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Janeth Kiongozi. | ACCOUNTING ANALYSIS 6301.501 FALL 2023 Company Analysis #1 WALMART INC, TARGET CORP, AMAZMON COM INC.

1. Mission Statements . Walmart Inc.'s Mission Statement: is “Helping people around the world save money and live better anytime and anywhere” and its vision is to “make every day easier for busy families.” by providing the opportunity to shop in both retail stores and through eCommerce. Through innovation, the Company is striving to continuously improve a customer-centric experience that seamlessly integrates e-commerce and retail stores in an omnichannel offering that saves time for its customers. Target Corp Mission Statement: “The promise of surprises, fun, ease, and inspiration at every turn, no matter when, where, or how you shop.” Amazon Com Inc. Mission Statement: “To be Earth’s most customer-centric company.” We seek to be Earth’s most customer-centric company. In each of our segments, we serve our primary customer sets, consisting of consumers, sellers, developers, enterprises, content creators, advertisers, and employees. We serve consumers through our online and physical stores and focus on selection, price, and convenience. We offer programs that enable sellers to grow their businesses, sell their products in our stores, and fulfill orders through us and programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. We serve developers and enterprises of all sizes through AWS, which offers a broad set of on-demand technology services, including computing, storage, database, analytics, machine learning, and other services. We also manufacture and sell electronic devices. In addition, we provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. 2. Financial Data Income Statement USD in Millions. Walmart Inc. As of Jan. 31,2023 Target corp. As of Jan. 28,2023 Amazon com Inc. As of Dec. 31, 2022 Total Revenue $ 611,289 $ 109,120 $ 513,983 Gross Profit $ 147,568 $ 26,891 $ 67,640 Net Income $ 11,680 $ 2,780 ($2,722) Cost of sale/Cost of goods sold (COGS) $ 463,721 $ 82,229 $ 446,343

Balance Sheet USD in Millions Walmart Inc. As of Jan. 31,2023 Target corp. As of Jan. 28,2023 Amazon com Inc. As of Dec. 31, 2022 Total Assets $ 243,197 $ 53,335 $ 462,675 Total Liabilities $ 159,443 $ 42,103 $ 316,632 Stockholders’ Equity $ 83,754 $ 11,232 $ 146,043 Total Cash $ 8,625 $ 2,229 $ 53,888 Net Property, Plant, Equipment $ 100,760 $ 31,512 $ 186,715 Total Debt $ 58,923 $ 18,777 $ 140,118 Statement of Cash Flow (USD in Millions) Walmart Inc. As of Jan. 31,2023 Target corp. As of Jan. 28,2023 Amazon com Inc. As of Dec. 31, 2022 Operating Cash Flows $ 28,841 $ 4,018 $ 46,752 Investing Cash Flows $ (17,722) $ (5,504) $ (37,601) Financing Cash Flows $ (17,039) $ (2,196) $ 9,718 Total Cash $ 8,841 $ (2,229) $ 54,253 Cash at the beginning of the period $ 14,834 $ 5,911 $ 36,477 Discussion: Does the Total Cash in the Statement of Cash Flow match the Cash amount in the Balance Sheet? If not, why? The total cash in the statement of cash flow differs this is because the balance sheet includes both unrestricted and restricted cash, while the cash flow statement may only reflect movement in unrestricted cash. Restricted cash refers to funds that are set aside for a specific purpose, such as collateral for a loan or legal requirements. Unrestricted cash refers to cash that’s readily available to be spent for any purpose and has not been pledged as collateral for a debt or other purpose. Restricted cash is not readily available for general use by the company, and therefore, it is not included in the cash flow statement. However, it is included in the cash and cash equivalent line item on the balance sheet because it is still part of the company’s overall cash position. 3. Selected Ratios

