Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Walmart Inc. (NYSE:WMT)

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Economic Value Added (EVA)

Advanced level

EVA is registered trademark of Stern Stewart.

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

Walmart Inc., economic profit calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (filing date: 2020-03-20), 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).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2020 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

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 decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Net Operating Profit after Taxes (NOPAT)

Walmart Inc., NOPAT calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
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: 2020-03-20), 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).

1 Elimination of deferred tax expense. See details »

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

3 2020 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

4 2020 Calculation
Tax benefit of interest expense, debt, capital lease and financing obligations = Adjusted interest expense, debt, capital lease and financing obligations × Statutory income tax rate
= × 21.00% =

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

6 2020 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

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 decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Cash Operating Taxes

Walmart Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
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: 2020-03-20), 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).

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 decreased from 2018 to 2019 and from 2019 to 2020.

Invested Capital

Walmart Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel LibreOffice Calc
Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Short-term borrowings
Long-term debt due within one year
Finance lease obligations due within one year
Capital lease and financing obligations due within one year
Long-term debt, excluding due within one year
Long-term finance lease obligations, 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
Noncontrolling interest
Adjusted total Walmart shareholders’ equity
Construction in process5
Available-for-sale securities6
Invested capital

Based on: 10-K (filing date: 2020-03-20), 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).

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 increased from 2018 to 2019 and from 2019 to 2020.

Cost of Capital

Walmart Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2020-03-20).

1 US$ in millions

2 Equity. See details »

3 Debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt and finance lease 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 »

3 Debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt and finance lease obligations3 ÷ = × × (1 – 33.80%) =
Operating lease liability4 ÷ = × × (1 – 33.80%) =
Total:

Based on: 10-K (filing date: 2018-03-30).

1 US$ in millions

2 Equity. See details »

3 Debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt and finance lease obligations3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2017-03-31).

1 US$ in millions

2 Equity. See details »

3 Debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt and finance lease obligations3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2016-03-30).

1 US$ in millions

2 Equity. See details »

3 Debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt and finance lease obligations3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2015-04-01).

1 US$ in millions

2 Equity. See details »

3 Debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

Walmart Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Amazon.com Inc.
Costco Wholesale Corp.
Dollar General Corp.
Home Depot Inc.
Lowe’s Cos. Inc.
Target Corp.
TJX Cos. Inc.

Based on: 10-K (filing date: 2020-03-20), 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).

1 Economic profit. See details »

2 Invested capital. See details »

3 2020 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Walmart Inc.’s economic spread ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

Economic Profit Margin

Walmart Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Selected Financial Data (US$ in millions)
Economic profit1
Net sales
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Amazon.com Inc.
Costco Wholesale Corp.
Dollar General Corp.
Home Depot Inc.
Lowe’s Cos. Inc.
Target Corp.
TJX Cos. Inc.

Based on: 10-K (filing date: 2020-03-20), 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).

1 Economic profit. See details »

2 2020 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company’s profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Walmart Inc.’s economic profit margin deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.