Accounting Policy on Income Taxes
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Income taxes are accounted for under the balance sheet method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases ("temporary differences"). Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.

Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent that a portion is not more likely than not to be realized. Many factors are considered when assessing whether it is more likely than not that the deferred tax assets will be realized, including recent cumulative earnings, expectations of future taxable income, carryforward periods, and other relevant quantitative and qualitative factors. The recoverability of the deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates.

The Tax Cuts and Jobs Act contains a provision which subjects a US parent of a foreign subsidiary to current US tax on its global intangible low–taxed income (“GILTI”). The GILTI income is eligible for a deduction, which lowers the effective tax rate to 10.5% for calendar years 2018 through 2025 and 13.125% after 2025. Walmart will report the tax impact of GILTI as a period cost when incurred. Accordingly, Walmart is not providing deferred taxes for basis differences expected to reverse as GILTI.

In determining the provision for income taxes, an annual effective income tax rate is used based on annual income, permanent differences between book and tax income, and statutory income tax rates. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.

Walmart records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Walmart records interest and penalties related to unrecognized tax benefits in interest expense and operating, selling, general and administrative expenses, respectively, in Walmart’s Consolidated Statements of Income.

In February 2018, the FASB issued ASU 2018-02, Income Statement–Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). This ASU provides that the stranded tax effects from the Tax Cuts and Jobs Act of 2017 ("Tax Act") in accumulated other comprehensive loss may be reclassified to retained earnings. Walmart adopted this ASU on February 1, 2018, which resulted in an immaterial negative adjustment to retained earnings.

Source: 10-K (filing date: 2019-03-28).

Walmart Inc., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended	Jan 31, 2019		Jan 31, 2018		Jan 31, 2017		Jan 31, 2016		Jan 31, 2015		Jan 31, 2014
	U.S. federal
	U.S. state and local
	International
	Current tax provision
	U.S. federal
	U.S. state and local
	International
	Deferred tax expense (benefit)
	Provision for income taxes

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

Item	Description	The company
Current tax provision	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Walmart Inc.’s current tax provision declined from 2017 to 2018 and from 2018 to 2019.
Deferred tax expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Walmart Inc.’s deferred tax expense (benefit) declined from 2017 to 2018 and from 2018 to 2019.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Walmart Inc.’s provision for income taxes declined from 2017 to 2018 and from 2018 to 2019.

Walmart Inc., effective income tax rate (EITR) reconciliation

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	U.S. statutory tax rate
	U.S. state income taxes, net of federal income tax benefit
	Income taxed outside the U.S.
	Disposition of Walmart Brazil
	Valuation allowance
	Net impact of repatriated international earnings
	Federal tax credits
	Other, net
	Effective income tax rate, before impact of the Tax Act
	One-time transition tax
	Deferred tax effects
	Impact of the Tax Act
	Effective income tax rate

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

Item	Description	The company
Effective income tax rate, before impact of the Tax Act	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Walmart Inc.’s effective income tax rate, before impact of the Tax Act increased from 2017 to 2018 and from 2018 to 2019.

Walmart Inc., components of deferred tax assets and liabilities

US$ in millions

		Jan 31, 2019		Jan 31, 2018		Jan 31, 2017		Jan 31, 2016		Jan 31, 2015		Jan 31, 2014
	Loss and tax credit carryforwards
	Accrued liabilities
	Share-based compensation
	Other
	Deferred tax assets
	Valuation allowances
	Deferred tax assets, net of valuation allowance
	Property and equipment
	Acquired intangibles
	Inventories
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

Item	Description	The company
Deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Walmart Inc.’s deferred tax assets declined from 2017 to 2018 but then slightly increased from 2018 to 2019.
Deferred tax assets, net of valuation allowance	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Walmart Inc.’s deferred tax assets, net of valuation allowance declined from 2017 to 2018 and from 2018 to 2019.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Walmart Inc.’s net deferred tax assets (liabilities) increased from 2017 to 2018 but then declined significantly from 2018 to 2019.

Walmart Inc., deferred tax assets and liabilities, classification

US$ in millions

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Current deferred tax assets (included in Prepaid expenses and other)
	Long-term deferred tax assets (included in Other long-term assets)
	Current deferred tax liabilities (included in Accrued liabilities)
	Long-term deferred tax liabilities (included in Deferred income taxes and other)

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

Item	Description	The company
Long-term deferred tax assets (included in Other long-term assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Walmart Inc.’s long-term deferred tax assets (included in Other long-term assets) increased from 2017 to 2018 but then slightly declined from 2018 to 2019.
Long-term deferred tax liabilities (included in Deferred income taxes and other)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Walmart Inc.’s long-term deferred tax liabilities (included in Deferred income taxes and other) declined from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Walmart Inc., adjustments to financial statements

US$ in millions

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Walmart Shareholders’ Equity
	Total Walmart shareholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Walmart shareholders’ equity (adjusted)
	Adjustment to Consolidated Net Income Attributable To Walmart
	Consolidated net income attributable to Walmart (as reported)
	Add: Deferred income tax expense (benefit)
	Consolidated net income attributable to Walmart (adjusted)

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

Walmart Inc., Financial Data: Reported vs. Adjusted

Walmart Inc., adjusted financial ratios

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Walmart Inc.’s adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Walmart Inc.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walmart Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Walmart Inc.’s adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Walmart Inc.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Walmart Inc.’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

Walmart Inc., Financial Ratios: Reported vs. Adjusted

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Current assets
	Current liabilities
	Liquidity Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Liquidity Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Walmart Inc.’s adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Consolidated net income attributable to Walmart
	Net sales
	Profitability Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted consolidated net income attributable to Walmart
	Net sales
	Profitability Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

2019 Calculations

¹ Net profit margin = 100 × Consolidated net income attributable to Walmart ÷ Net sales
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted consolidated net income attributable to Walmart ÷ Net sales
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Walmart Inc.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net sales
	Total assets
	Activity Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Net sales
	Adjusted total assets
	Activity Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

2019 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walmart Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Total Walmart shareholders’ equity
	Solvency Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted total assets
	Adjusted total Walmart shareholders’ equity
	Solvency Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

2019 Calculations

¹ Financial leverage = Total assets ÷ Total Walmart shareholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Walmart shareholders’ equity
= hidden ÷ hidden = hidden

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Walmart Inc.’s adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Consolidated net income attributable to Walmart
	Total Walmart shareholders’ equity
	Profitability Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted consolidated net income attributable to Walmart
	Adjusted total Walmart shareholders’ equity
	Profitability Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

2019 Calculations

¹ ROE = 100 × Consolidated net income attributable to Walmart ÷ Total Walmart shareholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted consolidated net income attributable to Walmart ÷ Adjusted total Walmart shareholders’ equity
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Walmart Inc.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Consolidated net income attributable to Walmart
	Total assets
	Profitability Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted consolidated net income attributable to Walmart
	Adjusted total assets
	Profitability Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).

2019 Calculations

¹ ROA = 100 × Consolidated net income attributable to Walmart ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted consolidated net income attributable to Walmart ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Walmart Inc.’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

	Walmart Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

Walmart Inc. (WMT)

Analysis of Income Taxes

Accounting Policy on Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Walmart Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Walmart Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)