Obtain Walmarts December 31, 2015, Form 10-K. Read the management discussion and analysis (MD&A), financial statements, and notes to the financial statements, especially Note 2, Summary of Significant Accounting Policies.

1. Does Walmart recognize all of its revenue at a point in time? If not, how is it recognized?
2. What costing method does Walmart use to determine cost of sales and inventory?
3. How does Walmart handle the requirement to report inventory at lower-of-cost-or-market?
4. Does Walmart have a large LIFO reserve? If not, why?
5. Operations create working capital accounts. Which of Walmarts working capital accounts are the most financially significant?
6. Does Walmarts working capital management yield a positive or negative net investment in working capital? Is this a good situation for Walmarts profitability? Why?
7. Note 9 to Walmarts consolidated financial statements presents a substantial amount of income taxrelated information, including an effective income tax rate reconciliation. Which reconciling items appear to be relatively persistent?
8. What is the effect of Walmarts generation of income in foreign jurisdictions on the effective tax rate? Is the effect changing over time?
9. What are the two largest deferred tax assets? Explain how they have arisen and why they are assets.
10. What is the valuation allowance? It has decreased during the two-year period. What is the implication of this decrease for earnings?
11. Why does Walmart report a deferred tax liability for property and equipment? Speculate whether Walmart expanded or contracted based on the information in this section of the tax note.
12. What kind of pension plans does Walmart have, and how are earnings affected by each?