Walmart Inc. (NYSE:WMT)

Current Tax Provision

The current tax provision demonstrates a consistent upward trend over the examined period. Beginning at 4,586 million US dollars in January 2020, it gradually increased each year, reaching 6,815 million US dollars by January 2025. This steady increase suggests continued growth in taxable income or higher tax rates impacting the current tax liability.

Deferred Tax Expense (Benefit)

The deferred tax expense shows considerable volatility and alternating signs throughout the period. Initially, it increased from 329 million US dollars in January 2020 to a peak of 1,998 million in January 2021, indicating a significant deferred tax expense. However, in January 2022, the figure turned negative to -759 million, representing a deferred tax benefit. This pattern of fluctuation continued with a smaller expense of 430 million in January 2023, followed by benefits of -171 million and -663 million in January 2024 and January 2025 respectively. These fluctuations suggest changes in temporary differences, tax planning strategies, or revisions in tax laws impacting deferred tax assets and liabilities.

Provision for Income Taxes

The overall provision for income taxes exhibits irregular movements. Starting at 4,915 million US dollars in January 2020, it rose sharply to 6,858 million in January 2021, coinciding with the highest deferred tax expense observed in the same period. This was followed by a decrease to 4,756 million in January 2022, where a deferred tax benefit occurred. Subsequently, the provision increased again to 5,724 million in January 2023, then slightly declined to 5,578 million in January 2024, before climbing to 6,152 million in January 2025. This pattern reflects the combined effects of the current tax provision's steady rise and the volatile deferred tax impacts.

The analysis of the financial data reveals several notable trends in the components influencing the effective income tax rate over the observed periods.

U.S. statutory tax rate

Remained constant at 21% throughout all periods from January 2020 to January 2025, indicating stability in the statutory federal tax framework.

U.S. state income taxes, net of federal income tax benefit

Showed a general increase from 2.2% in January 2020 to a peak of 3.1% in January 2023, before slightly declining to 2.8% by January 2025. This suggests moderate variability and an overall upward pressure on state tax expenses relative to federal tax benefits.

Income taxed outside the U.S.

Fluctuated significantly with negative impacts in early years (-1% in 2020 and -1.5% in 2022), shifting to positive contributions by 2023 and 2025 (1.1% and 1.3%, respectively). This variability indicates changing international tax exposures and possibly evolving foreign income mix or tax regulations affecting offshore earnings.

Separation, disposal, and wind-down of certain business operations

Data is intermittent, with notable peaks in January 2021 (7.1%) and January 2023 (6.3%), reflecting significant tax impacts from corporate restructuring or divestitures during these years. The absence of values in other periods suggests these events were concentrated in specific timeframes.

Valuation allowance

Exhibited a peak in January 2022 at 4.4%, followed by a declining trend to 0.4% by January 2025. This decline might indicate improving expectations on the realizability of deferred tax assets over time.

Net impact of repatriated international earnings

Maintained a marginally negative contribution throughout, ranging between -0.6% and 0.4%, reflecting consistent but limited effects from repatriation activities.

Federal tax credits

Consistently contributed to reducing the effective tax rate, with an increasing benefit from -0.8% in 2020 to approximately -1.5% through 2024, showing an enhancement or better utilization of available credits.

Enacted change in tax laws

Only present in January 2020 with a notable negative 1.9% impact, indicating that recent legislative changes were primarily effective or recorded in this initial period, with no subsequent entries.

Change in unrecognized tax benefits

Displayed a decreasing trend with 2.5% in 2020 tapering to 0.3% by 2025, implying a reduction in adjustments related to uncertain tax positions.

Other, net

Varied across periods with both positive and negative impacts, from -0.6% in 2022 to a positive 1.8% in 2023, and a decline to -0.4% by 2025, indicating miscellaneous factors influencing the tax rate with no consistent directional trend.

Effective income tax rate

Demonstrated marked fluctuations, peaking around 33.6% in 2023, with lows near 23.4% by January 2025 and 24.4% in 2020. The pattern suggests episodic influences such as business disposals and tax allowances substantially impacting the overall tax expense beyond the stable statutory rate.

Overall, the effective tax rate shows considerable variation influenced by discrete events like business restructuring and changes in valuation allowances. The consistently stable statutory tax rate contrasts with the dynamic components contributing to the overall tax expense, highlighting the impact of state taxes, foreign income taxation, tax credits, and other adjustments on the company's tax profile over time.

The reviewed financial data reveals several noteworthy trends across multiple categories over the analyzed periods from January 31, 2020, to January 31, 2025.