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The ratios that we selected are as follows: Gross Profit Margin. (USD in millions) • Walmart Inc.’s gross profit margin Gross profit Margin= "#$#%&#’()*+ ), -)).* *)/. "#$#%&# *100 Gross Profit Margin= $122,456’$718,942 $122,456 *100 The gross profit margin for Walmart Inc. is 0.24140 @ 24.14% • Target corp. gross profit margin is XX%. Discussion… Gross profit Margin= "#$#%&#’()*+ ), -)).* *)/. "#$#%&# *100 Gross Profit Margin= $2:6,24:’$54,446 $2:6,24: *100 The gross profit margin for Target Corp. is 0.246435 @ 24.64% • Amazon com Inc. gross profit margin. Gross profit Margin= "#$#%&#’()*+ ), -)).* *)/. "#$#%&# *100 Gross Profit Margin= $;28,658’$771,878 $;28,658 *100 The gross profit margin for Amazon com Inc is 0.13159968 @ 13.16% Return on Assets (ROA) (USD in Millions) • Walmart Inc. ROA Return on Asset (ROA)= <#+ =%()># ?$#"@-# @**#+ Return on Asset (ROA)= Profit margin* Asset turnover Return on Asset (ROA)= %#+ =%()># *@/#* * *@/#* @$#"@-# @**#+ Return on Asset (ROA)= $22,15: $122,456 * $122,456 $"#$,&’()$"##,*+, " Return on Asset (ROA)= 0.01910717* $122,456 $477,:45.; Return on Asset (ROA)=0.01910717* 2.5049902 Walmart Inc. ROA Return on Asset (ROA)= 0.04786327 ≅ 4.79% Ans. Walmart Inc. ROA Return on Asset (ROA) is 4.79% • Target corp. ROA Return on Asset (ROA)= <#+ =%()># ?$#"@-# @**#+ Return on Asset (ROA)= Profit margin* Asset turnover

Return on Asset (ROA)= %#+ =%()># *@/#* * *@/#* @$#"@-# @**#+ Return on Asset (ROA)= $4,95: $2:6,24: * $2:6,24: $-$,$$-)$-$,*&& " Return on Asset (ROA)= 0.02547654* $2:6,24: $;8,;98 Return on Asset (ROA)=0.02547654*2.03684692 Target corp. Return on Asset (ROA)= 0.05189181. ≅ 5.19% Target corp. Return on Asset (ROA) is 5.19% • Amazon com Inc. ROA Return on Asset (ROA)= <#+ =%()># ?$#"@-# @**#+ Return on Asset (ROA)= Profit margin* Asset turnover Return on Asset (ROA)= %#+ =%()># *@/#* * *@/#* @$#"@-# @**#+ Return on Asset (ROA)= ($4,944) $;28,658 * $;28,658 $#+",+(-)$#",,-#’ " Return on Asset (ROA)=-0.0052959* $;28,658 $772,124 Return on Asset (ROA)=-0.0052959* 1.16387915 Amazon com Inc Return on Asset (ROA)=-0.00616379. ≅ -0.62% Ans. Amazon com Inc's Return on Asset (ROA) is -0.62% RETURN ON EQUITY. (USD in Millions) • Walmart Inc. ROE ROE= %#+ =%()># @$#"@-# *D@"#D)/.#" #E&=+F ROE= $22,15: $*$,(-#)$’&,*’& " ROE= $22,15: $59,544.; Walmart Inc. ROE= 0.13299553 ≅ 13.3% • Target Corp. ROE ROE= %#+ =%()># @$#"@-# *D@"#D)/.#" #E&=+F ROE= $495: $&&,"$")&",*"( " ROE= $4,95: $24,:46.; Target Corp. ROE= 0.23109855. ≅ 23.11% • Amazon Com Inc. ROE ROE= %#+ =%()># @$#"@-# *D@"#D)/.#" #E&=+F

