
with supercenters in 48 states, Washington D.C. and Puerto

Rico, discount stores in 43 states and Puerto Rico and
Neighborhood Markets and other small
store formats in 31 states and Puerto Rico. Supercenters range
in size from 70,000 square feet to 260,000 square feet, with an
average size of approximately
179,000 square feet. Discount stores range in size from 30,000
square feet to 219,000 square feet, with an average size of
approximately 105,000 square feet.
Neighborhood Markets and other small formats range in size up
to 66,000 square feet, with an average size of approximately
40,000 square feet. From time to
time, Walmart U.S. tests different store formats to meet market
demands and needs. Customers can also purchase a broad
assortment of merchandise and
services online at www.walmart.com.
WALMART U.S. SEGMENT
RETAIL UNIT COUNT AND RETAIL SQUARE FEET (1)
Walmart U.S.
Supercenters
Walmart U.S.
Discount Stores
Fiscal Year Opened Closed Conversions(2) Total
Square
Feet Opened Closed Conversions(2) Total
Square
Feet
Balance forward 2,620 487,907 8 9 8 97,156
2010 49 — 8 6 2,755 510,757 — (2) (86) 810 87,721

2011 50 — 102 2,907 534,577 — — (102) 708 75,116
2012 43 — 79 3,029 552,237 — — (79) 629 66,402
2013 55 — 74 3,158 570,409 7 (1) (74) 561 59,098
2014 72 — 5 8 3 , 2 8 8 5 8 9 , 8 5 8 4 — (57) 508 53,496
Walmart U.S.
Neighborhood Markets and Other Small Formats
Total
Walmart U.S. Segment
Fiscal Year Opened Closed Conversions(2) Total
Square
Feet Opened(3) Closed Total
Square
Feet
Balance forward 185 7,193 3,703 592,256
2010 5 — — 190 7,374 54 (2) 3,755 605,852
2011 2 (3) — 189 7,374 52 (3) 3,804 617,067
2012 27 (6) — 210 8,047 70 (6) 3 , 8 6 8 626,686
2013 79 (3) — 286 11,226 141 (4) 4,005 640,733
2014 122 — (1) 407 15,778 198 — 4,203 659,132
(1) "Total" and "Square Feet" columns are as of January 31 for
the years shown. Retail square feet are reported in thousands.
(2) Conversions of discount stores or Neighborhood Markets to
supercenters.
(3) Total opened, net of conversions of discount stores or
Neighborhood Markets to supercenters.

6
Merchandise. Walmart U.S. does business in six strategic
merchandise units, listed below, across several store formats
including supercenters, discount
stores, Neighborhood Markets and other small store formats, as
well as walmart.com.
• Grocery consists of a full line of grocery items, including
meat, produce, deli, bakery, dairy, frozen foods, alcoholic and
nonalcoholic beverages,
floral and dry grocery, as well as consumables such as health
and beauty aids, baby products, household chemicals, paper
goods and pet supplies;
• Entertainment contains electronics, toys, cameras and
supplies, photo processing services, cellular phones, cellular
service plan contracts and
prepaid service, movies, music, video games and books;
• Health and wellness includes pharmacy, optical services and
over-the-counter drugs;
• Hardlines consist of stationery, automotive accessories,
hardware and paint, sporting goods, fabrics and crafts and
seasonal merchandise;
• Apparel includes apparel for women, girls, men, boys and
infants, shoes, jewelry and accessories; and
• Home includes home furnishings, housewares and small
appliances, bedding, home décor, outdoor living and
horticulture.
The Walmart U.S. segment also offers financial services and
related products, including money orders, prepaid cards, wire
transfers, check cashing and bill

payment. These services total less than 1% of annual net sales.
Nationally advertised merchandise represents a significant
portion of the merchandise sold in the Walmart U.S. segment.
We also market lines of merchandise
under our private-label store brands, including: "Equate,"
"Everstart," "Faded Glory," "George," "Great Value,"
"Hometrends," "Mainstays," "Marketside,"
"No Boundaries," "Ol' Roy," "Ozark Trail," "Parent's Choice,"
"Price First," "Prima Della," "Sam's Choice," "Spring Valley"
and "White Stag." The
Company also markets lines of merchandise under licensed
brands, some of which include: "Better Homes & Gardens,"
"Danskin Now," "Disney,"
"General Electric," "OP," "Rival" and "Starter."
The percentage of net sales for the Walmart U.S. segment,
including online sales, represented by each strategic
merchandise unit was as follows for fiscal
2014, 2013 and 2012:
Fiscal Years Ended January 31,
STRATEGIC MERCHANDISE UNITS 2014 2013 2012
Grocery 56% 55% 55%
Entertainment 11% 11% 12%
Health and wellness 10% 11% 11%
Hardlines 9% 9% 9%
Apparel 7% 7% 7%
Home 7% 7% 6%
Total 100% 100% 100%
Periodically, we make revisions to the categorization of the
components comprising our strategic merchandise units. When
revisions are made, we also adjust
the previous period's presentation to maintain comparability.

