Capital, Cash Flow and Notes AnalysisIntroductionThe success of a business entity depends on its ability to correctly create, understand and analyze financial statements. Financial statement analysis is important in understanding the profitability and financial condition of a company. These documents help a company in many ways, such as making better financial decisions and creating a clearer picture to attract creditors and investors. In highlighting Wal-Mart's financial numbers, Team A will examine the owner's capital and cash flows of the company ending its fiscal period on January 31, 2004. Supporting explanatory notes will help provide the analysis needed to understand the 'agency. and to affirm our position in support of the Wal-Mart philosophy that makes it a thriving company. Statement of Owner's Equity The statement of changes in owner's equity shows the changes that have occurred in the amount of owner's equity over a period of time. The statement begins with the amount of owner's equity as of a specific balance sheet date and summarizes the additions and subtractions from that amount during a specific time period. The owners¡¦ statement of equity reports both changes in the owners' investments in the business and changes in retained earnings for the business. Another important function of this statement is to link the income statement to the balance sheet. The owners¡¦ statement of equity is usually the shortest and least complicated of the financial statements. The most common modification is the retained earnings account. If the company makes a profit, retained earnings increase unless all profits are paid out in the form of dividends or withdrawals by the owners. The two accounts that normally appear on this statement are......in the middle of the sheet......l-Mart statements you will notice that the financial information for all years has been restated to reflect the sale of McLane Company, Inc. that occurred in fiscal year 2004. It is presented as a discontinued operation on the cash flow statement. Other information includes items that reflect any accounting changes. In fiscal year 2003, Wal-Mart adopted Statement No. Financial Accounting Standards Board Rule 142, “Goodwill and Other Intangible Assets.” In previous years they had recorded depreciation expenses related to goodwill. This is one way to explain changes that can be observed in the numbers but are not that obvious. Table 1 Table 2 References Marshall, D. (2003). Accounting: What the Numbers Mean, Sixth Addition. McGraw Hill Companies Annual Report.Wal-Mart.(2004). Retrieved May 17, 2004, from the World Wide Web at https://www.walmart.com.