Perform common-size and horizontal analysis for the balance sheet for all 3 companies and submit a written report along with the calculations.

Balance Sheet Analysis

A.Common-size analysis

B.Horizontal analysis

Chevron is main company, andConoco Phhilips, Exxon Mobil are competitor companies.

This should be 5~6 pages. ( written report)

Example is attached.

III. Balance Sheet Analysis The following information will show the changes within the balance sheets for WalMart, Costco, and Target. Wal-Mart will be the first company that will be discussed. While Wal-Mart has slightly increased in the total current assets from 2010 to 2011, a very small percentage of total current assets have decreased from 2011 to 2012. In 2010, Wal-Mart reported that their total current assets equaled $48,032(amount in millions), which is 28.19% of total current assets. In 2011, Wal-Mart reported their total current assets slightly increased to $51,893, which is 28.72% of total current assets. The corporation increased 8.04% from 2010 to 2011. However, from 2011 to 2012, Wal-Mart only had a 5.94% increase in total current assets. The balance sheet shows that reasons for the increase from 2010 to 2011was due to the rise of total receivable which had a 22.80% increase and an 11.02% increase in total inventory. When accounts receivables and inventory increased, cash and equivalents decrease, this means that Wal-Mart's sales on account were higher than its cash collections. When the company raised their accounts receivable, it represents that they experienced good sales. While total inventory increased 12.10% through 2011 to 2012, prepaid expenses decreased 40.07%. The total current assets were increased even though the percentage of current assets has been decreased. Also, there was growth of total assets as well as total current assets. In 2010, Wal-Mart's total assets were $170,407 and $180,663 in 2011. Itincreased 6.02% within 2010 and 2011, and from 2011 to 2012 it increased 7.05%. WalMart reported that in 2012 the total assets equaled $193,406. From their property and equipment have increased over the three years especially land, buildings and improvements, and equipment and fixtures increased constantly while construction in progress, transportation equipment, etc. Their land property reported $22,591 in 2010, $24,386 in 2011, and $25,349 in 2012. Its percentage increase from 2010 to 2011 was 7.95%, and 3.95% for the following year. As well as land, buildings and equipment increased slightly reporting that $73,657 in 2010, $79,051 in 2011, and $83,294 in 2012. In 2010, Wal-Mart's total current liabilities were $55,543(amount in millions) and $58,484 in 2011 that is 5.29% increase from the year 2010. The corporation reported $62,300 of their total current liabilities in the year 2012, which is 6.52% increase from 2011. Although total current liabilities increased for the three years, accrued sales and other taxes were decreased a lot from 2010 to 2011, which reported $1,347 in 2010 and $157 in 2011. Its percentage change in 2011 reported -88.34%, however, increased 641.40% from 2011 to 2012. The corporation's long-term debt increased for the three years. It reported 20.44% increased from year 2010 to 2011, and 8.30% increased from 2011 to 2012, which means Wal-Mart did not receive enough income to pay off the debt. As well as total current liabilities rose up year-by-year, total liabilities& shareholder's equity have been constantly increased. Their total liabilities&shareholder's equity reported $170,407 in 2010, $180,663 in 2011, and $193,406 in the year 2012. From the year 2010, 6.02% was increased in 2011 and 7.05% rose from 2011 to 2012. Even though Wal-Mart's balance sheet shows the up and downs with their data, WalMart has been the best discount store throughout the years. Their unrealized gain is recorded in the company's balance sheets as either a current or a non-current asset, and unrealized loss is recorded as either a current or a non-current liability. When the current price of a security reported higher than the price that the investor paid for the security, an unrealized gain occurs. On the other hand, an unrealized loss occurs when an investor is holding onto a losing investment, such as a stock that has dropped in value. There were some unrealized gain and loss, however, Wal-Mart has been constantly growing with their assets, liabilities and equity while Target and Costco show decreases in specific areas. The data from the common-size balance sheet show the potential for Wal-Mart and it is useful information for potential investors. While analyzing Costco, it is evident that they have been very successful over the last few years. Through venturing internationally, Costco is on the up rise as an all-around company of accomplishment. From 2010-2011, Costco's total current assets rose, however, from 2011 to 2012, they slightly declined. In 2010, total current assets were recorded as $11,708, $13,706 in 2011, and $13,526 in 2012. For analysis purposes, these figures are all in the amounts of millions. From 2010 to 2011, Costco reported a steep increase in total current assets by approximately 17%. It can be seen that this change is supported by the rise in accounts cash and equivalents and their merchandise inventory. For example, the balance sheet reveals that cash and equivalents went from $3,214 to $4,009 in years 2010 and 2011, respectively. This solely represents a 24.74% change from year to year. Furthermore, merchandise inventories in 2010 were noted as $5,638 and $6,638 in 2011, therefore denoting a 