This addresses how to read and compare annual reports.
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With respect to the three reports in comparison: Income Statement, Cash Flow Statement, and Balance Sheet how can I "zero" in, or in laymen's terms, do an efficient comparison.
I cannot give too much detail. I am seeking the valuation method for Sears, Wal Mart & Target, including types of inventory and fiscal year-end dollar values. All this information is on the annual report for each company. These reports are extremely long. One would imagine most frequently required information is in plain sight. Seeking to know how to quickly & efficiently read annual reports
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Solution Summary
The solution explains how to read and compare annual reports of companies in the same industry.
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I will go over Target's report with you and that will give you an idea of how to do the same with the other two companies. The easiest thing to do to determine valuation methods for inventory is to use the search function (usually control F) and to search for the word "inventory." When we do this on Target's annual report, we eventually come to their inventory valuation method which states,
"We use the retail inventory method to account for substantially all inventory and the related cost of sales. Under this method, inventory is stated at cost using the last-in, first-out (LIFO) method as determined by applying a cost-to-retail ratio to each merchandise grouping's ending retail value. Cost includes the purchase price as adjusted for vendor income. Since inventory value is adjusted regularly to reflect market
conditions, our ...
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