Stock Analysis on Net

Walmart Inc. (NYSE:WMT) 

Economic Value Added (EVA)

Microsoft Excel

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
12 months ended: Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Net operating profit after taxes (NOPAT)1 22,003 18,517 13,880 15,307 18,130 18,200
Cost of capital2 9.75% 9.54% 9.35% 9.33% 9.14% 8.89%
Invested capital3 161,279 155,389 149,558 156,225 164,411 167,329
 
Economic profit4 6,276 3,694 (108) 728 3,104 3,320

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 22,0039.75% × 161,279 = 6,276


The financial data reflects a series of notable trends over the observed periods, indicating fluctuations in profitability, capital efficiency, and overall economic value creation.

Net Operating Profit After Taxes (NOPAT)
NOPAT remained relatively stable between January 2020 and January 2021, with a minor decrease from 18,200 million US$ to 18,130 million US$. However, the following two years saw a consistent decline, reaching 13,880 million US$ by January 2023. A significant recovery occurred in the last two periods, with NOPAT increasing to 18,517 million US$ in 2024 and further to 22,003 million US$ in 2025, indicating an improvement in operational profitability.
Cost of Capital
The cost of capital exhibited a gradual but steady increase throughout the entire timeframe, rising from 8.89% in 2020 to 9.75% in 2025. This steady rise suggests higher capital costs, potentially reflecting increased risk perceptions, inflationary pressures, or changing capital market conditions.
Invested Capital
Invested capital declined consistently from 167,329 million US$ in 2020 to 149,558 million US$ in 2023, indicating a reduction in the capital base. However, this trend reversed in the last two years, with invested capital increasing to 155,389 million US$ in 2024 and further to 161,279 million US$ in 2025. The earlier decline followed by a rebound may be indicative of strategic capital allocation adjustments or divestitures followed by new investments.
Economic Profit
Economic profit, which measures value creation beyond the cost of capital, mirrored the NOPAT trend with an initial decline from 3,320 million US$ in 2020 to slightly negative territory (-108 million US$) by 2023. This period highlights reduced value generation, likely impacted by the declining NOPAT and rising cost of capital. Subsequently, economic profit increased strongly, reaching 3,694 million US$ in 2024 and 6,276 million US$ in 2025, signaling a robust recovery in value creation and operational efficiency.

Overall, the data reveals a period of contraction in operating profitability and capital investment followed by a notable turnaround in the most recent years. The rising cost of capital throughout suggests a more challenging financial environment; however, the company's improved NOPAT and economic profit indicate successful adaptation and enhanced value creation during the later periods.


Net Operating Profit after Taxes (NOPAT)

Walmart Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Consolidated net income attributable to Walmart 19,436 15,511 11,680 13,673 13,510 14,881
Deferred income tax expense (benefit)1 (663) (171) 430 (759) 1,998 329
Increase (decrease) in equity equivalents2 (663) (171) 430 (759) 1,998 329
Interest expense, debt and finance lease 2,728 2,683 2,128 1,994 2,315 2,599
Interest expense, operating lease liability3 931 924 858 855 877 970
Adjusted interest expense, debt and finance lease 3,659 3,607 2,986 2,849 3,192 3,569
Tax benefit of interest expense, debt and finance lease4 (768) (757) (627) (598) (670) (750)
Adjusted interest expense, debt and finance lease, after taxes5 2,891 2,849 2,359 2,251 2,522 2,820
Interest income (483) (546) (254) (158) (121) (189)
Investment income, before taxes (483) (546) (254) (158) (121) (189)
Tax expense (benefit) of investment income6 101 115 53 33 25 40
Investment income, after taxes7 (382) (431) (201) (125) (96) (149)
Net income (loss) attributable to noncontrolling interest 721 759 (388) 267 196 320
Net operating profit after taxes (NOPAT) 22,003 18,517 13,880 15,307 18,130 18,200

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

1 Elimination of deferred tax expense. See details »

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

3 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 14,324 × 6.50% = 931

4 2025 Calculation
Tax benefit of interest expense, debt and finance lease = Adjusted interest expense, debt and finance lease × Statutory income tax rate
= 3,659 × 21.00% = 768

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

6 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 483 × 21.00% = 101

7 Elimination of after taxes investment income.


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.

Cash Operating Taxes

Walmart Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Provision for income taxes 6,152 5,578 5,724 4,756 6,858 4,915
Less: Deferred income tax expense (benefit) (663) (171) 430 (759) 1,998 329
Add: Tax savings from interest expense, debt and finance lease 768 757 627 598 670 750
Less: Tax imposed on investment income 101 115 53 33 25 40
Cash operating taxes 7,482 6,392 5,868 6,080 5,505 5,296

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).


