Profitability Analysis

Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).


Ratios (Summary)

Wal-Mart Stores Inc., profitability ratios

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Return on Sales
Gross profit margin 24.31% 24.38% 24.50% 24.74% 24.78% 23.70%
Operating profit margin 5.68% 5.96% 5.98% 6.10% 5.91% 5.68%
Net profit margin 3.39% 3.65% 3.54% 3.91% 3.54% 3.34%
Return on Investment
Return on equity (ROE) 21.01% 22.27% 22.01% 23.91% 20.26% 20.53%
Return on assets (ROA) 7.83% 8.37% 8.12% 9.07% 8.40% 8.20%

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Wal-Mart Stores Inc.'s gross profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Wal-Mart Stores Inc.'s operating profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Wal-Mart Stores Inc.'s net profit margin improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
ROE A profitability ratio calculated as net income divided by shareholders' equity. Wal-Mart Stores Inc.'s ROE improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
ROA A profitability ratio calculated as net income divided by total assets. Wal-Mart Stores Inc.'s ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Gross Profit Margin

Wal-Mart Stores Inc., gross profit margin calculation

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Gross profit 115,007  113,626  108,727  103,665  100,389  95,086 
Net sales 473,076  466,114  443,854  418,952  405,046  401,244 
Ratio
Gross profit margin1 24.31% 24.38% 24.50% 24.74% 24.78% 23.70%

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 115,007 ÷ 473,076 = 24.31%

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Wal-Mart Stores Inc.'s gross profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.

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Operating Profit Margin

Wal-Mart Stores Inc., operating profit margin calculation, comparison to benchmarks

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Operating income 26,872  27,801  26,558  25,542  23,950  22,798 
Net sales 473,076  466,114  443,854  418,952  405,046  401,244 
Ratio
Operating profit margin1 5.68% 5.96% 5.98% 6.10% 5.91% 5.68%
Benchmarks
Operating Profit Margin, Competitors
Amazon.com Inc. –% 1.00% 1.11% 1.79% 4.11% 4.61%
Target Corp. 5.83% 7.46% 7.77% 7.98% 7.37% 7.00%
Operating Profit Margin, Sector
Broadline Retailers –% 5.54% 5.68% 5.94% 5.97% 5.80%
Operating Profit Margin, Industry
Consumer Services –% 8.05% 7.78% 8.02% 7.66% 6.32%

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 26,872 ÷ 473,076 = 5.68%

Ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Wal-Mart Stores Inc.'s operating profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.

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Net Profit Margin

Wal-Mart Stores Inc., net profit margin calculation, comparison to benchmarks

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Consolidated net income attributable to Walmart 16,022  16,999  15,699  16,389  14,335  13,400 
Net sales 473,076  466,114  443,854  418,952  405,046  401,244 
Ratio
Net profit margin1 3.39% 3.65% 3.54% 3.91% 3.54% 3.34%
Benchmarks
Net Profit Margin, Competitors
Amazon.com Inc. –% 0.37% -0.06% 1.31% 3.37% 3.68%
Target Corp. 2.72% 4.17% 4.28% 4.44% 3.92% 3.52%
Net Profit Margin, Sector
Broadline Retailers –% 3.31% 3.24% 3.74% 3.58% 3.38%
Net Profit Margin, Industry
Consumer Services –% 5.14% 4.59% 4.87% 4.54% 3.85%

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 Net profit margin = 100 × Consolidated net income attributable to Walmart ÷ Net sales
= 100 × 16,022 ÷ 473,076 = 3.39%

Ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Wal-Mart Stores Inc.'s net profit margin improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Return on Equity (ROE)

Wal-Mart Stores Inc., ROE calculation, comparison to benchmarks

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Consolidated net income attributable to Walmart 16,022  16,999  15,699  16,389  14,335  13,400 
Total Walmart shareholders' equity 76,255  76,343  71,315  68,542  70,749  65,285 
Ratio
ROE1 21.01% 22.27% 22.01% 23.91% 20.26% 20.53%
Benchmarks
ROE, Competitors
Amazon.com Inc. –% 2.81% -0.48% 8.13% 16.78% 17.16%
Target Corp. 12.14% 18.11% 18.51% 18.85% 16.21% 16.15%
ROE, Sector
Broadline Retailers –% 19.75% 19.50% 21.72% 19.34% 19.60%
ROE, Industry
Consumer Services –% 17.83% 15.66% 15.82% 13.88% 12.34%

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 ROE = 100 × Consolidated net income attributable to Walmart ÷ Total Walmart shareholders' equity
= 100 × 16,022 ÷ 76,255 = 21.01%

Ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders' equity. Wal-Mart Stores Inc.'s ROE improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Return on Assets (ROA)

Wal-Mart Stores Inc., ROA calculation, comparison to benchmarks

 
Jan 31, 2014 Jan 31, 2013 Jan 31, 2012 Jan 31, 2011 Jan 31, 2010 Jan 31, 2009
Selected Financial Data (USD $ in millions)
Consolidated net income attributable to Walmart 16,022  16,999  15,699  16,389  14,335  13,400 
Total assets 204,751  203,105  193,406  180,663  170,706  163,429 
Ratio
ROA1 7.83% 8.37% 8.12% 9.07% 8.40% 8.20%
Benchmarks
ROA, Competitors
Amazon.com Inc. –% 0.68% -0.12% 2.50% 6.13% 6.53%
Target Corp. 4.42% 6.23% 6.28% 6.68% 5.59% 5.02%
ROA, Sector
Broadline Retailers –% 6.96% 6.82% 7.99% 7.68% 7.46%
ROA, Industry
Consumer Services –% 7.20% 6.41% 6.69% 6.35% 5.53%

Source: Based on data from Wal-Mart Stores Inc. Annual Reports

2014 Calculations

1 ROA = 100 × Consolidated net income attributable to Walmart ÷ Total assets
= 100 × 16,022 ÷ 204,751 = 7.83%

Ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Wal-Mart Stores Inc.'s ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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