Wal-Mart vs. Target

In 1962, America experienced a major shift in how people were doing business.  Small specialty shops were about to fade with the introduction of large discount retail stores offering more of what the consumer needed, located in a one-stop shop.  Along with K-Mart, Target and Wal-Mart were to change the face of shopping forever.

Wal-Mart, founded in Rogers Arkansas, was an innovative force in discount retail stores.  Sam Walton and his wife, Helen, began the store putting up 95% of the start-up costs.  Their meager beginnings shed little light on the massive influence they have on today’s market.  Wal-Mart (stock symbol WMT) owns Wal-Mart optical, Wal-Mart Pharmacy, Tire and Lube Express (TLE) and of course the Super Wal-Mart grocery store.  They also service over 15 other nations and run a service to ship Wal-Mart products to people in Alaska through the “Wal-Mart Bush Shopper” program. On top of this, they own Sam’s Club, which is a bulk discount shop.

Ernst and Young, LLC audit the books of Wal-Mart with a fiscal year ending January 31st.  The financial statements are stated in the millions, excepting the per share data.  The information on these reports includes business conducted through the Wal-Mart corporations an all of its subsidiaries.  They also mention the need to use a December 31st fiscal year for operations in Argentina, Japan and Mexico to name a few.  They claim this has no effects on the financial statement accuracy.  Wal-Mart uses the LIFO method of inventory excepting Sam’s Club, which uses the Cost LIFO method instead.

Target Corporation has similar beginnings to Wal-Mart.  Begun in 1962 in Roseville, Minnesota, they now offer Target optical, Target Pharmacy, Food Avenue fast food restaurant located within the stores and their version of the grocery store – Super Target.  Orientated to upscale middle-class people, Target (stock symbol TGT) seeks to offer trendy, stylish items in a clean friendly atmosphere.

Ernst and Young, LLC also handle the accounting for Target Corporation.  Their fiscal year runs until the Saturday nearest January 31st of each year, 2006 being January 28th.  The information is presented in the millions excepting the per share data.  In 2004, Target sold off its Marshall Fields and Mervyn’s lines of product and according to their financial statement and this information is listed as discontinued operations.  Target also uses the LIFO method of inventory analysis.

The Financial Accounting Standards board (FASB) issued FAS 123-R requires that all share-based compensation be accounted for using a fair-value based method.  This standard affected both Target and Wal-Mart in that all previous years of compensation had to be restated to reflect the change.  Both indicate the implications were not noticeable.

Although each company operates under the same pretense, each caters to a different clientele and this is reflected in their financial statements.  Target offers a lengthy description of which accounting procedures have changed and which show an immediate influence upon these records.  Wal-Mart uses fine print to disclose this information and does not go into detail.  Both companies’ offer online annual reports, which resemble commercial ads for their community, service, targets being more information-based in the end.


Target, H. (2006). Target corporation: Investors. Retrieved October 25, 2006, from http://investors.target.com/phoenix.zhtml?c=65828&p=irol-irhome&ref=nav2_footer_investors

Wal-Mart, Inc. (2006). Wal-Mart stores: Student research information.. Retrieved October 25, 2006, from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=462