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  1. Newbie
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    • Join Date: Oct 2009
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    #1

    I'm confused

    I'm a little confused about the following sentence.

    Current liabilities exceeded current assets at January 31, 2009, by $6.4
    billion, a decrease of $4.0 billion from January 31, 2008, largely due to a
    reduction in commercial paper outstanding at January 31, 2009.


    Does that mean current liabilities decreased by $4.0 billion from January 31, 2008

    or

    the difference between current liabilities and current assets decreased by $4.0 billion to $6.4 billion

    or is it just a bad sentence that could be interpreted in both ways?

    Someone help me please!

  2. misiania's Avatar
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      • Polish
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    #2

    Re: I'm confused

    Quote Originally Posted by kendara View Post
    I'm a little confused about the following sentence.

    Current liabilities exceeded current assets at January 31, 2009, by $6.4
    billion, a decrease of $4.0 billion from January 31, 2008, largely due to a
    reduction in commercial paper outstanding at January 31, 2009.

    Does that mean current liabilities decreased by $4.0 billion from January 31, 2008

    or

    the difference between current liabilities and current assets decreased by $4.0 billion to $6.4 billion

    or is it just a bad sentence that could be interpreted in both ways?

    Someone help me please!
    This means that as at January 31 2008 liabilities were exceeding the current assets by $10.4 billion.
    As at January 31 2009 liabilities are exceeding the current assets by $6.4 billion.
    This gives you a decrease in debt (in liabilities) of $4.0 billion since the previous year (since Jan 31 2008).

    Both underlined seem to be correct. 1st sentence tells you more about the decrease in liabilities, 2nd sentence tells gives you more info (is more focused) on the decrease between the current assets and liabilities.
    You can interpret this in many ways. It all depends which information is more important for the business. Decrease in liabilities or the gap between assets and liabilities.

    I hope this helps. Please note, I am not an english theacher.
    Last edited by misiania; 13-Oct-2009 at 12:00.

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    #3

    Re: I'm confused

    Hi !

    If I understand this correctly. I would say that "the difference between current liabilities and current assets decreased by $4.0 billion to $6.4 billion" is correct.

  3. Newbie
    Student or Learner

    • Join Date: Oct 2009
    • Posts: 6
    #4

    Re: I'm confused

    I managed to find the acutual financial data.

    Wal-Mart Stores, Inc. - Walmart Second Quarter Earnings Exceed Consensus Estimates

    Based on that, the second sentence

    "the difference between current liabilities and current assets decreased by $4.0 billion to $6.4 billion"

    seems to be correct (not the first one).

    But I very much appreciate your kind answer.

    Thank you very much.

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    #5

    Exclamation Re: I'm confused

    Quote Originally Posted by kendara View Post
    I managed to find the acutual financial data.

    Wal-Mart Stores, Inc. - Walmart Second Quarter Earnings Exceed Consensus Estimates

    Based on that, the second sentence

    "the difference between current liabilities and current assets decreased by $4.0 billion to $6.4 billion"

    seems to be correct (not the first one).

    But I very much appreciate your kind answer.

    Thank you very much.
    No,this indicates a net decrease in current liabilities by $4 billions as on 31st Jan’09 (as on both the dates current liability was more than current assents)as explained below.
    As on 31st January’08: current labializes – current assets = X (Say)
    As on 31st january’09: current liabilities – current assets = $6 = X-$4(less/decrease)
    So X = $10 billion which means there is a net decrease in current liabilities by $4 billions and this is a good sign

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