Session 13 - Case Walmart

HBA1 Finance Course

Case: Walmart

Concept: WACC

Finding Capital Structure

Debt

1. Going down the balance sheet, we look in liabilities and try to ascertain what should be included. There are two criteria:
   1. Is it interest bearing?
   2. Is it a source of permeant financing? Or rather, will this stay on the book

We exclude the following:

• A/P
• Accrued Liabilities
• Other Current Liabilities (unsure but it’s small)
• Deferred Taxes

We then include the following:

• Short-term Borrowing
• Current Portion of LT
• LT debt

Preferred Shares

No preferred shares.

Equity

We want to use the MARKET VALUE and never the BOOK VALUE of equity, so to find the equity we take

1. our Number of Shares Outstanding
2. and the most recent share price which was mentioned as a quote in the case to be $102 (but if it wasn’t told to us, we should just use the latest value we have)