Operations. Hours of operation for nearly all supercenters, and
an increasing number of discount stores and Neighborhood
Markets, are 24 hours each day.
Hours of operation for the remaining supercenters, discount
stores, Neighborhood Markets and other small store formats
vary by location, but are generally
7:00 a.m. to 10:00 or 11:00 p.m., seven days a week. We accept
a variety of payment methods including cash, check, debit and
credit cards, electronic
benefits transfer cards, a private-label store credit card issued
by a third-party provider and online payments through PayPal.
In addition, our pharmacy and
optical departments accept payments for products and services
through our customers' health benefit plans.
Seasonal Aspects of Operations. The Walmart U.S. segment's
business is seasonal to a certain extent due to different calendar
events and national and
religious holidays, as well as different weather patterns.
Historically, its highest sales volume and segment operating
income have occurred in the fiscal quarter
ending January 31.
7
Competition. The Walmart U.S. segment competes with a
variety of local, national and global chains in the supermarket,
discount, grocery, department,
dollar, drug, variety and specialty stores, supercenter -type
stores, hypermarkets, internet-based retailers and catalog
businesses. We also compete with others
for desirable sites for new or relocated retail units.
Our ability to develop, open and operate units at the right

locations and offer value and service to our customers largely
determines our competitive position
within the retail industry. We employ many programs designed
to meet competitive pressures within our industry. These
programs include the following:
• EDLP: our commitment to price leadership and our pricing
philosophy under which we price items at a low price every day
so our customers trust
that our prices will not change under frequent promotional
activity;
• Rollbacks: our commitment to continually pass cost savings on
to the customer by lowering prices on selected goods;
• Save Even More and Ad Match: strategies to meet or be below
a competitor's advertised …
Fundamentals of
Accounting
Module 4
Balance Sheet - Assets
Note: All slides used in this presentation directly sourced from
Accounting What the Numbers Mean 10th edition by Marshall,
McManus, Viele
published by McGraw-Hill Irwin or created by F. Eilts
1
This Module’s Focus is on Assets on the
Balance Sheet

• What is the general purpose for Assets on the Balance Sheet?
• How are they used to support the business?
• If I am the leader of a business, what types of assets do I need
to generate sales and
grow the business?
• What should I consider when determining what level of assets
to carry?
• If I am considering investing in a company, why look at
Assets on their Balance Sheet?
2
Typical Balance Sheet
Investor perspective: Is the company generating an acceptable
return with their investments in assets (or has the company
made non-value additive or low return investments)?
3
Current Assets vs. Long-Term Assets
Distinction
• Current assets include cash and those assets that are expected
to be converted to cash
or used up within one year, or an operating cycle, whichever is
longer

• Long-term assets have the ability to generate revenue beyond
one year
• Includes items such as:
• Land
• Buildings
• Equipment
• Intangible assets
• Natural resources
4
Walmart Annual Report – Balance Sheet
Assets
5
Cash & Marketable Securities
Considerations
• Cash includes:
• Coins and paper money;
• Petty cash funds,
• Undeposited receipts,
• Money orders, and
• Checking accounts

• Marketable Securities include:
• Commercial paper,
• U.S. Treasury securities,
• Bank certificates of deposit, and
• Money-market mutual funds
• Effective cash management involves:
• Investing excess cash with minimal risk,
• Assures the availability of adequate amounts of cash,
• Avoids unnecessarily large amounts of idle cash, and
• Prevents theft and fraud.
Should The Company’s Goal Be to Maximize Cash of the
Balance
Sheet?
6
Textron 2016 Annual Report - Assets
7
Spirit Aerosystems 2016 Annual Report -
Assets
8
Cash & Marketable Securities - Key
Considerations

