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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread
Economic Profit Margin

Walmart Inc., economic profit calculation

US$ in millions

	12 months ended	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Net operating profit after taxes (NOPAT)¹
	Cost of capital²
	Invested capital³

	Economic profit⁴

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 NOPAT. See Details »

² Cost of capital. See Details »

³ Invested capital. See Details »

⁴ Economic profit = NOPAT – Cost of capital × Invested capital
= hidden – hidden × hidden = hidden

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Walmart Inc.’s economic profit declined from 2017 to 2018 and from 2018 to 2019.

Walmart Inc., NOPAT calculation

US$ in millions

	12 months ended	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Consolidated net income attributable to Walmart
	Deferred income tax expense (benefit)¹
	Increase (decrease) in equity equivalents²
	Interest expense, debt, capital lease and financing obligations
	Interest expense, operating lease liability³
	Adjusted interest expense, debt, capital lease and financing obligations
	Tax benefit of interest expense, debt, capital lease and financing obligations⁴
	Adjusted interest expense, debt, capital lease and financing obligations, after taxes⁵
	Interest income
	Investment income, before taxes
	Tax expense (benefit) of investment income⁶
	Investment income, after taxes⁷
	(Income) loss from discontinued operations, net of tax⁸
	Net income (loss) attributable to noncontrolling interest
	Net operating profit after taxes (NOPAT)

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 Elimination of deferred tax expense. See Details »

² Addition of increase (decrease) in equity equivalents to consolidated net income attributable to Walmart.

³ Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= hidden × hidden = hidden

⁴ Tax benefit of interest expense, debt, capital lease and financing obligations = Adjusted interest expense, debt, capital lease and financing obligations × Statutory income tax rate
= hidden × 21.00% = hidden

⁵ Addition of after taxes interest expense to consolidated net income attributable to Walmart.

⁶ Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= hidden × 21.00% = hidden

⁷ Elimination of after taxes investment income.

⁸ Elimination of discontinued operations.

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Walmart Inc.’s NOPAT declined from 2017 to 2018 and from 2018 to 2019.

Walmart Inc., cash operating taxes calculation

US$ in millions

	12 months ended	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Provision for income taxes
	Less: Deferred income tax expense (benefit)
	Add: Tax savings from interest expense, debt, capital lease and financing obligations
	Less: Tax imposed on investment income
	Cash operating 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
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Walmart Inc.’s cash operating taxes declined from 2017 to 2018 and from 2018 to 2019.

Walmart Inc., invested capital calculation (financing approach)

US$ in millions

		Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015	Jan 31, 2014
	Short-term borrowings
	Long-term debt due within one year
	Capital lease and financing obligations due within one year
	Long-term debt, excluding due within one year
	Long-term capital lease and financing obligations, excluding due within one year
	Operating lease liability¹
	Total reported debt & leases
	Total Walmart shareholders’ equity
	Net deferred tax (assets) liabilities²
	Equity equivalents³
	Accumulated other comprehensive (income) loss, net of tax⁴
	Redeemable noncontrolling interest
	Nonredeemable noncontrolling interest
	Adjusted total Walmart shareholders’ equity
	Construction in process⁵
	Available-for-sale securities⁶
	Invested capital

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See Details »

³ Addition of equity equivalents to total Walmart shareholders’ equity.

⁴ Removal of accumulated other comprehensive income.

⁵ Subtraction of construction in process.

⁶ Subtraction of available-for-sale securities.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Walmart Inc.’s invested capital declined from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Walmart Inc., cost of capital calculations


Equity²	÷	=	×		=
Debt, capital lease and financing obligations³	÷	=	×	× (1 – 21.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 21.00%)	=
Total:

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

¹ US$ in millions

² Equity. See Details »