Fiscal Year of the Companies
Zynga’s (ZNGA) fiscal year runs from Jan. 1 to Dec. 31, and Walmart’s (WMT) from Feb. 1 to Jan. 31, so the most recently available reports for the fiscal year 2021 are reviewed. These corporations use different business models and represent different industries. Namely, Walmart is engaged in retail and represents a wide range of goods and a chain of stores, while Zynga develops and supports online games, mainly for mobile platforms. That said, given the standardization of Form 10-K for businesses, many balance sheet items are available daily.
Common Balance Sheet Items Between the Two Companies
Among the common ones, one should highlight the leading indicators: equity capital, property and equipment, short-term and long-term debt, accounts receivable and payable, and cash and cash equivalents. Equity in both companies refers to the share of assets after deducting liabilities and includes retained earnings, shares above par value, and other types of income. Property defines long-term assets as occupied land, buildings, and equipment.
Debt includes the obligation to repay the invested funds within a year and over a few years. Accounts payable and receivable are responsible for goods delivered in both directions that have not yet been paid and are present at Zynga and Walmart (Shette 8). Cash, in turn, measures the financial capacity of both corporations and implies available finances, including highly liquid short-term investments.
Key Differences in Balance Sheet Accounts and Their Underlying Reasons
One of the significant differences in the performance of the two companies under consideration is the balance sheet inventory account. Given the difference in the companies’ operations, the availability of goods for sale is the domain of Walmart, while Zynga’s core products are virtual. Moreover, these volumes are also related to the nature of the corporation’s business operations: Walmart has many physical and online stores and requires more logistical effort and assortment.
In addition to inventory, Zynga likewise has significantly less equipment and property, concentrating on digital assets. Moreover, Zynga’s level of investment is relatively lower, contributing to much less long-term debt than Walmart’s. This occurrence can be explained by the lack of many contributors to physical assets as it exists for Walmart (Shette 16). Thus, such differences highlight the differences in the corporations’ business models and can demonstrate the development prioritization depending on the industry.
Work Cited
Shette, Rachappa. Accounting Simplified. SAGE Publications, 2021, Web.