THL TIEVIEW 2014 2015 2016 $ 9,135 6,778 45,141 2,224 $ 8,705 5,624 44,469 1,441 $ 7,281 6,677 44,858 1,909 460 $ 61,185 178,678 (60,771) 19,510 6,149 $204,751 $ 63,278 182,634 (65,979) 18,102 5,455 $203,490 $ 60,239 188,054 (71,538) 16,695 6,131 $199,581 Assets: Cash and cash equivalents Accounts and notes receivable-net Inventories Prepaid expenses and other current assets Current assets of discontinued segments Current Assets Property, plant, and equipment-at cost Accumulated depreciation Goodwill Other assets Total Assets Liabilities and Equities: Accounts payable Current accrued expenses Notes payable and short-term debt Current maturities of long-term debt Income taxes payable Current liabilities of discontinued operations Current Liabilities Long-term debt obligations Deferred tax liabilities-noncurrent Redeemable noncontrolling interest Total Liabilities Common stock + Additional paid-in capital Retained earnings Accum. other comprehensive income (loss) Total Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equities $ 38,410 19,152 1,592 5,078 1,021 $ 38,487 19,607 2,708 3,296 521 $ 65,253 43,495 8,805 $ 64,619 44,030 7,321 $ 37,415 18,793 7,670 4,412 966 89 $ 69,345 44,559 8,017 1,491 $123,412 2,685 76,566 (2,996) $ 76,255 5,084 $ 81,339 $204,751 $117,553 2,785 85,777 (7,168) $ 81,394 4,543 $ 85,937 $203,490 $115,970 2,122 90,021 (11,597) $ 80,546 3,065 $ 83,611 $199,581 Source: Wal-Mart Stores, Inc. Forms 10-K for the three fiscal years ended January 31, 2014, 2015, and 2016. Integrative Case 8.1 Walmart Walmart makes significant investments in operating capacity, primarily via investments in property, plant, and equipment, but also via investments in wholly and partially owned subsidiaries. Walmart also has significant non-U.S. operations in its Walmart International segment. The Chapter 8 online appendix provides Walmart's January 31, 2016, Consolidated Financial Statements and accompanying notes, which describe these significant investments. Required a. Estimate the average total estimated useful life of depreciable property, plant, and equipment. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain. b. How should an analyst interpret fluctuations in this estimate for a given company over time? How should an analyst interpret differences in this estimate between a company and its competitors? c. Estimate the average age of depreciable assets, the percentage of PP&E that has been used up, and the remaining useful life. How might an analyst use this information? d. Has Walmart recognized impairment of property, plant, and equipment or goodwill during the fiscal year ending January 31, 2016? Why is it important for the analyst to know the answer to this question? e. Under U.S. GAAP, the impairment tests for goodwill and PP&E are different. Describe the main difference. THL TIEVIEW 2014 2015 2016 $ 9,135 6,778 45,141 2,224 $ 8,705 5,624 44,469 1,441 $ 7,281 6,677 44,858 1,909 460 $ 61,185 178,678 (60,771) 19,510 6,149 $204,751 $ 63,278 182,634 (65,979) 18,102 5,455 $203,490 $ 60,239 188,054 (71,538) 16,695 6,131 $199,581 Assets: Cash and cash equivalents Accounts and notes receivable-net Inventories Prepaid expenses and other current assets Current assets of discontinued segments Current Assets Property, plant, and equipment-at cost Accumulated depreciation Goodwill Other assets Total Assets Liabilities and Equities: Accounts payable Current accrued expenses Notes payable and short-term debt Current maturities of long-term debt Income taxes payable Current liabilities of discontinued operations Current Liabilities Long-term debt obligations Deferred tax liabilities-noncurrent Redeemable noncontrolling interest Total Liabilities Common stock + Additional paid-in capital Retained earnings Accum. other comprehensive income (loss) Total Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equities $ 38,410 19,152 1,592 5,078 1,021 $ 38,487 19,607 2,708 3,296 521 $ 65,253 43,495 8,805 $ 64,619 44,030 7,321 $ 37,415 18,793 7,670 4,412 966 89 $ 69,345 44,559 8,017 1,491 $123,412 2,685 76,566 (2,996) $ 76,255 5,084 $ 81,339 $204,751 $117,553 2,785 85,777 (7,168) $ 81,394 4,543 $ 85,937 $203,490 $115,970 2,122 90,021 (11,597) $ 80,546 3,065 $ 83,611 $199,581 Source: Wal-Mart Stores, Inc. Forms 10-K for the three fiscal years ended January 31, 2014, 2015, and 2016. Integrative Case 8.1 Walmart Walmart makes significant investments in operating capacity, primarily via investments in property, plant, and equipment, but also via investments in wholly and partially owned subsidiaries. Walmart also has significant non-U.S. operations in its Walmart International segment. The Chapter 8 online appendix provides Walmart's January 31, 2016, Consolidated Financial Statements and accompanying notes, which describe these significant investments. Required a. Estimate the average total estimated useful life of depreciable property, plant, and equipment. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain. b. How should an analyst interpret fluctuations in this estimate for a given company over time? How should an analyst interpret differences in this estimate between a company and its competitors? c. Estimate the average age of depreciable assets, the percentage of PP&E that has been used up, and the remaining useful life. How might an analyst use this information? d. Has Walmart recognized impairment of property, plant, and equipment or goodwill during the fiscal year ending January 31, 2016? Why is it important for the analyst to know the answer to this question? e. Under U.S. GAAP, the impairment tests for goodwill and PP&E are different. Describe the main difference