ROE= ’$4944 $&#+,,#$)$&$*,"#- " ROE= ’$4944 $274,277 Amazon Com Inc. ROE= -0.01914959. ≅ -1.91% DEBT-TO-EQUITY RATIO. (USD in Millions) • Walmart Inc.’s Debt-to-Equity ratio is XX%. Discussion… Debt to Equity ratio(D/E) = +)+@/ .#G+(/=@G=/=+F) +)+@/ *D@"#D)/.#" #E&=+F or ࠵?ℎ࠵?࠵?࠵? ࠵?࠵?࠵?࠵? ࠵?࠵?࠵?࠵? + ࠵?࠵?࠵?࠵? ࠵?࠵?࠵?࠵? ࠵?࠵?࠵?࠵? + ࠵?࠵?ℎ࠵?࠵? ࠵?࠵?࠵?࠵?࠵? ࠵?࠵?࠵?࠵?࠵?࠵?࠵? ࠵?࠵?࠵?࠵?࠵? ࠵?ℎ࠵?࠵?࠵?ℎ࠵?࠵?࠵?࠵?࠵? ࠵?࠵?࠵?࠵?࠵?࠵? Debt to Equity ratio(D/E) = $;5,648 $58,9;7 Walmart Inc. Debt to Equity ratio(D/E) =0.70352461 ≅ 0.704 • Target corp. Debt-to-Equity ratio Debt to Equity ratio(D/E) = +)+@/ .#G+(/=@G=/=+F) +)+@/ *D@"#D)/.#" #E&=+F Debt to Equity ratio(D/E) = $25,999 $22,484 Target corp. Debt to Equity ratio(D/E) = 1.67174145 ≅ 1.67 • Amazon com Inc.’s debt-to-equity ratio Debt to Equity ratio(D/E) = +)+@/ .#G+(/=@G=/=+F) +)+@/ *D@"#D)/.#" #E&=+F Debt to Equity ratio(D/E) = $27:,225 $271,:78 Amazon com Inc. debt to Equity ratio(D/E) =0.95942976 ≅ 0.96 Summary Table Walmart Inc. As of Jan. 31,2023 Target corp. As of Jan. 28,2023 Amazon com Inc. As of Dec. 31, 2022 Gross Profit Margin 24.14% 24.64% 13.16% ROA 4.79% 5.19% -0.62% ROE 13.3% 23.11% -1.91% Debt-to-Equity Ratio 0.704 1.67 0.96 The following is information on the data above, 1. Gross Profit Margin : Target Corp and Walmart Inc. have relatively similar gross profit margins at Target 24.64% and Walmart 24.14% indicating both companies are effective in generating profit while Amazon has a gross profit of 13.16% which is lower than Walmart and Target.

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2. Return on Assets (ROA): Target Inc has the highest ROA at 5.19%, followed by Walmart Inc at 4.79%, and Amazon lags at -0.62%. This suggests that Target Corp. generates about $5.19 in profit for every $100 in Asset. However, Amazon.com Inc. has a negative ROA of -0.62% which suggest that it did not generate positive profits relative to its asset during the period. 3. Return on Equity (ROE): Target has the highest ROE at 23.11%, indicating that it generates a higher return for its shareholders compared to Walmart (13.3%) and Amazon (-1.91%). However, Amazon Com Inc. has a negative ROE of -1.91% indicating that it did not generate positive returns for its shareholder's equity during the period. 4. Debt-to-Equity Ratio: Walmart has the lowest debt-to-equity ratio at 0.704, which indicates a lower level of financial leverage. Amazon also has a relatively moderate ratio of 0.96 while Target, on the other hand, has the highest debt-to-equity ratio of 1.67 indicating higher financial leverage. 4. Qualitative Data (This section asks you to discuss at least one qualitative information item from analysts’ opinions, footnotes, press releases, or the news and info section to help you make your recommendation. You can find analyst’s opinion in Yahoo Finance ; Financial statement footnotes are available in company’s 10-K Item 8 section; Press release can be found on the company’s website (For instance, google Target press release. You will find Target’s press release website https://corporate.target.com/press ); Other news or information section can be found on Wall Street Journal, CNN, etc. Simply google it (for instance, google Target recent news). You should use RECENT news or financial report for this section. Any qualitative and narrative information you found informative can contribute to this section.) 1. Walmart Inc. source: Walmart Inc, 2022. Annual Report. Walmart Inc 2022. Vertical Analysis of Walmart’s Income Statement and the Balance Sheet Current Ratio This ratio determines if a company has sufficient assets to pay its obligations over the next twelve months by comparing the number of current assets that a company has to its total amount of current liabilities. Walmart’s current ratio for the most recent twelve months is 0.9x. Walmart’s current ratio for fiscal years ending in January 2018 to fiscal years ending in January 2022 was an average of 0.9x. According to the most recent available data, Walmart’s current ratio reached a high of 1.0x in January 2021 (No, 2022). Walmart’s current ratio, 0.8x in January 2018, was the lowest in

