ACC502 Accounting Practices : Essay Fountain

Question:

The purpose of this assignment is to apply managerial accounting concepts and practices and use financial data to make business decisions.

Throughout the course, you have used the annual report from a Fortune 500 company to apply financial accounting concepts, including analysis of income statements and balance sheets, to evaluate the profitability and overall financial position of the company.

For this assignment, consider the research and analysis from prior assignments and apply the “Conceptual Framework for Managerial Costing,” as discussed in the topic materials. Follow the process outlined in the “Where to Start” section of this topic resource. Assume the company is considering making a change, such as adding a new product or entering new markets.

Your task is to determine what the “change” could be and the steps that would need to be taken in the decision-making process.

Memo to the chief operating officer (COO) of the company, address the following.

1. Summarize the proposed change the company is considering.
2. Discuss the specific information that must be collected to perform the analysis on the proposed change.
3. Discuss the scope of the analysis and what parameters will be used to determine whether the proposed change should be made.

 

Answer:

To : The Chief Operating Officer, Walmart Inc.

From : [Enter Your Name]

Date : 16th October 2019

Re : Recent Changes in Walmart Inc.

Walmart Inc. is planning to refrain from selling some types of ammunition after the recent shootings that led to the death of 22 people at one of its big stores. The company’s Executive Committee has acknowledged that Walmart would consider discontinuing the sale of some types of bullets which criminals can use in their assault-style weapons and handguns to kill people. Walmart Inc. has been the largest seller of firearms in the U.S. as well. The company has declared that it intends to stop selling handguns in Alaska, which is the only place that it offered the weapons. Customers at the company, as well as its Sam’s Club stores were asked to refrain from carrying firearms openly even in states which legally permitted them. The Chief Executive Officer declared that deeds could result in fear as well as evacuations (Tranakas, 2019).

Although some of the customers are unhappy with the firm’s decision, several celebrities, democrats, and politicians have praised the company for its decision to stop the sale of the weapons at its stores. However, the gun lobby of America, the National Rifle Association, referred to the company’s decision as shameful, stating that it would lead to significant loss of business (Massengill, 2018).

To analyze the proposed change, Walmart Inc., must collect some vital information. For instance, it must determine the effect of the change on the sales of the company as well as its projected profits (Brunn, 2016). The company must also consider the safety of its customers and employees. There is no need to expose them at risk of killings due to the pursuit of profits from handgun sales. The executive management of Walmart, although they knew the impact of this change on the company’s business, even called on the US Congress to make stricter laws on guns (Tranakas, 2019).

Walmart Inc. can use various parameters to determine if the proposed change is viable for implementation. Walmart’s CEO acknowledged that the proposed change would reduce the share of the company in the ammunition market from approximately twenty percent to nine percent (Massengill, 2018). The announcement changed the stock of Walmart. For instance, its shares in some gun-makers including Vista Outdoors reduced. However, the management of Walmart said that guns, as well as ammunition, only represents a small percentage of the overall sales of the company. The management also predicted that the decision would pay off, and allow the retailer to offer more storage space to promote the sale of fast-growing divisions such as baby nappies. According to Walmart’s management also, the company’s growth in sales will continue being significantly ahead of that of its competitors due to its significant profitable share as well as market share growth in children and health business divisions (Tranakas, 2019). The competitive prices of the company will likely help customers remain loyal to it. Therefore, the management perceives the proposed change as acceptable (Freeman, 2010).

 

References

Brunn, S. D. (2016). Wal-Mart World: The World’s Biggest Corporation in the Global Economy. Oxfordshire, England: Taylor & Francis.

Freeman, R. E. (2010). Strategic Management: A Stakeholder Approach. Cambridge, England: Cambridge University Press.

Massengill, R. P. (2018). Wal-Mart Wars: Moral Populism in the Twenty-First Century. New York, NY: NYU Press.

Tranakas, P. (2019). Wal-Mart Stores, Inc., Global Retailer case study, THE GUIDE edition. Morrisville, NC: Lulu.com.

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