Loss and Tax Credit Carryforwards

This item showed a general declining trend from 9,456 million US dollars in 2022 to 7,136 million in 2024, with a slight increase to 7,539 million in 2025, indicating some fluctuations but an overall decrease in future tax benefit potential.

Accrued Liabilities

Accrued liabilities increased steadily from 2,483 million in 2020 to a peak of 3,312 million in 2023 before decreasing slightly to 3,009 million in 2025, signaling growth in obligations accrued but some moderation recently.

Share-based Compensation

This expense remained relatively stable, fluctuating marginally between 224 and 263 million, with a small upward trend toward 2025 suggesting a modest increase in stock-based remuneration expenses.

Lease Obligations

Lease obligations showed a generally increasing pattern, rising from 4,098 million in 2020 to a peak of 4,831 million in 2024, though declining slightly to 4,611 million in 2025. This increase may reflect heightened leasing activities or reevaluation of lease liabilities.

Other Assets (Positive)

Reported as "Other," these assets fluctuated considerably, with a significant dip in 2021 (589 million), a recovery peaking at 1,124 million in 2024, and a slight decrease afterward. This volatility implies one-time adjustments or variable asset components.

Deferred Tax Assets

Deferred tax assets remained relatively stable, hovering around 16,700 million to 17,600 million until 2022, then gradually declining to about 16,398 million in 2024 before a small rebound in 2025, indicating consistent future tax benefit expectations.

Valuation Allowances

Valuation allowances, shown as negative amounts, decreased in magnitude from -9,542 million in 2022 to -7,405 million in 2025, suggesting reduced impairment or better realizability of deferred tax assets.

Net Deferred Tax Assets (after Allowances)

The net deferred tax assets fluctuated modestly, decreasing from 8,319 million in 2020 to a low of 8,110 million in 2022, and then increasing again toward 9,093 million by 2025, implying variability in deferred tax asset strength after valuation allowances.

Property and Equipment

These assets, presented as negative values, depict a decline in net book value from -4,621 million in 2020 to -4,303 million in 2025, with intervening fluctuations, reflecting ongoing depreciation or asset disposals.

Acquired Intangibles

Also shown negatively, acquired intangibles declined somewhat from -1,152 million in 2020 to -1,096 million in 2025, with a trough at -898 million in 2024, suggesting amortization and possibly new acquisitions or impairment.

Inventory

Inventory levels experienced volatility, initially decreasing from -1,414 million in 2020 to -1,235 million in 2021, followed by a sharp increase in negative balance reaching -3,336 million by 2025, indicating rising inventory holdings or valuation changes.

Lease Right of Use Assets

These assets consistently increased in negative amount from -3,998 million in 2020 to -4,941 million in 2024 with a slight decrease to -4,816 million in 2025, signaling expanded lease asset recognition consistent with the lease obligations trend.

Mark-to-Market Investments

Marked to market investments showed significant variability, with a marked deterioration from -724 million in 2020 to -2,678 million in 2021, followed by a recovery to -322 million in 2024 and a minor decline thereafter, reflecting market value volatility of investment portfolios.

Other Liabilities (Negative)

This category exhibited relatively minor fluctuations, with negative balances ranging between -700 million and -460 million, suggesting stable but variable smaller liabilities or reserves.

Deferred Tax Liabilities

Deferred tax liabilities generally increased in absolute value from -12,609 million in 2020 to about -14,851 million in 2021, stabilizing around -14,495 million in 2024 and slightly improving to -14,364 million in 2025, indicating sustained obligations for future taxable amounts.

Net Deferred Tax Assets (Liabilities)

Overall net deferred tax liabilities deepened from -4,290 million in 2020 to a peak negative value of -6,609 million in 2021, then improved modestly to -5,271 million in 2025, indicating fluctuations in the balance of deferred tax assets versus liabilities, with a trend toward reduced net liability.

Deferred Tax Assets

The deferred tax assets exhibit a general declining trend from 2020 to 2022, falling from 1,914 million to 1,473 million US dollars. This downward movement is followed by a moderate recovery in the subsequent years, with values increasing to 1,663 million in 2024 and further to 1,748 million in 2025. Despite the initial reduction, the growth in the last two years indicates a possible improvement in the recognition or realization of deferred tax benefits.

Deferred Tax Liabilities

Deferred tax liabilities demonstrate more volatility over the analyzed periods. There is a significant increase from 6,204 million in 2020 to a peak of 8,445 million in 2021. Following this peak, the liabilities decrease sharply to 6,917 million in 2022 before stabilizing somewhat around the 7,000 million mark in the following years, with slight fluctuations ending at 7,019 million in 2025. This pattern may suggest changes in tax timing differences, possibly influenced by shifts in asset bases or tax legislation impacts.

