Fluctuations in foreign exchange rates may materially adversely affect our

financial performance and our reported results of operations.

Our operations in countries other than the US are conducted primarily in the local

currencies of those countries. Our Consolidated Financial Statements are denominated

in US dollars, and to prepare those financial statements we must translate the amounts

of the assets, liabilities, net sales, other revenues and expenses of our operations

outside of the US from local currencies into US dollars using exchange rates for the

current period. In recent years, fluctuations in currency exchange rates that were

unfavorable have had adverse effects on our reported results of operations.

As a result of such translations, fluctuations in currency exchange rates from periodto

period that are unfavorable to us may also result in our Consolidated Financial

Statements reflecting significant adverse periodoverperiod changes in our financial

performance or reflecting a periodoverperiod improvement in our financial performance

that is not as robust as it would be without such fluctuations in the currency exchange

rates. Such unfavorable currency exchange rate fluctuations will adversely affect the

reported performance of our Walmart International operating segment and have a

corresponding adverse effect on our reported consolidated results of operations.

We may pay for products we purchase for sale in our stores and clubs around the world

with a currency other than the local currency of the country in which the goods will be

sold. When we must acquire the currency to pay for such products and the exchange

rates for the payment currency fluctuate in a manner unfavorable to us our cost of sales

may increase and we may be unable or unwilling to change the prices at which we sell

those goods to address that increase in our costs, with a corresponding adverse effect

on our gross profit. Consequently, unfavorable fluctuations in currency exchange rates

have and may continue to adversely affect our results of operations.

b What is the impact on the above paragraph on the financial statements of WMT

Be specific in terms of P&L and balance sheet impact. points.

You should use scenarios like we did during office hours to explain if the $ is

stronger or weaker vs the local currency ie EUR

Answer rating: 100% (QA)

The impact of fluctuations in foreign exchange rates on Walmarts financial statements can be significant Lets consider scenarios where the US dollar U... View the full answer