Walmart Inc. (NYSE:WMT)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes showed a fluctuating trend over the period. From 2020 to 2023, NOPAT declined from 18,200 million USD to a low of 13,880 million USD in 2023. However, a marked recovery is observed in the subsequent years, reaching 22,003 million USD by 2025, surpassing the initial value recorded in 2020.

Cost of Capital

The cost of capital demonstrated a steady increase throughout the years. It rose from 8.92% in 2020 to 9.79% in 2025, indicating a gradually higher required rate of return on invested capital over the analyzed period.

Invested Capital

Invested capital showed a gradual decline from 167,329 million USD in 2020 to a low of 149,558 million USD in 2023. Following this, the invested capital increased again to 161,279 million USD by 2025, suggesting a partial reinvestment or expansion after a period of reduction.

Economic Profit

Economic profit decreased significantly from 3,266 million USD in 2020 to a negative value of -160 million USD in 2023, reflecting a period when returns did not cover the cost of capital. From 2024 onwards, economic profit showed a strong recovery, reaching 6,216 million USD in 2025, the highest level across the timeframe, signaling improved value creation beyond the cost of capital.

Summary of Trends

Overall, the data reveals a period of declining operational profitability and capital deployment efficiency from 2020 to 2023, marked by diminishing NOPAT, invested capital, and negative economic profit. Concurrently, the cost of capital increased steadily. Starting in 2024, a robust recovery phase began, with increases in NOPAT, invested capital, and economic profit, suggesting enhanced operational performance and value creation surpassing the rising cost of capital.

Consolidated net income attributable to Walmart

The net income shows a fluctuating trend over the years. It started at 14,881 million USD in 2020, decreased to 13,510 million USD in 2021, and slightly increased to 13,673 million USD in 2022. There was a notable decline in 2023 to 11,680 million USD. However, in the subsequent years, a significant recovery and growth are observed, with net income rising to 15,511 million USD in 2024 and further increasing sharply to 19,436 million USD in 2025.

Net operating profit after taxes (NOPAT)

NOPAT demonstrates a general downward trend between 2020 and 2023, beginning at 18,200 million USD in 2020 and decreasing to 18,130 million USD in 2021. This decline continues more sharply through 2022 (15,307 million USD) and 2023 (13,880 million USD). From 2024 onwards, a strong recovery is evident, with NOPAT rising significantly to 18,517 million USD and then to 22,003 million USD in 2025.

Overall Analysis

Both net income and NOPAT experienced declines during the early years, particularly from 2020 to 2023, suggesting pressures on profitability possibly due to operational or market challenges. The drop in NOPAT is more pronounced, indicating operational efficiency or cost factors impacting returns after taxes. From 2024 to 2025, a notable reversal occurs, showing substantial growth in both profitability measures that surpass the initial levels reported in 2020. This suggests the company improved its operational performance and overall profitability during the latter period, potentially reflecting successful strategic initiatives, enhanced revenue generation, or cost management improvements.

The analysis of the provision for income taxes and cash operating taxes over the reported years reveals several key trends and insights into the company's tax-related financial performance.

Provision for Income Taxes

The provision for income taxes exhibits fluctuation across the examined periods. Starting at a lower level in the earliest year, it increased significantly in the second year, reaching its highest recorded value during this span. Following this peak, the provision decreased notably in the third year, indicating variability in taxable income or changes in tax regulations. Subsequently, it showed a moderate upward trend in the last two years, though not surpassing the earlier peak. Overall, this item demonstrates a pattern of volatility rather than steady growth or decline.

Cash Operating Taxes

Cash operating taxes show a generally increasing trend over the entire period. The values rise steadily year over year with minor deviations, suggesting growing tax cash outflows possibly driven by increased operating income or changes in cash tax settlement timing. The most notable increase occurs in the final year analyzed, which could indicate heightened tax payments or shifts in tax planning strategies resulting in greater actual cash disbursements for taxes.

Comparison and Interpretation

The divergence between provision for income taxes and cash operating taxes is apparent, where cash taxes consistently trend upwards more smoothly, whereas provisions are more volatile. This may reflect differences in accrual versus cash accounting methods for taxes, timing differences in tax payments, or adjustments due to tax law changes or deferred tax assets and liabilities. The steady increase in cash operating taxes, particularly the sharp rise in the latest period, warrants further investigation into the company's tax payment policies and operational profitability.

