Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
Walmart Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2026 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 27,292 – 11.30% × 174,675 = 7,553
The financial performance from 2021 to 2026 is characterized by a distinct U-shaped recovery in value creation. After an initial period of economic value destruction between 2022 and 2023, a strong upward trajectory in profitability emerged, leading to significant economic profit by the end of the period.
- Net Operating Profit After Taxes (NOPAT)
- A period of contraction is observed between 2021 and 2023, with NOPAT declining from 18,130 million US$ to a low of 13,880 million US$. This trend reversed sharply starting in 2024, with an accelerated growth phase resulting in a peak of 27,292 million US$ by 2026. This represents a substantial recovery in operational earning power.
- Cost of Capital
- The cost of capital exhibits a consistent and incremental upward trend throughout the entire analyzed period. Starting at 10.42% in 2021, the rate rose steadily to reach 11.30% by 2026. This indicates a rising hurdle rate that the company's investments had to overcome to generate economic value.
- Invested Capital
- Invested capital decreased from 164,411 million US$ in 2021 to a minimum of 149,558 million US$ in 2023. Subsequent years show a steady expansion of the capital base, climbing to 174,675 million US$ by 2026. The correlation between the increase in invested capital and the surge in NOPAT after 2023 suggests that new capital allocations were highly productive.
- Economic Profit
- Economic profit shifted from a positive 997 million US$ in 2021 to negative values in 2022 and 2023, reaching a deficit of 2,095 million US$. This phase indicates that the operating returns were insufficient to cover the cost of capital. However, a decisive turnaround occurred in 2024, with economic profit returning to positive territory and expanding rapidly to 7,553 million US$ by 2026, signaling a period of aggressive value creation for shareholders.
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Net Operating Profit after Taxes (NOPAT)
Walmart Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in equity equivalents to consolidated net income attributable to Walmart.
3 2026 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 15,572 × 6.70% = 1,043
4 2026 Calculation
Tax benefit of interest expense, debt and finance lease = Adjusted interest expense, debt and finance lease × Statutory income tax rate
= 3,842 × 21.00% = 807
5 Addition of after taxes interest expense to consolidated net income attributable to Walmart.
6 2026 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 368 × 21.00% = 77
7 Elimination of after taxes investment income.
The financial performance, as indicated by the provided figures, reveals distinct trends in both consolidated net income attributable to Walmart and net operating profit after taxes (NOPAT) over the six-year period. NOPAT demonstrates more volatility than consolidated net income, with fluctuations occurring throughout the observed timeframe.
- NOPAT Trend
- NOPAT experienced a decrease from US$18,130 million in 2021 to US$13,880 million in 2023, representing a decline over two consecutive years. A subsequent recovery began in 2024, with NOPAT reaching US$18,517 million. This upward trajectory continued through 2025 and 2026, culminating in US$27,292 million. The rate of increase accelerated between 2024 and 2026, suggesting improving operational efficiency or revenue generation.
- Relationship between NOPAT and Consolidated Net Income
- While both metrics generally move in the same direction, the magnitude of change differs. Consolidated net income decreased from US$13,510 million in 2021 to US$11,680 million in 2023, a smaller decline than that observed in NOPAT. The subsequent recovery in net income, reaching US$21,893 million by 2026, was also less pronounced in percentage terms compared to the NOPAT recovery. This divergence suggests factors beyond core operational profitability are influencing net income, such as changes in non-operating items or tax rates.
The period between 2021 and 2023 indicates a period of challenge, as evidenced by the declines in both NOPAT and net income. However, the subsequent years demonstrate a strong recovery and growth phase, particularly for NOPAT, indicating a potential improvement in the underlying business performance. The increasing NOPAT values from 2024 onwards suggest a strengthening of the company’s ability to generate profit from its core operations.
- Growth Rates
- The most significant growth in NOPAT occurred between 2025 and 2026, with an increase of approximately US$5,289 million. This represents a substantial acceleration compared to the growth observed between 2024 and 2025. The period from 2021 to 2022 saw a decrease in NOPAT, while the period from 2022 to 2023 also showed a decrease, highlighting the initial challenges faced.