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.


Invested Capital

Walmart Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Short-term borrowings 3,068 878 372 410 224 575
Long-term debt due within one year 2,598 3,447 4,191 2,803 3,115 5,362
Finance lease obligations due within one year 800 725 567 511 491 511
Long-term debt, excluding due within one year 33,401 36,132 34,649 34,864 41,194 43,714
Long-term finance lease obligations, excluding due within one year 5,923 5,709 4,843 4,243 3,847 4,307
Operating lease liability1 14,324 14,430 14,301 14,492 14,375 17,964
Total reported debt & leases 60,114 61,321 58,923 57,323 63,246 72,433
Total Walmart shareholders’ equity 91,013 83,861 76,693 83,253 80,925 74,669
Net deferred tax (assets) liabilities2 5,271 5,585 5,766 5,444 6,609 4,290
Equity equivalents3 5,271 5,585 5,766 5,444 6,609 4,290
Accumulated other comprehensive (income) loss, net of tax4 13,605 11,302 11,680 8,766 11,766 12,805
Redeemable noncontrolling interest 271 222 237
Nonredeemable noncontrolling interest 6,408 6,488 7,061 8,638 6,606 6,883
Adjusted total Walmart shareholders’ equity 116,568 107,458 101,437 106,101 105,906 98,647
Construction in process5 (15,403) (13,390) (10,802) (7,199) (4,741) (3,751)
Invested capital 161,279 155,389 149,558 156,225 164,411 167,329

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

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.


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.

Cost of Capital

Walmart Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 684,238 684,238 ÷ 742,143 = 0.92 0.92 × 10.25% = 9.45%
Debt and finance lease obligations3 43,581 43,581 ÷ 742,143 = 0.06 0.06 × 4.41% × (1 – 21.00%) = 0.20%
Operating lease liability4 14,324 14,324 ÷ 742,143 = 0.02 0.02 × 6.50% × (1 – 21.00%) = 0.10%
Total: 742,143 1.00 9.75%

Based on: 10-K (reporting date: 2025-01-31).

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 488,962 488,962 ÷ 549,135 = 0.89 0.89 × 10.25% = 9.12%
Debt and finance lease obligations3 45,743 45,743 ÷ 549,135 = 0.08 0.08 × 4.28% × (1 – 21.00%) = 0.28%
Operating lease liability4 14,430 14,430 ÷ 549,135 = 0.03 0.03 × 6.40% × (1 – 21.00%) = 0.13%
Total: 549,135 1.00 9.54%

Based on: 10-K (reporting date: 2024-01-31).

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 375,801 375,801 ÷ 434,053 = 0.87 0.87 × 10.25% = 8.87%
Debt and finance lease obligations3 43,951 43,951 ÷ 434,053 = 0.10 0.10 × 4.06% × (1 – 21.00%) = 0.32%
Operating lease liability4 14,301 14,301 ÷ 434,053 = 0.03 0.03 × 6.00% × (1 – 21.00%) = 0.16%
Total: 434,053 1.00 9.35%

Based on: 10-K (reporting date: 2023-01-31).

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 400,219 400,219 ÷ 462,256 = 0.87 0.87 × 10.25% = 8.87%
Debt and finance lease obligations3 47,545 47,545 ÷ 462,256 = 0.10 0.10 × 3.86% × (1 – 21.00%) = 0.31%
Operating lease liability4 14,492 14,492 ÷ 462,256 = 0.03 0.03 × 5.90% × (1 – 21.00%) = 0.15%
Total: 462,256 1.00 9.33%

Based on: 10-K (reporting date: 2022-01-31).

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 371,093 371,093 ÷ 444,270 = 0.84 0.84 × 10.25% = 8.56%
Debt and finance lease obligations3 58,802 58,802 ÷ 444,270 = 0.13 0.13 × 4.05% × (1 – 21.00%) = 0.42%
Operating lease liability4 14,375 14,375 ÷ 444,270 = 0.03 0.03 × 6.10% × (1 – 21.00%) = 0.16%
Total: 444,270 1.00 9.14%

Based on: 10-K (reporting date: 2021-01-31).

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 322,795 322,795 ÷ 403,921 = 0.80 0.80 × 10.25% = 8.19%
Debt and finance lease obligations3 63,162 63,162 ÷ 403,921 = 0.16 0.16 × 4.16% × (1 – 21.00%) = 0.51%
Operating lease liability4 17,964 17,964 ÷ 403,921 = 0.04 0.04 × 5.40% × (1 – 21.00%) = 0.19%
Total: 403,921 1.00 8.89%

Based on: 10-K (reporting date: 2020-01-31).