Total reported debt & leases

The total reported debt and leases exhibit a decreasing trend from January 31, 2020, to January 31, 2022, declining from 72,433 million US dollars to 57,323 million US dollars. This downward trend is somewhat reversed in the subsequent periods, with an increase to 61,321 million US dollars by January 31, 2024, before a slight decrease to 60,114 million US dollars in January 31, 2025. Overall, the debt and leases remain below the initial 2020 level, indicating a reduction over the five-year span despite minor fluctuations.

Total Walmart shareholders’ equity

Shareholders' equity shows a generally increasing trajectory over the analyzed periods. Starting at 74,669 million US dollars in January 2020, it rises steadily to peak at 83,253 million US dollars in January 2022. Although a dip occurs in January 2023 to 76,693 million US dollars, the equity rebounds strongly in subsequent years, reaching 91,013 million US dollars by January 2025. This pattern suggests growth in the company’s net value with temporary volatility in early 2023.

Invested capital

Invested capital demonstrates a consistent downward trend from 167,329 million US dollars in January 2020 to a low of 149,558 million US dollars in January 2023. However, after this point, there is an upward correction onward to 161,279 million US dollars by January 2025. This movement could reflect strategic capital management with periods of capital reduction followed by reinvestment or asset growth.

The financial data over the reported periods reveals distinct trends in economic profit, invested capital, and economic spread ratio.

Economic Profit

The economic profit shows considerable volatility across the years. Initially, it declines moderately from 3,266 million US dollars in 2020 to 3,050 million in 2021, followed by a sharp drop to 674 million in 2022. The metric turns negative in 2023, recording a loss of 160 million US dollars, which indicates a period of financial underperformance or increased costs relative to capital charge. Subsequently, the economic profit recovers strongly, reaching 3,639 million in 2024 and further increasing to 6,216 million in 2025, signaling significant improvement in value generation.

Invested Capital

Invested capital demonstrates a generally declining trend from 167,329 million US dollars in 2020 to a low of 149,558 million in 2023. This decrease suggests a reduction in the capital base, perhaps through divestitures or operational efficiencies. However, invested capital rebounds in the final two years, rising to 155,389 million in 2024 and 161,279 million in 2025, which may reflect new investments or capital commitments aimed at supporting growth.

Economic Spread Ratio

The economic spread ratio, which measures the return above the cost of capital, mirrors the pattern seen in economic profit. It starts at 1.95% in 2020 and gradually decreases to 1.85% in 2021, then sharply falls to 0.43% in 2022. In 2023, this ratio turns negative (-0.11%), consistent with the negative economic profit for that year, indicating returns below the capital cost. A significant recovery in economic spread occurs in 2024, reaching 2.34%, and further improves to 3.85% in 2025, highlighting enhanced profitability and efficient capital utilization in the latter periods.

Overall, the analysis highlights a period of weakened financial performance and capital contraction in the middle years, followed by a marked recovery both in profitability and capital investment efficiency in the most recent years. This pattern suggests strategic adjustments or market conditions that initially pressured financial returns but were effectively addressed subsequently.

Net Sales

The net sales exhibit a consistent upward trend over the analyzed period, increasing from $519,926 million in 2020 to $674,538 million by 2025. This indicates sustained revenue growth year over year, reflecting either expansion in market reach, increased sales volume, price adjustments, or a combination thereof.

Economic Profit

Economic profit shows significant fluctuation across the years. Starting at $3,266 million in 2020, it decreases to $674 million by 2022, followed by a negative economic profit of -$160 million in 2023, indicating a year in which economic value decreased potentially due to higher costs, diminished operational efficiency, or other adverse factors. However, the subsequent years restore and surpass previous levels, reaching $6,216 million in 2025, demonstrating a strong recovery and improved profitability.

Economic Profit Margin

The economic profit margin mirrors the economic profit trend, starting at 0.63% in 2020 and gradually declining to nearly zero or negative levels in 2023 (-0.03%), indicating minimal or negative economic returns relative to sales during that year. After this low point, the margin recovers to 0.57% in 2024 and further improves to 0.92% in 2025. This margin recovery suggests enhanced operational efficiency or improved cost management relative to sales growth.

Summary

The data reveals consistent revenue growth alongside volatility in economic profit and profit margins. Notably, there is a downturn in profitability around 2022–2023, with a recovery and strong improvement thereafter. This implies the company faced challenges impacting economic profit during the mid-period but successfully overcame these issues, leading to strengthened economic performance by the end of the period analyzed.