Overall, the figures suggest a business that navigated a period of decline before experiencing a robust recovery and growth phase, with NOPAT demonstrating a particularly strong positive trend in the later years of the observed period.
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Cash Operating Taxes
Walmart Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
The provision for income taxes and cash operating taxes exhibited fluctuating patterns over the observed six-year period. While both metrics moved in similar directions, notable differences in magnitude and specific year-over-year changes were present.
- Provision for Income Taxes
- The provision for income taxes decreased significantly from US$6,858 million in 2021 to US$4,756 million in 2022, representing a substantial reduction. This was followed by an increase to US$5,724 million in 2023, and a more modest increase to US$5,578 million in 2024. Further increases were observed in 2025, reaching US$6,152 million, and again in 2026, culminating in US$7,199 million. Overall, the provision for income taxes demonstrates a general upward trend from 2022 to 2026, although with intermediate fluctuations.
- Cash Operating Taxes
- Cash operating taxes initially increased from US$5,505 million in 2021 to US$6,080 million in 2022. A slight decrease was then recorded in 2023, with the figure falling to US$5,868 million. Subsequent years saw increases, reaching US$6,392 million in 2024 and US$7,482 million in 2025. A notable decrease occurred in 2026, with cash operating taxes reported at US$5,652 million. The trend in cash operating taxes is characterized by volatility, with a peak in 2025 and a subsequent decline in 2026.
- Relationship between Provision and Cash Taxes
- In 2021, cash operating taxes were approximately 79.9% of the provision for income taxes. This percentage increased to 128.1% in 2022, indicating a higher proportion of cash taxes paid relative to the accounting provision. The ratio decreased to 102.1% in 2023, 114.7% in 2024, 121.5% in 2025, and then dropped to 78.4% in 2026. These fluctuations suggest changes in the timing of tax payments, utilization of tax credits, or differences between taxable income and accounting income.
The divergence between the provision for income taxes and cash operating taxes, particularly the significant decrease in cash operating taxes in 2026, warrants further investigation to understand the underlying drivers. The overall trend suggests increasing tax obligations from 2022 to 2026, despite the fluctuations observed in both metrics.
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Invested Capital
Walmart Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of equity equivalents to total Walmart shareholders’ equity.
4 Removal of accumulated other comprehensive income.
5 Subtraction of construction in process.
The reported invested capital exhibited fluctuations over the observed period. Initially, a decrease is noted, followed by a period of stabilization and subsequent growth. A closer examination of the components contributing to invested capital – total reported debt & leases and total shareholders’ equity – provides further insight into these trends.
- Invested Capital Trend
- Invested capital decreased from US$164,411 million in 2021 to US$149,558 million in 2023, representing a cumulative decline of approximately 9.0%. However, beginning in 2024, invested capital began to increase, reaching US$174,675 million by 2026. This represents a growth of approximately 17.5% from the 2023 low.
- Debt & Leases
- Total reported debt & leases decreased from US$63,246 million in 2021 to US$57,323 million in 2022, a reduction of 9.3%. It then experienced a modest increase to US$61,321 million in 2024 before rising more substantially to US$67,095 million in 2026. This suggests a recent shift towards increased reliance on debt financing.
- Shareholders’ Equity
- Total shareholders’ equity increased from US$80,925 million in 2021 to US$83,253 million in 2022, a growth of 3.1%. A decrease was observed in 2023, falling to US$76,693 million. However, shareholders’ equity then demonstrated consistent growth, reaching US$99,617 million in 2026. This indicates a strengthening of the company’s equity position in the later years of the period.
The interplay between debt and equity appears to influence the overall trend in invested capital. The initial decline in invested capital coincided with a decrease in both debt and equity, while the subsequent increase was driven by growth in both components, with a more pronounced increase in shareholders’ equity. The recent increase in debt levels, while contributing to the overall growth in invested capital, warrants further investigation to assess its potential impact on financial risk.
