THE FINANCIAL REPORTING CASE __Walgreen co._____________________________
Name of the company (PRINT)
First Name________________________________ Section No.: ______
a. ALL answers must be fitted, using blue ink, in the spaces provided and on the line(s)
drawn for each question.
b. Your ability to understand and follow the instructions herein is a factor in grading your
c. The report neatness and legibility have 10% of the points for the report.
d. Your primary source should be the form 10-K for your company.
A. General Information (4 points)
1. The company’s fiscal year ends on what date?
___August 31st ___________
Address of the Company’s Headquarter: __ 200 Wilmot Road, Deerfield, Illinois. Zip code: 60015.__________________
Nature of the Company’s business:
Walgreen Co. together with its subsidiaries operates the largest drugstore chain in the United States. They provide their customers with convenient, multichannel access to consumer goods and services, and pharmacy, health and wellness services in communities across America. They offer their products and services through drugstores, as well as through mail, by telephone, and via the Internet.
Basically they sell prescription and non-prescription drugs as well as general merchandise, including household products, convenience foods, personal care, beauty care, candy, photofinishing and seasonal items. Their pharmacy services includes retail, specialty, infusion, medical facility, long- term care and mail service, along with pharmacy benefit solutions and respiratory services.
What is the company’s standard industry classification? (Give both)
Standard Industry Name: RETAIL-DRUG STORES AND PROPRIETARY STORES
Standard Industry Code (4-digits): 5912
B. Investments (6 points)
1. What is (are) the classification(s) and amount of any investment in securities reported in the
company’s Financial Statements and/or the Notes attached thereto (i.e. Trading Securities, Available-for-
sale, etc., as covered in the Investments chapter of the textbook)?
2. Where are the unrealized gains or losses from investments in available-for-sale securities
reported? (Mark with X)
In the shareholders’ equity section
In the footnotes
What is the amount?
3. Which methods of accounting are used for the above investments in securities? List.
C.) Liabilities (6 points)
1. What are the total liabilities reported on the balance sheet?
2. Calculate the debt to total assets ratio for (use the formula from your textbook):
Last Year___0.45________ Current Year ____0.43______
3. What is the industry average debt/total assets ratio for the current year? 0.4_______
(The industry averages are available in the Reference Section of the library; ask attendants
for referral. Use the SIC you gave in part “A” to find the average.)
ACCT 302—Spring 2011
D. Leases (6 points)
1. From the disclosure notes, determine:
Types of leases (based on the Chapter on Leases)
Amount of the
lease obligation, if any.
2. What did the company report as its future minimum annual rental commitments under
E. Stockholders’ Equity (8 points)
1. At the end of the year, how many shares of common stock did the company have in the following categories?
2. What is the par value per share of the common stock?
3. Does the company have any treasury stock? Yes / No (circle one); if yes:
How many shares?
What is the amount?
_ 929,744,049 _____________
____ $0.0625 __________
4. Did the company split its stock in the current year?
If yes, in what ratio?
ACCT 302—Spring 2011
Yes / No (circle one) No
F. Compensations (10 points)
1. From the proxy statement filed with the SEC, what was the total annual monetary compensation paid to
the company’s Chief Executive Officer? (Salary plus cash bonuses)
2. From the disclosure notes, find the following pension information for the current year:
Type of pension plan (Defined Benefit or Defined Contribution, or both):
Cash contributions made into the plan by the company ___________________________
The balance of Projected Benefit Obligation (PBO) ___________________________
The interest rate used in estimating the PBO
What is the year-end funded status of the company?
Show the amount:
3. Does the company have any stock compensation plans?
Yes / No (circle one); if yes:
a. What are the types of plans? List
b. What additional information does the company provide in its footnotes about the compensation
plans? (Be brief)
It is pertinent to close Nice 2 since according to the operating profits obtained in all the case scenarios, they are by far better in relation to when both Nice 1 and Nice 2 are operational. That is,
|Scenario||Operating profit (000€)||Total (000€)|
|Nice 1 without renovations||163||163|
|Nice 1 with renovations year 2010||205.5||205.5|
|Nice 1 with renovations year 2011-2014||249||249|
It is important to further note that Nice 2 was recently acquired and thus it still experiencing “teething problems” that may include getting a loyal clientele. Given a chance, Nice 2 may over time attain a better operating profit of more than € 75,00 which is Nice 1s’ considering it has been around for 20 years whereas Nice 2 was just recently acquired and attained an operating profit of € 34,000!
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