Overall Trends and Insights

The contrasting trends of deferred tax assets and liabilities highlight a dynamic tax position. The declining deferred tax assets in the early years, contrasted with the surging deferred tax liabilities in 2021, suggest timing differences in tax expense recognition or changes in tax planning strategies. The later recovery in deferred tax assets and the stabilization of deferred tax liabilities indicate adjustments in the tax provisioning approach or the expiration and creation of new temporary differences.

The financial data over the six-year period reveals several notable trends in assets, liabilities, equity, and net income, both as reported and adjusted for deferred income tax effects.

Total Assets

Reported total assets exhibit modest fluctuations, increasing from US$236,495 million in 2020 to US$260,823 million in 2025. A peak was observed in 2021 at US$252,496 million, followed by a slight decline in 2022 and 2023 before rising again in 2024 and 2025. The adjusted total assets closely mirror this pattern but consistently present slightly lower values, indicating some reduction due to tax adjustments, with an increase from US$234,581 million in 2020 to US$259,075 million in 2025.

Total Liabilities

Reported total liabilities generally trend upward from US$154,943 million in 2020 to US$163,131 million in 2025. The liabilities dipped in 2022 before resuming a gradual rise through 2025. Adjusted liabilities display a similar trajectory but remain consistently lower across all years compared to reported liabilities, ranging from US$148,739 million in 2020 to US$156,112 million in 2025, suggesting deferred tax liabilities contribute to the difference.

Total Shareholders’ Equity

Reported shareholders’ equity reflects an overall upward trend, growing from US$74,669 million in 2020 to US$91,013 million in 2025. The equity peaked in 2022 at US$83,253 million, experienced a notable decline in 2023, and then increased again in subsequent years. Adjusted shareholders’ equity is consistently higher than reported equity, increasing from US$78,959 million in 2020 to US$96,284 million in 2025. This suggests deferred tax adjustments positively impact equity.

Consolidated Net Income Attributable to Walmart

Reported net income fluctuates over the period, beginning at US$14,881 million in 2020, decreasing to US$11,680 million in 2023, and then rising significantly to US$19,436 million in 2025. Adjusted net income shows a different pattern; it increases to US$15,508 million in 2021, declines to US$12,110 million in 2023, but also recovers strongly to US$18,773 million in 2025. The adjusted figures are generally higher in earlier years but fall below reported numbers in some later years, indicating the impact of deferred tax considerations on profitability.

Overall, the analysis suggests steady growth in total assets and shareholders’ equity over the timeframe, with liabilities increasing at a slower rate. Adjustments for deferred income taxes consistently reduce assets and liabilities but increase equity, implying net deferred tax assets enhance ownership value. Net income trends reveal variability with resilience demonstrated by recovery and growth in the later years, highlighting improvements in operational profitability when adjusted for tax impacts.

Net Profit Margin

The reported net profit margin exhibits a declining trend from 2.86% in January 2020 to a low of 1.93% in January 2023, followed by a rebound to 2.88% in January 2025. The adjusted net profit margin follows a similar pattern, decreasing from 2.93% to 2.00% over the same initial period, then recovering to 2.78% by January 2025. This suggests some temporary pressure on profitability which has been partially alleviated in the latest years.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios show a steady improvement over the six-year period. Reported turnover increases from 2.20 to 2.59, while adjusted turnover rises from 2.22 to 2.60. This indicates increased efficiency in asset utilization contributing to revenue generation.

Financial Leverage

The reported financial leverage decreases from 3.17 in 2020 to 2.87 in 2025, with some fluctuations around 3.0 in the intermediate years. Adjusted leverage similarly declines from 2.97 to 2.69 over the same period. The downward movement in leverage ratios reflects a gradual reduction in reliance on debt financing or a greater equity base deployment.

Return on Equity (ROE)

Reported ROE experiences a decline from 19.93% in January 2020 to 15.23% in January 2023, then increases sharply to 21.36% by January 2025. Adjusted ROE mirrors this trend but with slightly lower magnitude, falling from 19.26% to 14.56% before recovering to 19.50%. The pattern suggests initial profitability challenges followed by improved efficiency or favorable financial structures enhancing shareholder returns.

Return on Assets (ROA)

The reported ROA declines from 6.29% down to 4.80% by 2023, then rises to 7.45% in 2025. Adjusted ROA follows a comparable trajectory from 6.48% to 5.01% and back to 7.25%. This indicates that asset profitability was pressured mid-period but strengthened notably toward the end, aligning with improvements in asset turnover and net margin recovery.

