PLEASE NOTE: The answer is not $21,367

(b) What conclusions concerning the management of cash can be drawn from free cash flow for each company? BIT T I, E = 11 E * 3 O Word(s) 323 521 300 Appendix E Specimen Financial Statements: Wal-Mart Stores, Inc. The following are Wal-Mart Stores, Inc.'s financial statements as presented in the company's annual report for the year ended January 31, 2017. The complete annual report, including notes to the financial statements, is available at the company's website. Wal-Mart Stores, Inc. Consolidated Statement of Income Fiscal Years Ended January 31, (Amounts in Millions, except per share data) 2017 2016 2015 Revenues: Net sales $481,317 $478,614 $482,229 Membership and other income 4,556 3,516 3,422 Total revenues 485,873 482,130 485,651 Costs and expenses: Cost of sales 361,256 360,984 365,086 Operating, selling, general and administrative expenses 101,853 97,041 93,418 Operating income 22,764 24,105 27,147 Interest: Debt 2,044 2,027 2,161 Capital lease and financing obligations Interest income (100) (81) (113) Interest, net 2,267 2,467 2,348 Income from continuing operations before income taxes 20,497 21,638 24,799 Provision for income taxes 6,204 6,558 7,985 Income from continuing operations 14,293 15,080 16,814 Income from discontinued operations, net of income taxes 285 Consolidated net income 14,293 15,080 17,099 Consolidated net income attributable to noncontrolling interest (650) (736) Consolidated net income attributable to Walmart $ 13,643 $ 14,694 $ 16,363 Basic net income per common share: Basic income per common share from continuing operations attributable to Walmart $ $ 4.58 $ 5.01 Basic income per common share from discontinued operations attributable to Walmart 0.06 Basic net income per common share attributable to Walmart $ 4.40 $ 4.58 $ 5.07 Diluted net income per common share: Diluted income per common share from continuing operations attributable to Walmart 4.38 4.57 $ 4.99 Diluted income per common share from discontinued operations attributable to Walmart Diluted net income per common share attributable to Walmart $ $ 4.57 $ 5.05 Weighted-average common shares outstanding: Basic 3,101 3,207 3,230 Diluted 3,112 3,217 3,243 Dividends declared per common share $ $ 1.96 $ See accompanying notes (386) 4.40 $ $ 0.06 4.38 2.00 1.92 Wal-Mart Stores, Inc. Consolidated Statement of Comprehensive Income Fiscal Years Ended January 31, (Amounts in millions) 2017 2016 2015 Consolidated net income $14,293 $15,080 $17,099 Less consolidated net income attributable to nonredeemable noncontrolling interest (650) (386) (736) Consolidated net income attributable to Walmart 13,643 14,694 16,363 Other comprehensive income (loss), net of income taxes Currency translation and other (2,882) (5,220) (4,558) Net investment hedges 413 366 379 Cash flow hedges 21 (202) (470) Minimum pension liability (397) 86 (69) Other comprehensive income (loss), net of income taxes (2,845) (4,970) (4,718) Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest 210 541 546 Other comprehensive income (loss) attributable to Walmart (2,635) (4,429) (4.172) Comprehensive income, net of income taxes 11,448 10,110 12,381 Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest (440) 155 (190) Comprehensive income attributable to Walmart $11,008 $10,265 $12,191 See accompanying notes Wal-Mart Stores, Inc. Consolidated Balance Sheets As of January 31, 2017 2016 $ 6,867 5,835 43,046 1,941 57,689 $ 8,705 5,624 44,469 1,441 60,239 (Amounts in milions) ASSETS Current assets: Cash and cash equivalents Receivables, net Inventories Prepaid expenses and other Total current assets Property and equipment: Property and equipment Less accumulated depreciation Property and equipment, net Property under capital lease and financing obligations: Property under capital lease and financing obligations Less accumulated amortization Property under capital lease and financing obligations, net Goodwill Other assets and deferred charges Total assets 179,492 (71,782) 107,710 176,958 (66,787) 110,171 11,637 (5,169) 6,468 17,037 9,921 $198,825 11,096 (4,751) 6,345 16,695 6,131 $199,581 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings Accounts payable Accrued liabilities Accrued income taxes Long-term debt due within one year Capital lease and financing obligations due within one year Total current liabilities $ 1,099 41,433 20,654 921 2,256 565 66,928 $ 2,708 38,487 19,607 521 2,745 551 64,619 36,015 6,003 9,344 38,214 5,816 7,321 317 Long-term debt Long-term capital lease and financing obligations Deferred income taxes and other Commitments and contingencies Equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive loss Total Walmart shareholders' equity Nonredeemable noncontrolling interest Total equity Total liabilities and equity See accompanying notes 1,805 305 2,371 89,354 (14,232) 77,798 2,737 80,535 $198,825 90,021 (11,597) 80,546 3,065 83,611 $199,581 Wal-Mart Stores, Inc. Consolidated Statements of Shareholders' Equity and Redeemaole Noncontrolling Interest Retained Earnings $76,566 16,363 Accumulated Total Other Walmart Nonredeemable Comprehensive Shareholders' Noncontrolling Loss Equity Interest $ 2,996) $76,255 $5,084 16,363 736 Redeemable Total Noncontrolling Equity Interest $81,339 $ 1,491 17,099 1 - (4,172) 1 (4,172) (546) (4,718) - (6,185) (950) (6,185) (980) 11 (6,185) (980) 11 IT (1,491) 00 8 1 113 (17) 85,777 14,694 (7,168) 81,394 14,694 (731) 4,543 386 (618) 85,937 15,080 11 1 | (4,429) (4,429) 1 (541) (4.970) 1 Capital in Common Stock Excess of Amounts in millions) Shares Amount Par Value Balances as of February 1, 2014 3,233 $323 $2,362 Consolidated net income Other comprehensive loss, net of income taxes Cash dividends declared ($1.92 per share) Purchase of Company stock (13) (1) (29) Purchase of redeemable noncontrolling interest Other 129 Balances as of January 31, 2015 3,228 323 2,462 Consolidated net income Other comprehensive loss, net of income taxes Cash dividends declared ($1.96 per share) Purchase of Company stock (65) (6) (102) Cash dividend declared to noncontrolling interest Other (1) (555) Balances as of January 31, 2016 3,162 317 1,805 Consolidated net income Other comprehensive loss, net of income taxes Cash dividends declared ($2.00 per share) Purchase of Company stock (120) (12) (174) Cash dividend declared to noncontrolling interest Other 6 740 Balances as of January 31, 2017 3,048 $305 $2,371 See accompanying notes (6,294) (4.148) 6,294) (4,256) 11 (6,294) (4,256) 11 1 TI (8) 90,021 13,643 (691) (632) 3,065 650 (563) 80,546 13,643 (691) (1,195) 83,611 14,293 (11,597) - 1 - - - (2,635) (2,635) (210) (2,845) ! (6,216) (8,090) (6,216) (8,276) 11 (6,216) (8,276) (519) 736 (4) $89,354 (249) $2,737 (519) 487 $80,535 $(14,232) $77,798 $ Wal-Mart Stores, Inc. Consolidated Statements of Cash Flow Fiscal Years Ended January 31, 2017 2016 2015 $ 14,293 $ 15,080 $ 17,099 (285) 16,814 14,293 15,080 (Amounts in millions) Cash flows from operating activities: Consolidated net income Income from discontinued operations, net of income taxes Income from continuing operations Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization Deferred income taxes Other operating activities Changes in certain assets and liabilities, net of effects of acquisitions: Receivables, net Inventories Accounts payable Accrued liabilities Accrued income taxes Net cash provided by operating activities 10,080 761 206 9,454 (672) 1,410 9,173 (503) 785 (402) 1,021 3,942 1,137 492 31,530 (19) (703) 2,008 1,303 (472) 27,389 (569) (1,229) 2,678 1,249 166 28,564 (11,477) 635 246 (12,174) 570 671 (10,619) 456 662 (1,901) (2,463) (122) (13,987) (79) (10,675) (192) (11,125) Cash flows from investing activities: Payments for property and equipment Proceeds from the disposal of property and equipment Proceeds from the disposal of certain operations Purchase of available for sale securities Investment and business acquisitions, net of cash acquired Other investing activities Net cash used in investing activities Cash flows from financing activities: Net change in short-term borrowings Proceeds from issuance of long-term debt Payments of long-term debt Dividends paid Purchase of Company stock Dividends paid to noncontrolling interest Purchase of noncontrolling interest Other financing activities Net cash used in financing activities (1,673) 137 (2,055) (6,216) (8,298) (479) (90) (255) (18,929) 1,235 39 (4432) (6,294) (4,112) (719) (1,326) (513) (16,122) (6,288) 5,174 (3,904) (6,185) (1,015) (600) (1,844) (409) (15,071) (452) (1,838) 8,705 $ 6,867 (1,022) (430) 9,135 $ 8,705 (514) 1,854 7,281 $ 9,135 Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental disclosure of cash flow information: Income taxes paid Interest paid See accompanying notes 4,507 2,351 8,111 2,540 8,169 2,433 (a) Based on the information contained in these financial statements, compute free cash flow for Amazon at December 31, 2016 and Wal- Mart for January 31, 2017. (Show a negative free cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000). Enter amounts in millions.) Amazon.com, Inc. Wal-Mart Stores, Inc. Free cash flow 9706 $ (b) What conclusions concerning the management of cash can be drawn from free cash flow for each company? BIT T I, E = 11 E * 3 O Word(s)