five years. When comparing 2018 to 2020, Walmart’s current ratio declined by 0.8 times (11.8 percent), in 2022 (0.9 times -4.6 percent), and 2022 (0.9 times -4.6 percent), while increasing in 2019 (0.8 times, +5.1 percent), and 2021 (1.0 times, +22.4 percent). Accounts Receivable Turnover The number of times a company collects its average accounts receivable is measured by accounts receivable turnover. Accrual turnover is a statistic used by accountants and analysts to determine how efficiently organizations collect on the credit that they extend to their customers. The AR Turnover Ratio is computed by dividing net sales by the average amount of account receivables collected in each period (Walmart Inc., 2022). Net sales are calculated as follows: sales on credit minus sales returns minus sales allowances (if applicable). Inventory Turnover An inventory turnover ratio may be a ratio that indicates how many times a company’s inventory is sold and replaced throughout a specific period. During the three months ending January 31, 2022, Walmart’s inventory turnover ratio was 2.04. Vertical Analysis of Income Statement and Balance Sheet According to the business, Walmart’s U.S. fourth-quarter net sales in 2022 increased 5.7 percent to $105.28 billion, up from $99.59 billion a year earlier, thanks to advances in grocery market share. Sales on a comparable basis increased by 6 percent (5.6 percent excluding fuel). The average ticket size climbed by 2.4 percent, while the total number of transactions increased by 3.1 percent, following a loss of 10.9 percent in the previous year’s comparable period. According to the company, Walmart’s overall fiscal 2022 net sales increased by 6.3 percent to $393.25 billion, up from $369.96 billion in fiscal 2021. Comp-store sales increased by 6.8 percent and were up 6.4 percent, excluding gasoline, for a total rise of 15 percent over the previous two-year period. This change indicates that Walmart’s prospects are looking good, and it is in profit-making. According to the report, the company’s overall sales grew to $152.9 billion in the three months ended in January, representing a 0.5 percent gain over the same period the previous year, while operating income improved by 7.3 percent $5.9 billion (Walmart Inc, 2022). Company profits per share were $1.53, a significant increase from the $1.50 that most industry analysts had predicted. 2. Target. The source is from target press release on feb 28 2023 Q4 2022 Highlights • Comparable sales increased 0.7 percent, on top of 8.9 percent in Q4 2021, driven entirely by an increase in guest traffic. • Same-day services (in-store pickup, Drive Up, and Shipt), which represent more than 10 percent of total sales, increased 4.3 percent in the quarter. • Inventory at the end of the quarter was 3 percent lower than in 2021, despite an increase in early receipts compared with last year. Inventory in discretionary categories was approximately 13 percent lower than a year ago, partially offset by higher inventory in frequency categories.