Reported consolidated net income attributable to Walmart

The reported net income exhibited a fluctuating trend over the six-year period. Starting at 14,881 million US dollars in 2020, it decreased to 13,510 million in 2021, then experienced a slight increase to 13,673 million in 2022. There was a significant decline to 11,680 million in 2023, followed by a strong recovery to 15,511 million in 2024 and further growth to 19,436 million in 2025. Overall, the net income shows recovery and substantial growth in the last two years after several years of volatility.

Adjusted consolidated net income attributable to Walmart

The adjusted net income demonstrated a somewhat similar but less volatile pattern compared to reported net income. It increased initially from 15,210 million in 2020 to 15,508 million in 2021, then declined to 12,914 million in 2022 and further decreased slightly to 12,110 million in 2023. Subsequently, it rebounded strongly to 15,340 million in 2024 and continued to increase to 18,773 million in 2025. The adjusted values suggest that the company’s underlying profitability suffered a dip around 2022 and 2023 but showed signs of robust recovery thereafter.

Reported net profit margin

The reported net profit margin consistently declined from 2.86% in 2020 to a low of 1.93% in 2023, indicating a compression in profitability during that period. However, it improved to 2.41% in 2024 and further to 2.88% in 2025, surpassing the initial margin observed in 2020. This trend aligns with the fluctuations in reported net income, reflecting an initial downturn followed by a recovery in profitability ratios.

Adjusted net profit margin

The adjusted net profit margin followed a comparable trend to the reported margin but was generally higher in percentage terms. It increased from 2.93% in 2020 to 2.79% in 2021 before declining to 2.27% in 2022 and slightly higher at 2.00% in 2023. The margin then improved to 2.39% in 2024 and 2.78% in 2025. This pattern indicates that after adjusting for certain income tax effects, the company maintained a relatively steadier profitability margin, with some recovery observed in the recent years.

Overall insights

The financial data reveals a period of declining profitability and net income from 2020 through 2023, likely due to various operational or market challenges. Both reported and adjusted figures show that net income and profit margins bottomed out around 2023. However, the subsequent two years exhibited marked improvement and growth in net income and profit margins, reflecting a positive turnaround in financial performance. The adjusted figures tend to smooth some of the volatility seen in reported figures, offering a clearer view of underlying profitability trends.

Total Assets

The reported total assets exhibit a general upward trend from 236,495 million US dollars in 2020 to 260,823 million US dollars in 2025, marking an overall growth over the six-year span. The adjusted total assets closely mirror this pattern, increasing from 234,581 million US dollars in 2020 to 259,075 million US dollars in 2025. Notably, both reported and adjusted figures show a slight dip around 2022 and 2023 before resuming their growth trajectory.

Total Asset Turnover

The reported total asset turnover ratio demonstrates consistent improvement year over year, rising from 2.2 in 2020 to 2.59 in 2025. This indicates increasing efficiency in generating sales revenue from the asset base. The adjusted total asset turnover ratio follows a similar trend, starting at 2.22 in 2020 and increasing to 2.6 in 2025, slightly higher than the reported figures across all periods.

Insights

The data suggests a steady expansion of the asset base, accompanied by continual improvements in asset utilization. The adjustments made for deferred income tax appear to marginally reduce total assets while slightly enhancing turnover ratios, implying that these adjustments refine the assessment of operational efficiency. The overall positive trends in asset growth and turnover ratios reflect an improving productivity and asset management capability over the analyzed periods.

The analysis of the financial data over the six-year period reveals several notable trends in the company’s asset base, shareholders’ equity, and financial leverage.

Total Assets

Both reported and adjusted total assets exhibit a general fluctuation across the periods. Reported total assets increased from 236,495 million US dollars in 2020 to 252,496 million in 2021, followed by a slight decrease in 2022 and 2023 before rising again through 2024 and 2025. Adjusted total assets follow a similar pattern but remain marginally lower than reported amounts each year. This suggests minor adjustments related to income tax effects affect asset valuation but do not significantly alter the overall asset trend.

Shareholders’ Equity

Reported shareholders’ equity shows a growth from 74,669 million US dollars in 2020 to 83,253 million in 2022, dips in 2023 to 76,693 million, then recovers in 2024 and 2025. Adjusted equity consistently exceeds reported equity, indicating positive deferred tax adjustments. The adjusted equity trend mirrors that of reported equity, with growth through 2022, a decline in 2023, and subsequent recovery. This pattern could imply the impact of operational or market factors affecting equity in 2023, temporarily reducing book value before improvement.