17.74% increase. Another contributing factor to the total current asset increase could be that deferred taxes were higher with a 12.13% change. As far as the drop in total current assets from 2011-2012, short term investments went down by 17.33% and cash and equivalents decreased by approximately 12%. According to the common size balance sheet for Costco, total assets have increased since 2010. From 2010 to 2011, these total assets increased by 12.37%, however, from 2011 to 2012, they rose by just 1.42%. Potentially, this increase in total assets from 2010 t0 2011 was due to the fact that buildings and improvements were going up. For instance, this development alone had close to a 13% growth. As far as equipment and fixtures, there was an increase of almost 14% between 2010 and 2011. This also can be because buildings and improvements were higher in these years. Also, short term investments were more in 2010 to 2011 than 2011 t0 2012. With the increase in other assets in 2012, more developments were underway. Costco's construction in progress went up drastically from 2011 to 2012 with a 39.03% increase. Additionally, Costco's common size balance sheet and horizontal analysis discloses that both total current liabilities and total shareholders' equity liabilities have increased from 2010 to 2012. In 2010, total current liabilities were $10,063 million, $12,050 million in 2011, and $12,260 million in 2012. From 2010 t0 2011, total current liabilities rose by nearly 20%. This could be the effect of cash borrowings going down by an astonishing 100%, long term debt falling by 41.48%, and deferred income taxes increasing by almost 30%. Total stockholder's equity and liability grew as well from year to year. It provides that there was $23,815 million in 2010, $26,761 million in 2011, and $27, 140 million in 2012. In 2010 to 2011, total stockholders' equity and liabilities climbed by 12.37%. Along these lines, the balance sheet shows that unrealized gains had a 205.74% growth. Also, it reports that noncontrolling interests had over a 465% increase. Even though total stockholder's equity and liability only went up by 1.42% from 2011 to 2012, non-controlling interests declined by 72.50% and there was an unrealized loss of 58.18%. Clearly, total equity went down, however, the cause of this might have been because total long term debt drastically increased by almost 50%. All in all, common size balance sheets are very useful when evaluating a company. It provides very meaningful data, especially when breaking down true figures of a business. Through a structured internal analysis, it shows a firm's distribution process with a clear comparison of percentage changes from year to year. Regarding Costco's figures for the last few years, it seems plausible for an outsider to have full interest in investments or plainly see ongoing success for this company. Lastly, the common-size balance sheet forTarget shows that they have had some ups and downs throughout the years. Target has been seeing some decreases in the total current assets over the past few years. In 2010, Target reported $18,424.00 total current assets. That was reduced down to $17,213 in 2011, and reducing even more in 2012 to $16,449. There was a 4.44% decrease from 2011 to 2012 and a 6.57% decrease from 2010 to 2011 in total current assets. The balance sheet shows that one of the major reasons for this decrease is due to the cash and equivalents decreasing from 2010 through 2012. There was a decrease of 53.62% of cash and equivalents. Another factor for this decrease is the total receivables. There was an 11.67% decrease from 2010 through 2011. Although, their total current assets has been decreasing over the years their total assets have increased. Target has seen continued increases with their total assets. In 2012, it was reported that Target's total assets are $46,630 that is up from 2011 and 2010. In 2011, it was reported that Target's total assets equaled $43,705 and $44,533 in 2010. There was a 6.69% increase in total assets from 2011 to 2012 and a 1.86% decrease from 2010 to 2011. Target had a 16.27% increase in building and improvements from 2011-2012. This plays a major factor when it comes to their total assets. The common-size balance sheet also shows that Target has had some up and downs with their total current liabilities. In 2011, their total current liabilities were $10,070. That is an 11.10% decrease from the year 2010. Target had a 41.88% increase in total current liabilities in 2011 to 2012. One of the main causes of this increase was caused by Targets short term borrowing. There was a significant increase in 2012. The short-term borrowing would be from the new construction for the new Target stores. In the years of 2010 to 2012 there was a lot of new construction for Target. There was a 1.86% decrease in total liabilities and shareholder's equity from 2010 to 2011. One reason for the decrease in liabilities would be from having to hire new employees for the new stores that Target has opened. One area that caused the decrease was due to the retained earnings. In 2011 it decreased to 29.05% from 29.07% in 2010. From 2011 to 2012 there was a 6.69% increase in total liabilities and shareholder's equity. Although, the numbers from the common-size balance sheet show the up and downs for Target, they have been one of Wal-Mart's main competitors for many years. Target has remained strong over the years and will only get stronger. The numbers from the commonsize balance sheet are very important not only to Target, but also for any potential investors