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Cost of Capital
Walmart Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,008,668) | 1,008,668) | ÷ | 1,074,374) | = | 0.94 | 0.94 | × | 11.78% | = | 11.06% | ||
| Debt and finance lease obligations3 | 50,134) | 50,134) | ÷ | 1,074,374) | = | 0.05 | 0.05 | × | 4.40% × (1 – 21.00%) | = | 0.16% | ||
| Operating lease liability4 | 15,572) | 15,572) | ÷ | 1,074,374) | = | 0.01 | 0.01 | × | 6.70% × (1 – 21.00%) | = | 0.08% | ||
| Total: | 1,074,374) | 1.00 | 11.30% | ||||||||||
Based on: 10-K (reporting date: 2026-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 684,238) | 684,238) | ÷ | 742,143) | = | 0.92 | 0.92 | × | 11.78% | = | 10.86% | ||
| Debt and finance lease obligations3 | 43,581) | 43,581) | ÷ | 742,143) | = | 0.06 | 0.06 | × | 4.41% × (1 – 21.00%) | = | 0.20% | ||
| Operating lease liability4 | 14,324) | 14,324) | ÷ | 742,143) | = | 0.02 | 0.02 | × | 6.50% × (1 – 21.00%) | = | 0.10% | ||
| Total: | 742,143) | 1.00 | 11.17% | ||||||||||
Based on: 10-K (reporting date: 2025-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 488,962) | 488,962) | ÷ | 549,135) | = | 0.89 | 0.89 | × | 11.78% | = | 10.49% | ||
| Debt and finance lease obligations3 | 45,743) | 45,743) | ÷ | 549,135) | = | 0.08 | 0.08 | × | 4.28% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 14,430) | 14,430) | ÷ | 549,135) | = | 0.03 | 0.03 | × | 6.40% × (1 – 21.00%) | = | 0.13% | ||
| Total: | 549,135) | 1.00 | 10.91% | ||||||||||
Based on: 10-K (reporting date: 2024-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 375,801) | 375,801) | ÷ | 434,053) | = | 0.87 | 0.87 | × | 11.78% | = | 10.20% | ||
| Debt and finance lease obligations3 | 43,951) | 43,951) | ÷ | 434,053) | = | 0.10 | 0.10 | × | 4.06% × (1 – 21.00%) | = | 0.32% | ||
| Operating lease liability4 | 14,301) | 14,301) | ÷ | 434,053) | = | 0.03 | 0.03 | × | 6.00% × (1 – 21.00%) | = | 0.16% | ||
| Total: | 434,053) | 1.00 | 10.68% | ||||||||||
Based on: 10-K (reporting date: 2023-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 400,219) | 400,219) | ÷ | 462,256) | = | 0.87 | 0.87 | × | 11.78% | = | 10.20% | ||
| Debt and finance lease obligations3 | 47,545) | 47,545) | ÷ | 462,256) | = | 0.10 | 0.10 | × | 3.86% × (1 – 21.00%) | = | 0.31% | ||
| Operating lease liability4 | 14,492) | 14,492) | ÷ | 462,256) | = | 0.03 | 0.03 | × | 5.90% × (1 – 21.00%) | = | 0.15% | ||
| Total: | 462,256) | 1.00 | 10.66% | ||||||||||
Based on: 10-K (reporting date: 2022-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 371,093) | 371,093) | ÷ | 444,270) | = | 0.84 | 0.84 | × | 11.78% | = | 9.84% | ||
| Debt and finance lease obligations3 | 58,802) | 58,802) | ÷ | 444,270) | = | 0.13 | 0.13 | × | 4.05% × (1 – 21.00%) | = | 0.42% | ||
| Operating lease liability4 | 14,375) | 14,375) | ÷ | 444,270) | = | 0.03 | 0.03 | × | 6.10% × (1 – 21.00%) | = | 0.16% | ||
| Total: | 444,270) | 1.00 | 10.42% | ||||||||||
Based on: 10-K (reporting date: 2021-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt and finance lease obligations. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Walmart Inc., economic spread ratio calculation, comparison to benchmarks
| Jan 31, 2026 | Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 7,553) | 3,994) | 1,571) | (2,095) | (1,347) | 997) | |
| Invested capital2 | 174,675) | 161,279) | 155,389) | 149,558) | 156,225) | 164,411) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 4.32% | 2.48% | 1.01% | -1.40% | -0.86% | 0.61% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Costco Wholesale Corp. | — | 5.75% | 6.44% | 1.64% | 5.72% | 4.12% | |
| Target Corp. | -4.52% | -3.09% | -2.14% | -3.91% | 8.76% | -0.71% | |
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2026 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 7,553 ÷ 174,675 = 4.32%
