Analysis of Wal-Mart Financial Statement for Year Ended January 31, 2004

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Analysis of Wal-Mart Financial Statement for Year Ended January 31, 2004

The consolidated financial statements include the accounts of Wal-Mart Stores, Inc. and its subsidiaries. Significant inter company transactions have been eliminated in consolidation. investments in which Wal-Mart has a 20 per cent to 50 percent voting interest and which Management control are accounted for using the equity method.

The management at Wal-Mart has developed and maintains a system of internal and disclosure controls, including an extensive internal audit program. Those controls are designed to provide reasonable assurance that the Company's assets are protected from improper use and that Wal-Mart's accounting records provide a reliable basis for the preparation of financial statements. They continually review, improve and modify their systems and programs in response to changes in business conditions and operations and on the recommendations that are made by Wal-Mart's internal and external auditors. They believe that the system of internal and disclosure controls provides reasonable assurance that Wal-Mart's assets are safeguarded and that the financial information disclose is reliable.

Wal-Mart considers investments with a maturity of three months or less when purchased to be cash equivalents. The majority of payments due from banks for third-party credit card, debit card and electronic benefit transactions ("EBT") process within 24-48 hours, except for transactions occurring on a Friday, which are generally processed on Monday. All credit card, debit card and EBT transactions that process in less than seven days are classified as cash and cash equivalents. Amounts due from banks for these transactions classified as cash totaled $866 million at the end of January 31, 2004.

Their accounts receivables consist primarily of receivables from insurance companies generated by their pharmacy sales, receivables from real estate transactions and receivables from suppliers for marketing or incentive programs. Additionally, amount due from banks for

customer credit card, debit card and EBT transactions that take in excess of seven days are classified as accounts receivables.

Wal-Mart values their inventory at the lower of cost market as determined primarily by the retail method of accounting, using the last-in, first-out ("LIFO") method for substantially all domestic merchandise inventories, except SAM"S CLUB merchandise, which is based on average cost using LIFO method. Inventories of foreign operations are primarily valued by the retail method of accounting, using the first-in, first-out ("FIFO") method. Their inventories at FIFO did not exceed inventories at LIFO by a significant amount.

The management of Wal-Mart Stores, Inc is responsible for the integrity and objectivity of the financial statements and other information presented in their reports, The financial statements were prepared in conformity with accounting principles generally accepted in the United States. The preparation of financial statements requires certain estimates and judgments, which are based upon currently available information and management's view of current conditions and circumstances.