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
Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 6,276 3,694 (108) 728 3,104 3,320
Invested capital2 161,279 155,389 149,558 156,225 164,411 167,329
Performance Ratio
Economic spread ratio3 3.89% 2.38% -0.07% 0.47% 1.89% 1.98%
Benchmarks
Economic Spread Ratio, Competitors4
Costco Wholesale Corp. 8.81% 3.97% 8.03% 6.41% 2.63%
Target Corp. 0.13% 1.44% -0.33% 12.56% 3.04% 1.65%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 6,276 ÷ 161,279 = 3.89%

4 Click competitor name to see calculations.


The financial data reveals notable fluctuations in the economic profit, invested capital, and economic spread ratio over the observed periods. The analysis highlights both downturns and recoveries in key financial indicators, suggesting variations in operational efficiency and capital utilization.

Economic Profit
The economic profit displayed an initial decline from 3,320 million US$ in 2020 to 3,104 million US$ in 2021. This decreasing trend continued sharply into 2022, falling to 728 million US$. In 2023, economic profit turned negative, reaching -108 million US$, indicating a period of economic loss. However, the trend reversed in subsequent years, with economic profit rising significantly to 3,694 million US$ in 2024 and further increasing to 6,276 million US$ by 2025.
Invested Capital
Invested capital followed a downward trend from 167,329 million US$ in 2020 to its lowest point at 149,558 million US$ in 2023. Following this trough, there was a recovery phase, as invested capital increased to 155,389 million US$ in 2024 and continued to grow to 161,279 million US$ in 2025. The overall pattern suggests a cautious reduction in invested capital followed by renewed investment activity.
Economic Spread Ratio
The economic spread ratio, representing the spread of returns over the cost of capital, decreased from 1.98% in 2020 to 1.89% in 2021, and then sharply declined to 0.47% in 2022. It turned negative to -0.07% in 2023, correlating with the negative economic profit observed in the same year. Subsequently, the ratio improved markedly, reaching 2.38% in 2024 and rising further to 3.89% by 2025, indicating stronger returns relative to capital costs toward the end of the analyzed period.

In summary, the data depicts a period of contraction and economic challenges culminating around 2023, with declines in economic profit, invested capital, and returns over cost of capital. A significant rebound is evident in 2024 and 2025, both in terms of profitability and capital deployment efficiency. This recovery phase suggests enhanced operational performance and improved capital management strategies during the latter part of the examined timeline.


Economic Profit Margin

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

Microsoft Excel
Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 6,276 3,694 (108) 728 3,104 3,320
Net sales 674,538 642,637 605,881 567,762 555,233 519,926
Performance Ratio
Economic profit margin2 0.93% 0.57% -0.02% 0.13% 0.56% 0.64%
Benchmarks
Economic Profit Margin, Competitors3
Costco Wholesale Corp. 1.16% 0.58% 1.14% 0.95% 0.47%
Target Corp. 0.04% 0.46% -0.09% 3.57% 0.99% 0.57%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

1 Economic profit. See details »

2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × 6,276 ÷ 674,538 = 0.93%

3 Click competitor name to see calculations.


The analyzed financial data reveals several significant trends in the company's performance over the six-year period ending January 31, 2025.

Economic Profit
The economic profit experienced a notable decline between 2020 and 2023, starting at 3,320 million US dollars in 2020 and dropping sharply to a negative value of -108 million US dollars by 2023. This indicates a period where the company generated less profit than the cost of capital. However, beginning in 2024, economic profit rebounded significantly, reaching 3,694 million US dollars and further increasing to 6,276 million US dollars by 2025. This positive turnaround suggests an improvement in operational efficiency or profitability after the dip.
Net Sales
Net sales showed a consistent upward trend across all observed years, increasing from 519,926 million US dollars in 2020 to 674,538 million US dollars in 2025. This steady growth indicates sustained revenue expansion, with yearly increases reinforcing the company’s ability to generate higher sales volume or value over time.
Economic Profit Margin
The economic profit margin closely mirrors the trend of economic profit, starting at 0.64% in 2020, declining to a low of -0.02% in 2023, and improving thereafter to 0.93% in 2025. This fluctuation reflects the company’s varying effectiveness in converting sales into economic profit relative to invested capital. The negative margin in 2023 indicates a loss in economic value creation during that period, followed by a recovery that surpasses the earlier years by 2025.

Overall, the data suggest that despite continuous sales growth, the company faced challenges in maintaining economic profitability between 2021 and 2023. The subsequent recovery in economic profit and margin reflects improved financial health and value creation in the later years. Monitoring the factors that contributed to this rebound will be essential for sustaining long-term profitability.