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

Walmart Inc. (NYSE:WMT)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

Beginner level

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Walmart Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Jan 31, 2021 16.69% = 5.35% × 3.12
Jan 31, 2020 19.93% = 6.29% × 3.17
Jan 31, 2019 9.20% = 3.04% × 3.02
Jan 31, 2018 12.66% = 4.82% × 2.63
Jan 31, 2017 17.54% = 6.86% × 2.56
Jan 31, 2016 18.24% = 7.36% × 2.48

Based on: 10-K (filing date: 2021-03-19), 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2021 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Walmart Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jan 31, 2021 16.69% = 2.43% × 2.20 × 3.12
Jan 31, 2020 19.93% = 2.86% × 2.20 × 3.17
Jan 31, 2019 9.20% = 1.31% × 2.33 × 3.02
Jan 31, 2018 12.66% = 1.99% × 2.42 × 2.63
Jan 31, 2017 17.54% = 2.83% × 2.42 × 2.56
Jan 31, 2016 18.24% = 3.07% × 2.40 × 2.48

Based on: 10-K (filing date: 2021-03-19), 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2021 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Walmart Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jan 31, 2021 16.69% = 0.66 × 0.90 × 4.09% × 2.20 × 3.12
Jan 31, 2020 19.93% = 0.75 × 0.88 × 4.31% × 2.20 × 3.17
Jan 31, 2019 9.20% = 0.61 × 0.82 × 2.61% × 2.33 × 3.02
Jan 31, 2018 12.66% = 0.68 × 0.86 × 3.39% × 2.42 × 2.63
Jan 31, 2017 17.54% = 0.69 × 0.89 × 4.62% × 2.42 × 2.56
Jan 31, 2016 18.24% = 0.69 × 0.89 × 4.97% × 2.40 × 2.48

Based on: 10-K (filing date: 2021-03-19), 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2021 year is the decrease in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

Walmart Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Jan 31, 2021 5.35% = 2.43% × 2.20
Jan 31, 2020 6.29% = 2.86% × 2.20
Jan 31, 2019 3.04% = 1.31% × 2.33
Jan 31, 2018 4.82% = 1.99% × 2.42
Jan 31, 2017 6.86% = 2.83% × 2.42
Jan 31, 2016 7.36% = 3.07% × 2.40

Based on: 10-K (filing date: 2021-03-19), 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).

The primary reason for the decrease in return on assets ratio (ROA) over 2021 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Walmart Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jan 31, 2021 5.35% = 0.66 × 0.90 × 4.09% × 2.20
Jan 31, 2020 6.29% = 0.75 × 0.88 × 4.31% × 2.20
Jan 31, 2019 3.04% = 0.61 × 0.82 × 2.61% × 2.33
Jan 31, 2018 4.82% = 0.68 × 0.86 × 3.39% × 2.42
Jan 31, 2017 6.86% = 0.69 × 0.89 × 4.62% × 2.42
Jan 31, 2016 7.36% = 0.69 × 0.89 × 4.97% × 2.40

Based on: 10-K (filing date: 2021-03-19), 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).

The primary reason for the decrease in return on assets ratio (ROA) over 2021 year is the decrease in effect of taxes measured by tax burden ratio.

Disaggregation of Net Profit Margin

Walmart Inc., decomposition of net profit margin ratio

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jan 31, 2021 2.43% = 0.66 × 0.90 × 4.09%
Jan 31, 2020 2.86% = 0.75 × 0.88 × 4.31%
Jan 31, 2019 1.31% = 0.61 × 0.82 × 2.61%
Jan 31, 2018 1.99% = 0.68 × 0.86 × 3.39%
Jan 31, 2017 2.83% = 0.69 × 0.89 × 4.62%
Jan 31, 2016 3.07% = 0.69 × 0.89 × 4.97%

Based on: 10-K (filing date: 2021-03-19), 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).

The primary reason for the decrease in net profit margin ratio over 2021 year is the decrease in effect of taxes measured by tax burden ratio.