Walmart Financial Statement and Financial Ratios Analysis

Walmart 2023 - Brief Company Summary

Walmart, the world's largest retailer, is a multinational corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Founded in 1962 by Sam Walton, Walmart has grown into a household name known for its wide range of products at affordable prices. With its headquarters in Bentonville, Arkansas, Walmart has a vast presence across the globe, serving millions of customers each day.

The company's mission is to help people save money and live better, aiming to provide convenient access to quality goods and services. Walmart offers a diverse selection of merchandise, including groceries, apparel, electronics, home goods, and more. Through its commitment to low prices and a vast network of suppliers, Walmart strives to offer value to its customers while supporting communities and creating economic opportunities.

Walmart embraces innovation and digital transformation, leveraging technology to enhance the shopping experience for customers both in-store and online. With a focus on sustainability, the company aims to reduce its environmental footprint and promote responsible practices throughout its operations.

Overall, Walmart's customer-centric approach, expansive product offerings, and dedication to affordability have made it a prominent player in the global retail industry.

From a financial perspective, as of 2023, Walmart’s market capitalization is $426 billion.  The organization’s beta is .5.  A beta below 1.0 indicates that the company's stock is less risky as compared to the overall market.  Walmart’s current stock price is $156.81.  The organization’s current dividend yield is approximately 1.47%.  Finally, important competitors for the organization would be Target as well as Amazon.com (6/23).

Walmart Financial Report Sources

"Walmart 2021 Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by Paul Borosky, MBA., doctoral candidate and owner of Quality Business Plan.  In this summarized book, the author researched Walmart's 10k, Walmart's 2017 10k annual report, Walmart's 2021 10k annual report, Walmart's 2020 10k annual report, and Walmart's 2019 10k annual report as the basis for information gathering.  Once all Walmart's 10k annual statements were collected, the author then inserted Walmart's income statement information and Walmart's balance sheet information into a customized financial template. 

 

 

Section 1: Walmart Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc., in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Walmart's important income statement line item trends from 2018 to 2023, in most cases.

Revenue Growth:

Walmart’s revenues for the last five years have increased steadily.  On average, revenue growth over this time frame was 3.1%.  For a multinational organization, this would be considered about average.  However, the impressive aspect of its revenue growth would be its consistency in positive growth over this time frame.

Analyst Grade: A

Walmart 2023 Summary Income Statement
Column1	2023	2022	2021	2020	2019
Revenues	611,289	572,754	559,151	523,964	514,405
COGS	463,721	429,000	420,315	394,605	385,301
Gross Profit	147,568	143,754	138,836	129,359	129,104
SG&A	127,140	117,812	116,288	108,791	107,147
Depreciation	10,945	10,658	11,152	10,987	10,678
R & D	-	-	-	-	-
Other	-	-	-	-	-
Total Operating Expenses	138,085	128,470	127,440	119,778	117,825
EBIT	20,428	25,942	22,548	20,568	21,957
Other Income				-	-
Interest Expense	1,874	1,836	2,194	2,410	2,129
EBT	17,016	18,696	20,564	20,116	11,460
Taxes	5,724	4,756	6,858	4,915	4,281
Net Income	11,680	13,673	13,510	14,881	6,670

 

Walmart Balance Sheet Analyzed

For Walmart's balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define the balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2017 to 2021.  Next, I then offer an analysis of Walmart's important balance sheet line item.

Cash:

Walmart’s cash position between 2018 and 2020 was approximately 1.3 to 1.8% of sales.  However, in 2021, the organization’s cash position as compared to sales increased significantly to 3.2% of sales.  This increase may have been due to the organization’s concerns about the Covid-19 pandemic and their desire to have an increased cash buffer.  Further, this hypothesis may be supported because, in 2022, the organization’s cash position as compared to sales decreased to 2.6% of sales.  If this trend continues, then investors should expect a cash position in the future within the range of 1.3% to about 1.8%.

Analyst Grade: A

Walmart 2023 Summary Balance Sheet
Column1	2023	2022	2021	2020	2019
Cash	8,625	14,760	17,741	9,465	7,722
Short Term Investment	-	-	-	-	-
Account Receivable	7,933	8,280	6,516	6,284	6,283
Inventory	56,576	56,511	44,949	44,435	44,269
Other	-	-	-	-	-
Current Assets	75,655	81,070	90,067	61,806	61,897
Net PPE	100,760	94,515	92,201	105,208	104,317
Goodwill	28,174	29,014	28,983	31,073	31,181
Other	-	-	-	-	-
Total Assets	243,197	244,860	252,496	236,495	219,295
Accounts Payable	53,742	55,261	49,141	46,973	47,060
Accrued Expense	31,126	26,060	37,966	22,296	22,159
Accrued Taxes	727	851	242	280	428
Notes Payable	372	410	224	575	5,225
LT Debt - Current	4,191	2,803	3,115	5,362	1,876
Other		-	-	-	-
Total Current Liabilities	92,198	87,379	92,645	77,790	77,477
LT Debt	34,649	34,864	41,194	43,714	50,203
Other		-	-	-	-
Total Liabilities	159,443	152,969	164,965	154,943	50,203
Common Stock	5,238	5,115	3,928	3,531	3,253
Treasury	-	-	-	-	-
Retained Earnings	83,135	86,904	88,763	83,943	80,785
Other	-	-	-	-	-
Total Equity	83,754	91,891	87,531	81,552	79,634
Total Equity & Liability	243,197	244,860	252,496	236,495	219,295

 

 

Walmart's Financial Ratio Summary

For this section, I have chosen several different financial ratios to review for Walmart from 2017 to 2021.  In reviewing each of Walmart's financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Walmart's Important Financial ratios. 

Walmart's Current Ratio: 

Walmart’s current ratio has increased from .79 in 2020 to .93 and 2022.  The increase in the organization’s current ratio during a pandemic is a smart move, in my opinion.  The increased current ratio shows that the firm may be increasing its cash position to ensure liquidity for the short term.

Analyst Grade: A

Walmart's Total Asset Turnover: 

Walmart’s total asset turnover ended 2018 at 2.48.  In the next four years, the organization would decrease its total asset turnover ending 2021 at 2.21.  Fortunately, the organization would improve its asset utilization and end 2022 at a 2.3 total asset turnover.  If this trend continues, then it may indicate the company has achieved its cost-cutting objectives over the last several years and is ready to move forward with growth.

Analyst Grade: A-