Walgreen's Footnote analysis

Foot none Analysis Walgreens Co. It is crucial when perform an analysis of financial statements to consider the footnotes to recognize the flesh surface of a company which atomic number 18 not say in the basic 10K annual report. These details can be defense team to re-compute data and reveal cultivation which is not directly stated in the statements. After analyzing the notes for Walgreens (WAG) management presents the company in a generally buttoned-up manner allowed by generally accepted story principles but has certain aspects which demo some aggressive reporting of information. Walgreens operates their stock list on a last- in, for the first time- out method to measure their inventory and damage of goods sold. This is a conservative bill choice for management during the menstruation period of rising termss. steady though we are not experiencing as drastic of price developments as in the retiring(a) because of the economic environment, last in first out will portray a more(prenominal) conservative utter(a) income and balance sheet. It is also beneficial for valuate purposes because of the increase of cost of goods sold. As a result of the increase of cost of goods sold, income before taxes declines and Walgreens pays less income tax than if they were to use the first-in, first-out method. Traditionally, companies using last in first out are valued more exceedingly than those who use first in first out during periods of rising prices.

Walgreens also offers analysts the LIFO Reserve, which is the difference among what the inventory is using L IFO as opposed to if first in first out was ! used. As of 2007 and 2008, Walgreens inventories would have been great by $1,067 billion $969 million respectively using a FIFO accounting method. Walgreens primary competitor, CVS, uses a faction of three inventory methods for each of their different business segments. They give FIFO for their CVS/chemists locations, average cost for their mail function and specialty pharmacies, and are converting their Longs Drug Stores to the retail method in 2009. This is a in truth unique method which is...If you want to bunk a good essay, order it on our website: BestEssayCheap.com

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