• Should I view Cash reported on the balance sheet in a positive
light or negative light?
• How does Cash factor into some of the ratios discussed in
module 2?
• Does the company have too much or too little cash?
• If the company has a significant cash balance, what do they
plan to do with it?
• If the company has minimal cash, will there be a near-term
liquidity problem?
• Does cash sitting on a company’s Balance Sheet help generate
any ROI for an investor?
• Would you expect most companies to hold a similar % of their
total assets in cash
regardless of the industry in which they compete?
9
Microsoft Annual Report - Assets
10
Apple Quarterly Report - Assets
11

Receivables – Key Considerations
• The balance sheet presentation for accounts receivable is the
net realizable value due from
the company’s customers – principally for items sold on credit
terms and/or financed
• Net realizable value represents the amount the business
expects to collect
• Accounts receivable minus the allowance for bad debt
account.
• Some receivables may end up not being collectable
• Why?
• Customer bankruptcy
• Customer disputes
• Valuation disputes
• An “Allowance for Doubtful Accounts” is created to reflect
the estimated amount of gross
receivables that will end up being uncollectible
• “Contra” asset account
• Neutralizes the impact of the impaired asset
• Notes receivable are a written promise to pay a specific
amount at a specific future date.
• Typically include an interest charge for use of the money
during the time period of the
note.
12

Allowance for Doubtful Account Examples
Textron
13
Receivables – Key Considerations
• What is the aging of the receivables?
• What is the receivables bad debt reserve as a % of gross
receivables?
• What amount of bad debt write-off’s has the company taken in
recent periods?
• Are there other receivables valuation adjustments/reserves?
• Does activity in receivables possibly indicate any concerns
with the “quality” of the
company’s recorded sales?
14
Inventory Valuation Alternatives
15
Inventory – Key Considerations

• Inventory
• Raw Materials
• Work-in-Process
• Finished Goods
• Inventory valuation methods
• First in, First Out (FIFO)
• Last In, First Out (LIFO)
• Weighted Average
• Specific Identification
• Different inventory valuation methods between 2 companies
will skew a comparison of
inventory “efficiency” (turns, days in inventory)
• Inventory must be reported at the lower of cost or market (i.e.
replacement cost)
• Errors in the amount of ending inventory have a direct dollar -
for-dollar effect on cost of
goods sold and net income
16
Inventory – Key Considerations
• Does the company have too much or too little inventory?
• What is the aging of the inventory?
• What is the inventory write-off trend?
• Is there a potential obsolete or excess inventory issue at the

company?
• What are the inventory turns and how do they compare to the
company’s peers?
• How good are the company’s inventory controls?
• Is it all there?
• Is there cost still in inventory that should be costed in the
P&L?
17
Prepaid Expense – Key Considerations
• Prepaid expenses are expenses that have been paid in the
current fiscal period but will
not be charged to the income statement until a subsequent fiscal
period
• Typical examples:
• Insurance
• Rent
• As discussed during Module 1, these are examples of
“reclassifications” that will occur
each month to apportion the appropriate amount of expense
from the balance sheet
into the income statement
18

Property Plant & Equipment – Key
Considerations
• Includes:
• Land
• Buildings
• Equipment
• Leasehold improvements
• Other than Land, these assets are depreciated over the
expected life of the asset
• Credit Accumulated Depreciation
• Debit Depreciation Expense on the Income Statement
• Depreciation represents an allocation of the cost of an asset to
the years in which the
benefits of the asset are expected to be received. It is an
application of the matching
concept.
• Various depreciation methods
• Straight line
• Declining balance
• Units of production
• Note: Preventative maintenance expenditures and routine
repair costs are clearly
expenses of the period in which they are incurred.
19
Considerations

20
Textron: “Property, Plant and Equipment Property, plant and
equipment are recorded at cost and are depreciated primarily
using the straight-line method. We capitalize expenditures for
improvements that increase asset values and extend useful lives.
Property, plant and equipment are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. If the
carrying value of the asset exceeds the sum of the undiscounted
expected future cash flows, the asset generally is written down
to
fair value. “
Considerations
• Are the assets producing value for the company?
• What analyses does the company perform prior to initiating
discretionary CapEx
expenditures?
• Are the asset lives appropriate?
• How is the company depreciating these assets?
• Are there non-productive fixed assets on the balance sheet?
21
Assets Acquired by Capital Lease

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