4 Click competitor name to see calculations.
Analysis of value creation metrics reveals a significant recovery cycle beginning in 2024 following a period of value erosion between 2022 and 2023. The trajectory indicates a transition from negative economic returns to a state of accelerating capital efficiency.
- Economic Profit Trends
- A volatile trend is observed in economic profit, which started at 997 million USD in 2021 before declining into negative territory for two consecutive years, reaching a trough of -2,095 million USD in 2023. A strong reversal occurred in 2024, with profit returning to 1,571 million USD and experiencing rapid growth thereafter, reaching a projected 7,553 million USD by 2026.
- Invested Capital Dynamics
- Invested capital experienced a gradual contraction from 2021 to 2023, falling from 164,411 million USD to 149,558 million USD. This downward trend reversed in 2024, entering a phase of steady expansion that culminates in a projected 174,675 million USD by 2026, indicating a strategic increase in the capital base to support expanding operations.
- Economic Spread Ratio Performance
- The economic spread ratio demonstrates a clear correlation with economic profit, shifting from a positive 0.61% in 2021 to a minimum of -1.40% in 2023. The negative values during this interval signify that the return on invested capital was insufficient to cover the cost of capital. A robust recovery is evident from 2024 onward, with the ratio climbing to 1.01%, 2.48% in 2025, and 4.32% by 2026, reflecting a substantial improvement in the company's ability to generate value above its cost of capital.
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Economic Profit Margin
Walmart Inc., economic profit margin calculation, comparison to benchmarks
| Jan 31, 2026 | Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 7,553) | 3,994) | 1,571) | (2,095) | (1,347) | 997) | |
| Net sales | 706,413) | 674,538) | 642,637) | 605,881) | 567,762) | 555,233) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 1.07% | 0.59% | 0.24% | -0.35% | -0.24% | 0.18% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Costco Wholesale Corp. | — | 0.81% | 0.85% | 0.24% | 0.81% | 0.61% | |
| Target Corp. | -1.63% | -1.05% | -0.68% | -1.08% | 2.49% | -0.23% | |
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 Economic profit. See details »
2 2026 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × 7,553 ÷ 706,413 = 1.07%
3 Click competitor name to see calculations.
The financial performance regarding economic value creation exhibits a V-shaped recovery over the analyzed six-year period. While top-line revenue maintained a consistent growth trajectory, the ability to generate returns exceeding the cost of capital fluctuated significantly, shifting from positive to negative before entering a phase of accelerated expansion.
- Net Sales Performance
- A continuous upward trend in net sales is observed, increasing from 555,233 million USD in January 2021 to 706,413 million USD by January 2026. This steady progression indicates a consistent expansion of the revenue base regardless of the fluctuations in economic profit.
- Economic Profit Trajectory
- Economic profit experienced a period of contraction and deficit, falling from 997 million USD in 2021 to a peak deficit of 2,095 million USD in 2023. A strong reversal is noted starting in 2024, with economic profit returning to positive territory at 1,571 million USD and growing exponentially to 7,553 million USD by 2026.
- Economic Profit Margin Trends
- The economic profit margin mirrors the volatility of the absolute economic profit. The margin declined from 0.18% in 2021 to a low of -0.35% in 2023, indicating a period where the company did not generate sufficient returns to cover its cost of capital. Following this trough, the margin expanded consistently, reaching 0.24% in 2024 and peaking at 1.07% in 2026, reflecting a substantial improvement in capital efficiency and value generation.
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