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Walmart Inc. (WMT)
Analysis of Property, Plant and Equipment
Difficulty: Advanced
Property, Plant and Equipment Accounting Policy
Property and equipment are initially recorded at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are expensed as incurred. The following table summarizes Walmart’s estimated useful lives that are generally used to depreciate the assets on a straight-line basis:
| Estimated Useful Lives | |
| Land | N/A |
| Buildings and improvements | 3-40 years |
| Fixtures and equipment | 1-30 years |
| Transportation equipment | 3-15 years |
| Construction in progress | N/A |
Leasehold improvements are depreciated or amortized over the shorter of the estimated useful life of the asset or the remaining expected lease term. Total depreciation and amortization expense for property and equipment, property under financing obligations, property under capital leases and intangible assets for fiscal 2019, 2018 and 2017 was $10.7 billion, $10.5 billion and $10.1 billion, respectively.
Source: 10-K (filing date: 2019-03-28).
Property, Plant and Equipment Disclosure
Walmart Inc., Statement of Financial Position, Property, Plant and Equipment
USD $ in millions
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 |
|---|---|---|
| Property and equipment, including property under capital lease and financing obligations, gross | Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Walmart Inc.’s property and equipment, including property under capital lease and financing obligations, gross increased from 2017 to 2018 and from 2018 to 2019. |
| Property and equipment, including property under capital lease and financing obligations, net | Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Walmart Inc.’s property and equipment, including property under capital lease and financing obligations, net increased from 2017 to 2018 but then declined significantly from 2018 to 2019. |
Property, Plant and Equipment Ratios (Summary)
Walmart Inc., Property, Plant and Equipment Ratios
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).
| Ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Walmart Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Walmart Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2017 to 2018 and from 2018 to 2019. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Walmart Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Estimated remaining life | Walmart Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2017 to 2018 and from 2018 to 2019. |
Average Age
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 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, including property under capital lease and financing obligations, gross – Land)
= 100 × ÷ ( – ) =
| Ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Walmart Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019. |
Estimated Total Useful Life
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 Estimated total useful life (years) = (Property and equipment, including property under capital lease and financing obligations, gross – Land) ÷ Depreciation and amortization expense for property and equipment, property under financing obligations and property under capital leases
= ( – ) ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Walmart Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2017 to 2018 and from 2018 to 2019. |
Estimated Age, Time Elapsed since Purchase
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 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense for property and equipment, property under financing obligations and property under capital leases
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Walmart Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019. |
Estimated Remaining Life
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 Estimated remaining life (years) = (Property and equipment, including property under capital lease and financing obligations, net – Land) ÷ Depreciation and amortization expense for property and equipment, property under financing obligations and property under capital leases
= ( – ) ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated remaining life | Walmart Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2017 to 2018 and from 2018 to 2019. |