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

Walmart Inc., decomposition of ROE

	ROE	=	ROA	×	Leverage

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
Jan 31, 2015	20.10%	=	8.03%	×	2.50
Jan 31, 2014	21.01%	=	7.83%	×	2.69

The primary reason for the decrease in Return on Equity (ROE) over 2019 year is the decrease in profitability measured by Return on Assets (ROA).

Walmart Inc., decomposition of ROE

	ROE	=	Net Profit Margin	×	Asset Turnover	×	Leverage

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
Jan 31, 2015	20.10%	=	3.39%	×	2.37	×	2.50
Jan 31, 2014	21.01%	=	3.39%	×	2.31	×	2.69

The primary reason for the decrease in Return on Equity (ROE) over 2019 year is the decrease in profitability measured by Net Profit Margin.

Walmart Inc., decomposition of ROE

	ROE	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover	×	Leverage

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
Jan 31, 2015	20.10%	=	0.67	×	0.91	×	5.56%	×	2.37	×	2.50
Jan 31, 2014	21.01%	=	0.66	×	0.91	×	5.59%	×	2.31	×	2.69

The primary reason for the decrease in Return on Equity (ROE) over 2019 year is the decrease in operating profitability measured by EBIT Margin.

Walmart Inc., decomposition of ROA

	ROA	=	Net Profit Margin	×	Asset Turnover

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
Jan 31, 2015	8.03%	=	3.39%	×	2.37
Jan 31, 2014	7.83%	=	3.39%	×	2.31

The primary reason for the decrease in Return on Assets (ROA) over 2019 year is the decrease in profitability measured by Net Profit Margin.

Walmart Inc., decomposition of ROA

	ROA	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover

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
Jan 31, 2015	8.03%	=	0.67	×	0.91	×	5.56%	×	2.37
Jan 31, 2014	7.83%	=	0.66	×	0.91	×	5.59%	×	2.31

The primary reason for the decrease in Return on Assets (ROA) over 2019 year is the decrease in operating profitability measured by EBIT Margin.

Walmart Inc., decomposition of Net Profit Margin

	Net Profit Margin	=	Tax Burden	×	Interest Burden	×	EBIT Margin

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%
Jan 31, 2015	3.39%	=	0.67	×	0.91	×	5.56%
Jan 31, 2014	3.39%	=	0.66	×	0.91	×	5.59%

The primary reason for the decrease in Net Profit Margin over 2019 year is the decrease in operating profitability measured by EBIT Margin.

Walmart Inc. (WMT)

DuPont Analysis: Decomposition of ROE