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Essay / Research Paper Abstract
This 4 page paper describes the sources of capital for Wal-Mart, explaining how the organization generates capital through investing and financing activities from the cash flow statement. The bibliography cites 2 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEwalmtc.rtf
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Unformatted sample text from the term paper:
as financing, by looking at one example Wal-Mart, this creation of capital is well demonstrated. The capital raising activities can be seen though the consolidated cash flow statement. The
first place that capital will originate from are the ongoing operations. Where there is an accumulation of income that is not used to pay expenses then distributed to the shareholders
this will be come retained earnings. For 2003 the net amount before the investing activities is $12,532 million (Wall-Mart, 2003). (All figures are in millions unless otherwise stated.) The
management of the fixed assets impacts on the capital levels. For example, in 2003 there are some disposals, which amount to an inflow of capital of $455. However, other
investing activities sees a depreciation in the underlying capital and an increase in net capital assets. Payments of $9,355 are made for property plant and equipment and $749 in international
operations These will realise value in the accounts in terms of the value they create and an increased income from operations as the investments become active. Many of these investments
appear to be standard operation investments. With net cash used for investing activities of $9,709 this gives us retained earnings of $2,823 (Wall-Mart, 2003). Financing is the next
source of capital. Where a company does not have liquid assets to make the investments is desires, either to plan for the further or take advantage of an opportunity. If
the capital is not within the company it needs to be brought into the company, borrowed for a range of different sources. There are many forms of borrowing, these may
include the use of traditional loans, credit lines, leases, letters of credit, preferences shares and the issuance of corporate bonds. The general acceptance is that longer term borrowing may result
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