Walmart Income Statement For the year ended January 31, 2018 Walmart Income Stat
ID: 2820939 • Letter: W
Question
Walmart
Income Statement
For the year ended January 31, 2018
Walmart
Income Statement
For the year ended January 31, 2017
Details
2018
Details
2017
$
$
Total Revenue
$500,343,000
Total Revenue
$485,873,000
Cost of Revenue
$373,396,000
Cost of Revenue
$361,256,000
Gross Profit
$126,947,000
Gross Profit
$124,617,000
Sales, General and Admin.
$106,510,000
Sales, General and Admin.
$101,853,000
Operating Income
$20,437,000
Operating Income
$22,764,000
Add’l income/expense items
($2,984,000)
Add’l income/expense items
$100,000
Earnings Before Interest and Tax
$17,453,000
Earnings Before Interest and Tax
$22,864,000
Interest Expense
$2,330,000
Interest Expense
$2,367,000
Earnings Before Tax
$15,123,000
Earnings Before Tax
$20,497,000
Income Tax
$4,600,000
Income Tax
$6,204,000
Minority Interest
($661,000)
Minority Interest
($650,000)
Net Income-Cont. Operations
$9,862,000
Net Income-Cont. Operations
$13,643,000
Net Income-
$9,862,000
Net Income-
$13,643,000
Net Income-Applicable to Common Shareholders
$9,862,000
Net Income-Applicable to Common Shareholders
$13,643,000
Target
Income Statement
For the year ended February 23, 2018
Target
Income Statement
For the year ended January 28, 2017
Details
2018
Details
2017
$
$
Total Revenue
$71,879,000
Total Revenue
$69,495,000
Cost of Revenue
$51,125,000
Cost of Revenue
$49,145,000
Gross Profit
$20,754,000
Gross Profit
$20,350,000
Sales, General and Admin.
$14,248,000
Sales, General and Admin.
$13,356,000
Other Operating Items
$2,194,000
Other Operating Items
$2,025,000
Operating Income
$4,312,000
Operating Income
$4,969,000
Add’l income/expense items
0
Add’l income/expense items
0
Earnings Before Interest and Tax
$4,312,000
Earnings Before Interest and Tax
$4,969,000
Interest Expense
$666,000
Interest Expense
$1,004,000
Earnings Before Tax
$3,646,000
Earnings Before Tax
$3,965,000
Income Tax
$718,000
Income Tax
$1,296,000
Minority Interest
0
Minority Interest
0
Net Income-Cont. Operations
$2,928,000
Net Income-Cont. Operations
$2,669,000
Net Income
$2,934,000
Net Income
$2,737,000
Net Income-Applicable to Common Shareholders
$2,934,000
Net Income-
$2,737,000
1. Tax disclosures and strategies: Examine the income tax expense and deferred tax assets and liabilities.
a) Determine the amount of tax expense on the income statement and distinguish between current and deferred portions.
b) Assess the company’s effective tax rate, is it consistent? If not, do the fluctuations seem reasonable?
c) Do the deferred tax assets and liabilities seem appropriate given the company’s industry?
d) Is there a valuation allowance? How big is it relative to total deferred tax assets? Has the valuation allowance changed markedly during the year? This might indicate income shifting.
Walmart
Income Statement
For the year ended January 31, 2018
Walmart
Income Statement
For the year ended January 31, 2017
Details
2018
Details
2017
$
$
Total Revenue
$500,343,000
Total Revenue
$485,873,000
Cost of Revenue
$373,396,000
Cost of Revenue
$361,256,000
Gross Profit
$126,947,000
Gross Profit
$124,617,000
Sales, General and Admin.
$106,510,000
Sales, General and Admin.
$101,853,000
Operating Income
$20,437,000
Operating Income
$22,764,000
Add’l income/expense items
($2,984,000)
Add’l income/expense items
$100,000
Earnings Before Interest and Tax
$17,453,000
Earnings Before Interest and Tax
$22,864,000
Interest Expense
$2,330,000
Interest Expense
$2,367,000
Earnings Before Tax
$15,123,000
Earnings Before Tax
$20,497,000
Income Tax
$4,600,000
Income Tax
$6,204,000
Minority Interest
($661,000)
Minority Interest
($650,000)
Net Income-Cont. Operations
$9,862,000
Net Income-Cont. Operations
$13,643,000
Net Income-
$9,862,000
Net Income-
$13,643,000
Net Income-Applicable to Common Shareholders
$9,862,000
Net Income-Applicable to Common Shareholders
$13,643,000
Explanation / Answer
As for Walmart , the company has recorded a provisional adjustment to deferred income taxes as at Jan. 31, 2018 , with a view to reflect the reduction in the U.S. statutory tax rate from 35% to 21% as a result of the Tax Act.
a)Amount of tax expense on the income statement and distinguish between current and deferred portions. (Fig. In Millions) Walmart Target a. 31-Jan-17 31-Jan-18 Feb 23 2018 Feb 23 2017 Income tax expense on Income statement 4600 6204 718 1296 Current 4780 5459 910 1255 Deferred -180 745 -192 41 b. Effective tax rate 30.40% 30.30% 19.70% 32.70% It is consistent for Walmart , but For Target ETR has come down sharply--combined effect of new lower U.S.Corporate Income tax Rate(35% to 21%)effective Jan 2018 & lower Tax bracket. c. Deferred Tax assets 5939 8853 833 1281 Deferred Tax Liabilities -6048 -10127 -1513 -2106 d. Valuation allowance -1843 -1494 Net DTLiab. -1952 -2768 -680 -825As for Walmart , the company has recorded a provisional adjustment to deferred income taxes as at Jan. 31, 2018 , with a view to reflect the reduction in the U.S. statutory tax rate from 35% to 21% as a result of the Tax Act.
As for Target , it has released all the valuation allowances (carried due to a capital loss carryforward prior to 2015) in 2016 .Related Questions
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