Crash Course in Accounting and Financial Statement Analysis, Second Edition

Management’s Discussion and Analysis

Management’s Discussion and Analysis (MD&A) is a treasure trove of information. It usually includes:

• An overview of the company’s operations (often segment by segment)

• Selected financial data for the completed year

• Projections and expectations for the following year(s)

• Important accounting policy changes

The MD&A section spans a number of pages and provides detailed information that should be reviewed carefully (Exhibit 4.3).

Exhibit 4.3. Management’s Discussion and Analysis is a Treasure Trove of Information and Must be Reviewed Carefully

Overview

Wal-Mart Stores, Inc. (“Wal-Mart” or the “Company”) is a global retailer committed to improving the standard of living for our customers throughout the world. We earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at every day 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 that our customers trust that our prices will not change erratically under frequent promotional activity. Our focus for SAM’S CLUB is to provide exceptional value on brand-name merchandise at “members only” prices for both business and personal use. Internationally, we operate with similar philosophies. Our fiscal year ends on January 31.

We intend for this discussion to provide the reader with information that will assist in understanding ...