Walmart Inc. (NYSE:WMT)

The financial data reveals several noteworthy trends over the six-year period under consideration.

Net Operating Profit After Taxes (NOPAT)

The NOPAT values demonstrate fluctuations with an initial slight decrease from 18,200 million USD in 2020 to 18,130 million USD in 2021, followed by a more pronounced decline to 15,307 million USD in 2022 and further down to 13,880 million USD in 2023. Subsequently, a strong recovery is observed with an increase to 18,517 million USD in 2024 and further growth to 22,003 million USD in 2025.

Cost of Capital

The cost of capital shows a gradual and consistent upward trend throughout the period, increasing from 8.97% in 2020 to 9.84% in 2025. This steady rise suggests growing expense or risk perception associated with the company’s invested capital over time.

Invested Capital

Invested capital decreases from 167,329 million USD in 2020 to a low of 149,558 million USD in 2023, indicating possible divestitures or efficiency improvements during this period. However, from 2024 onwards, invested capital begins to increase again, reaching 161,279 million USD by 2025, which may imply renewed investment or expansion initiatives.

Economic Profit

Economic profit closely follows the fluctuations in NOPAT but with higher volatility. It declines steeply from 3,194 million USD in 2020 to just 600 million USD in 2022, turning negative at -230 million USD in 2023. This negative economic profit suggests that, in 2023, the company failed to generate returns exceeding its cost of capital. However, economic profit rebounds sharply in 2024 to 3,564 million USD and further improves to 6,136 million USD in 2025, indicating a significant enhancement in value creation beyond capital costs.

Overall, the data depicts a period of margin compression and reduced capital efficiency up to 2023, followed by a robust recovery phase. The rising cost of capital throughout the timeframe suggests increasing capital market expectations or elevated operational risks. The resurgence in both NOPAT and economic profit after 2023 underscores successful strategic adjustments or market conditions that restored profitability and value generation. The invested capital trend supports this narrative, as initial contraction gave way to renewed investment, possibly fueling the later recovery. Continuous monitoring of cost of capital trends remains advisable given its persistent upward trajectory.

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.

Economic Profit

The economic profit shows considerable variability over the observed periods. It begins at a high level of 3,194 million US dollars in early 2020, followed by a slight decline to 2,975 million in 2021. A steep drop occurs in 2022 to 600 million, then a negative value of -230 million is reported in 2023, indicating a loss in economic profit for that year. Subsequently, there is a strong recovery with economic profit increasing significantly to 3,564 million in 2024 and further rising to 6,136 million in 2025, representing the highest value in the observed timeframe.

Invested Capital

Invested capital demonstrates a generally decreasing trend from 167,329 million US dollars in 2020 to a low of 149,558 million in 2023. Following this decline, the invested capital experiences a rebound, increasing to 155,389 million in 2024 and further to 161,279 million in 2025. Despite fluctuations, the invested capital remains lower in 2025 compared to its initial level in 2020.

Economic Spread Ratio

The economic spread ratio, indicating the return above the cost of capital, mirrors the pattern observed in economic profit. Starting at 1.91% in 2020, it slightly decreases to 1.81% in 2021 and then sharply falls to 0.38% in 2022. In 2023, the ratio turns negative to -0.15%, signaling a period where returns failed to cover capital costs. A notable recovery occurs afterward, with the ratio increasing to 2.29% in 2024 and reaching 3.80% in 2025, the highest ratio recorded in the period under review.

Net Sales Trend

The net sales figures exhibit a consistent upward trajectory from 2020 through 2025. Starting at approximately $519.9 billion in 2020, sales increased steadily each year, reaching about $674.5 billion by 2025. This represents a robust growth trend, indicating expanding revenue generation over the period under review.

Economic Profit Dynamics

Economic profit shows notable volatility throughout the analyzed years. Initially, the economic profit was strong at $3,194 million in 2020, followed by a slight decline to $2,975 million in 2021. A sharp decrease occurred in 2022, with economic profit plummeting to $600 million, then turning negative in 2023 at -$230 million, suggesting a period of economic loss. Subsequently, there was a marked recovery, with economic profit rising to $3,564 million in 2024 and further increasing significantly to $6,136 million in 2025.

Economic Profit Margin Analysis

The economic profit margin percentage mirrors the fluctuations seen in economic profit values. Starting at 0.61% in 2020, the margin declined progressively to 0.11% in 2022 and fell into negative territory at -0.04% in 2023. This negative margin corresponds with the economic loss reported that year. Following this downturn, the margin improved to 0.55% in 2024 and further enhanced to 0.91% in 2025, reflecting stronger profitability relative to net sales.

Overall Insights

The data suggests a period of growth in net sales accompanied by volatility in economic profitability between 2020 and 2025. The significant dip in economic profit and margin in 2022 and 2023 may indicate increased costs or challenges impacting profitability despite rising sales. The rapid recovery in both economic profit and margin in the last two years implies effective management actions or favorable external conditions that restored and improved financial performance.