Full-Year 2022 Highlights • Total revenue grew $3 billion to $109 billion, from $106 billion in 2021. Total revenue has grown more than $30 billion since 2019. • Comparable sales grew 2.2 percent, on top of 12.7 percent in 2021. • Comparable traffic grew 2.1 percent, on top of 12.3 percent in 2021. • All five core merchandise categories delivered unit share growth, on top of strong share performance over the past several years. • The Company continues to invest in long-term growth plans while pursuing efficiencyinitiatives. MINNEAPOLIS (February 28, 2023) – Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2022 results. The Company reported fourth-quarter GAAP earnings per share (EPS) of $1.89, compared with $3.21 in 2021, and $5.98 for full-year 2022, compared with $14.10 in 2021. Adjusted EPS 1 was $1.89 for the fourth quarter, compared with $3.19 in 2021, and $6.02 for the full-year, compared with $13.56 in 2021. Full-year 2021 GAAP EPS included a $335 million pretax gain on the sale of Dermstore, which was excluded from Adjusted EPS. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS. “We’re pleased that our business delivered comparable sales growth in the fourth quarter, in what continues to be a very challenging environment. Strength in Food & Beverage, Beauty and Household Essentials offset ongoing softness in discretionary categories. This performance highlights the benefit of our multi-category merchandise assortment, which drives relevance with our guests in any environment, and is a key reason we grew traffic every quarter last year,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “Looking ahead, we’re focused on executing our long-term strategy, including continued differentiation through affordability, assortment, ease and convenience. At the same time, we’re planning our business cautiously in the near term to ensure we remain agile and responsive to the current operating environment. We’re pleased that we entered the year in a very healthy inventory position, reflecting our conservative approach in discretionary categories and our commitment to reliability in our frequency businesses. As we plan for the year ahead, we will continue to make robust capital investments and pursue efficiency opportunities in support of our long-term growth. We’re proud of the loyalty and trust we’ve built with our guests, and want to thank our team for their ongoing commitment to delivering a truly exceptional and differentiated retail experience.” Guidance For the first quarter of 2023, the Company expects comparable sales in a wide range, from a low- single-digit decline to a low-single-digit increase, and an operating income margin rate of 4 to 5 percent. First-quarter GAAP EPS and adjusted EPS are both expected to range from $1.50 to $1.90.

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For the full year, the Company expects comparable sales in a wide range from a low-single-digit decline to a low-single-digit increase. Operating income is expected to grow by more than $1 billion, and GAAP EPS and adjusted EPS are both expected to range from $7.75 to $8.75. Over the next three years, the Company expects its operating income margin rate will reach, and begin to move beyond, its pre-pandemic rate of 6 percent, and believes it could reach an operating income margin rate of 6 percent as early as fiscal 2024, depending on the speed of recovery for the economy and consumer demand. 3. Amazon Com Inc. The source of information is Amazon.com, Inc. • Net sales increased 9% to $514.0 billion in 2022, compared with $469.8 billion in 2021. Excluding the $15.5 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 13% compared with 2021. o North America segment sales increased 13% year-over-year to $315.9 billion. o International segment sales decreased 8% year-over-year to $118.0 billion or increased 4% excluding changes in foreign exchange rates. o AWS segment sales increased 29% year-over-year to $80.1 billion. • Operating income decreased to $12.2 billion in 2022, compared with $24.9 billion in 2021. o North America segment operating loss was $2.8 billion, compared with operating income of $7.3 billion in 2021. o International segment operating loss was $7.7 billion, compared with operating loss of $0.9 billion in 2021. o AWS segment operating income was $22.8 billion, compared with operating income of $18.5 billion in 2021. • Net loss was $2.7 billion in 2022, or $0.27 per diluted share, compared with net income of $33.4 billion, or $3.24 per diluted share, in 2021. o 2022 net loss includes a pre-tax valuation loss of $12.7 billion included in non- operating income (expense) from the common stock investment in Rivian Automotive, Inc., compared to a pre-tax valuation gain of $11.8 billion from the investment in 2021. • Operating cash flow increased 1% to $46.8 billion for the trailing twelve months, compared with $46.3 billion for the trailing twelve months ended December 31, 2021. • Free cash flow decreased to an outflow of $11.6 billion for the trailing twelve months, compared with an outflow of $9.1 billion for the trailing twelve months ended December 31, 2021. • Free cash flow fewer principal repayments of finance leases and financing obligations increased to an outflow of $19.8 billion for the trailing twelve months, compared with an outflow of $20.4 billion for the trailing twelve months ended December 31, 2021. • Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to an outflow of $12.8 billion for the

