Stock Analysis on Net

Walmart Inc. (NYSE:WMT)

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Walmart Inc., balance sheet computation of aggregate accruals

US$ in millions

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Jan 31, 2022 Jan 31, 2021 Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017
Operating Assets
Total assets 244,860  252,496  236,495  219,295  204,522  198,825 
Less: Cash and cash equivalents 14,760  17,741  9,465  7,722  6,756  6,867 
Operating assets 230,100  234,755  227,030  211,573  197,766  191,958 
Operating Liabilities
Total liabilities 152,969  164,965  154,943  139,661  123,700  118,290 
Less: Short-term borrowings 410  224  575  5,225  5,257  1,099 
Less: Long-term debt due within one year 2,803  3,115  5,362  1,876  3,738  2,256 
Less: Finance lease obligations due within one year 511  491  511  —  —  — 
Less: Capital lease and financing obligations due within one year —  —  —  729  667  565 
Less: Long-term debt, excluding due within one year 34,864  41,194  43,714  43,520  30,045  36,015 
Less: Long-term finance lease obligations, excluding due within one year 4,243  3,847  4,307  —  —  — 
Less: Long-term capital lease and financing obligations, excluding due within one year —  —  —  6,683  6,780  6,003 
Operating liabilities 110,138  116,094  100,474  81,628  77,213  72,352 
 
Net operating assets1 119,962  118,661  126,556  129,945  120,553  119,606 
Balance-sheet-based aggregate accruals2 1,301  (7,895) (3,389) 9,392  947  — 
Financial Ratio
Balance-sheet-based accruals ratio3 1.09% -6.44% -2.64% 7.50% 0.79%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Costco Wholesale Corp. 5.32% 2.31% 4.32% 3.81% -6.27%
Balance-Sheet-Based Accruals Ratio, Sector
Food & Staples Retailing 0.00% -5.23% -2.17% 7.20% 1.07%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Staples 0.00% 0.45% 0.28% 5.07% 1.76%

Based on: 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31), 10-K (reporting date: 2018-01-31), 10-K (reporting date: 2017-01-31).

1 2022 Calculation
Net operating assets = Operating assets – Operating liabilities
= 230,100110,138 = 119,962

2 2022 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2022 – Net operating assets2021
= 119,962118,661 = 1,301

3 2022 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,301 ÷ [(119,962 + 118,661) ÷ 2] = 1.09%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Walmart Inc. improved earnings quality from 2021 to 2022.

Cash-Flow-Statement-Based Accruals Ratio

Walmart Inc., cash flow statement computation of aggregate accruals

US$ in millions

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Jan 31, 2022 Jan 31, 2021 Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017
Consolidated net income attributable to Walmart 13,673  13,510  14,881  6,670  9,862  13,643 
Less: Net cash provided by operating activities 24,181  36,074  25,255  27,753  28,337  31,530 
Less: Net cash used in investing activities (6,015) (10,071) (9,128) (24,036) (9,060) (13,987)
Cash-flow-statement-based aggregate accruals (4,493) (12,493) (1,246) 2,953  (9,415) (3,900)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -3.77% -10.19% -0.97% 2.36% -7.84%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Costco Wholesale Corp. -2.96% -7.15% 1.28% 2.44% -13.20%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Food & Staples Retailing 0.00% -9.44% -1.56% 2.26% -6.87%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Staples 0.00% -4.18% -1.00% 0.44% -5.64%

Based on: 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31), 10-K (reporting date: 2018-01-31), 10-K (reporting date: 2017-01-31).

1 2022 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -4,493 ÷ [(119,962 + 118,661) ÷ 2] = -3.77%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Walmart Inc. improved earnings quality from 2021 to 2022.