Financial Leverage

The reported financial leverage ratio declines from 3.17 in 2020 to 2.94 in 2022, rises again to 3.17 in 2023, then drops to 3.01 in 2024 and further to 2.87 in 2025. Adjusted leverage ratios are slightly lower but demonstrate a comparable trend with a steady decrease from 2.97 in 2020 to 2.74 in 2022, an increase to 2.93 in 2023, followed by a decrease through 2025 to 2.69. The fluctuations indicate variations in the company’s financing structure, balancing between debt and equity, with a temporary increase in leverage in 2023 before strengthening equity positions in later years.

Overall, the data illustrates resilience in asset growth with moderate fluctuations, a temporary dip and recovery in equity levels, and a leverage profile that reflects strategic adjustments in financial structure. Adjustments for deferred income tax slightly moderate reported figures but maintain consistent directional trends, emphasizing the stability and ongoing management of financial policies over the observed period.

Net Income Trends

Reported consolidated net income attributable to the company demonstrates fluctuations over the six-year period. Starting at 14,881 million USD in 2020, it decreased to a low point of 11,680 million USD in 2023 before rising sharply to 19,436 million USD by 2025. Adjusted net income shows a somewhat similar pattern, initially increasing from 15,210 million USD in 2020 to 15,508 million USD in 2021, then declining to 12,110 million USD in 2023, and rebounding to 18,773 million USD by 2025. Overall, the adjusted figures tend to be higher than the reported ones, except for some years where the reported values exceed the adjusted ones.

Shareholders' Equity Trends

Reported total shareholders’ equity exhibits steady growth from 74,669 million USD in 2020 to 91,013 million USD in 2025, with a minor dip observed in 2023 (76,693 million USD). Adjusted equity values are consistently higher across all years, starting at 78,959 million USD in 2020 and increasing to 96,284 million USD in 2025. The growth in adjusted equity is smoother compared to the reported figures, reflecting possible adjustments from deferred income tax effects or other items.

Return on Equity (ROE) Analysis

Reported ROE declines from 19.93% in 2020 to 15.23% in 2023 before increasing again to 21.36% in 2025. The adjusted ROE follows a similar trend but at slightly lower levels, starting at 19.26% in 2020, dropping to 14.56% in 2022, and recovering to 19.5% in 2025. This indicates that the company’s profitability relative to shareholders’ equity has experienced variability, with a recovery phase in the most recent years. The adjustments appear to moderate the ROE values, suggesting that deferred tax or income tax adjustments impact net profitability measurements.

Overall Insights

The data reveals a cyclical pattern in earnings and profitability, with noticeable dips around 2022 and 2023 followed by significant recovery by 2025. The adjustments for deferred income tax effects generally increase equity and net income figures compared to reported amounts, which in turn affects the reported metrics of financial performance such as ROE. This indicates that tax-related accounting adjustments have a material impact on the presentation of the company’s financial position and profitability. The resilience shown in the latter years points toward effective management of operational or tax-related challenges encountered earlier in the period.

Net Income Trends

Reported consolidated net income attributable to Walmart shows fluctuations over the analyzed periods, decreasing from $14,881 million in 2020 to $11,680 million in 2023 before rising sharply to $19,436 million in 2025. Adjusted consolidated net income exhibits a different pattern, peaking at $15,508 million in 2021, followed by a decline to $12,110 million in 2023, and then a significant increase to $18,773 million in 2025. Both reported and adjusted figures demonstrate a recovery and notable improvement in the latest year observed.

Total Assets

Both reported and adjusted total assets reveal moderate growth over the period. Reported total assets increased from approximately $236.5 billion in 2020 to $260.8 billion in 2025, while adjusted total assets follow a similar pattern, rising from about $234.6 billion to $259.1 billion. The daily differences between reported and adjusted figures remain relatively small and consistent, indicating stable asset base adjustments.

Return on Assets (ROA)

Reported ROA decreased from 6.29% in 2020 to a low of 4.8% in 2023, before improving considerably to 7.45% in 2025. Adjusted ROA shows a somewhat different trajectory, starting higher at 6.48% in 2020, declining steadily to 5.01% in 2023, and then increasing to 7.25% in 2025. Both measures reflect a downturn phase followed by a strong rebound, with reported ROA consistently lower than adjusted ROA until the final year where reported ROA marginally surpasses adjusted ROA.

Overall Insights

The data indicates a period of declining profitability and efficiency from 2020 to 2023, followed by a pronounced recovery through 2025 in net income and asset utilization. Adjustments for income tax impact appear to moderate the volatility observed in reported figures, especially in net income and ROA, providing a smoother trend line. The asset base exhibits steady growth, supporting the enhanced profitability in later years. The patterns suggest operational or market factors negatively impacting performance mid-period, with a successful turnaround or external conditions improving in the last two years.