trailing twelve months, compared with an outflow of $14.3 billion for the trailing twelve months ended December 31, 2021. Financial Guidance The following forward-looking statements reflect Amazon. Com expectations as of February 2, 2023, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as uncertainty regarding the impacts of the COVID- 19 pandemic, fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market and global supply chain constraints, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below. First Quarter 2023 Guidance • Net sales are expected to be between $121.0 billion and $126.0 billion or to grow between 4% and 8% compared with the first quarter of 2022. This guidance anticipates an unfavorable impact of approximately 210 basis points from foreign exchange rates. • Operating income is expected to be between $0 and $4.0 billion, compared with $3.7 billion in first quarter of 2022. • This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded. Financial analyst statement from Yahoo Finance on August 18, 2023, by market digest: CCEP, CSCO, ITRI Stocks fell sharply on Thursday, extending their recent losses. Investors weighed strong earnings from Walmart and Cisco, along with news that Blue Shield of California would drop CVS Health as its pharmacy benefit manager and begin working with Amazon to cut costs. CVS shares fell sharply, as did the shares of other health insurers that provide PBM services. On the employment front, first-time claims for state unemployment benefits fell by 11,000 to a seasonally adjusted 239,000 for the week ended August 12, slightly below the Reuters consensus forecast of 240,000. Continuing claims rose by 32,000 to 1.716 million. The Dow fell 0.84%, the S&P 0.77%, and the Nasdaq 1.17%. Crude oil rose slightly to $80 per barrel, while gold fell $9 to $1919 per ounce. 5. Recommendations (Below are two samples of recommendation. You can provide recommendations on investment and/or loan made to the company, whether a company can be a good employer, and any other aspects you find informative and interesting.) Sample 2: Based on our analysis on key financial ratios among the companies we selected, we recommend investing in Company 1 for the following reasons. The Debt-to-Equity ratio is lower than its peers. Company 1’s current ratio is healthier than other companies. Our further analysis shows that it has consistent year-over-year revenue growth. Its two-sided network (both merchant and consumer) has a unique advantage. Its services are available in 190+ countries, it has a huge

advantage while compared with its peers. The stock is currently trading at $75 which is ¼ of its all-time high ($300 2 years ago). So, our team has a strong recommendation to invest in this company. Based on our analysis of key financial ratios among the companies we selected, we recommend investing in Walmart Inc. for the following reasons. • The debt-to-equity ratio for Walmart is 0.704 which is significantly lower than the other companies Target Corp and Amazon.com Inc with a debt-to-equity ratio of 1.67 and 0.96. This indicates that Walmart has a more conservative approach to debt financing, reducing financial risk and potential liabilities to stakeholders which is a positive sign for the investors. • The return on assets for Target Corp 5.19% is higher compared to Walmart Inc 4.79% and Amazon.com Inc -0.62% demonstrating its ability to convert equity into profits. Target’s ROA signifies efficient utilization of its assets to generate returns which reflects operational efficiency and a strong business model. In conclusion, Walmart Inc. appears to have a healthy financial position with a relatively low debt- to-equity ratio of 0.704 and a positive profitability ratio of ROE of 13.3% and ROA of 4.79%. which indicates the company to be stable and well established suitable for conservative investors for steady return. Target has a strong profitability ratio ROA of 5.19% and ROE of 23.11% but a higher debt-to-equity ratio of 1.67 this can be an attractive investment option for those seeking higher returns, but it has a risk because of high financial leverage.

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