Walmart Inc. (NYSE:WMT)

The analysis of the quarterly financial ratios reveals notable trends in the company's profitability and financial structure over the observed periods.

Return on Assets (ROA)

The ROA demonstrates fluctuations with a general upward trajectory over the long term. Initially, the ROA was relatively high, peaking near 7.87%, before experiencing a decline to lows around 3.28%. Subsequently, the metric exhibits recovery phases with values surpassing 7% in several later quarters. This pattern indicates varying efficiency in asset utilization, with recent periods showing an improvement in generating profits from the assets employed.

Financial Leverage

The financial leverage ratio remains relatively stable throughout the periods, fluctuating narrowly around 3.0 to 3.4. This stability suggests a consistent approach to capital structure management. Slight decreases in leverage ratios during certain quarters indicate modest reductions in reliance on debt, but no drastic changes are apparent, implying steady debt levels relative to equity overall.

Return on Equity (ROE)

ROE follows a pattern similar to ROA but with higher volatility and magnitude, reflecting the amplified effects of financial leverage on shareholder returns. The ratio starts at roughly 22%, climbs to over 24%, then sharply declines to single-digit values before rebounding robustly above 20% in some quarters. This cycle points to periods of reduced profitability or operational challenges followed by strong recoveries, signaling an overall positive trend in shareholder value creation but with intermittent setbacks.

In summary, the company exhibits resilience in profitability metrics with ROA and ROE showing recovery after downturns. The consistent financial leverage suggests cautious debt management strategies. The oscillations in returns underscore the importance of monitoring operational efficiency closely, yet the prevailing upward trends in ROA and ROE suggest improving financial performance and effective equity utilization over time.

Net Profit Margin

The net profit margin exhibits a fluctuating trend over the observed periods, beginning at 2.83% and generally experiencing modest variations around an average level between 1.4% and 3.3%. Notably, the margin decreased from mid-2020 into late 2021, reaching a low of approximately 1.41%, followed by a recovery trend from early 2022 onward. The margin consistently improved through 2023 and early 2024, peaking around 3.29% in late 2025. This pattern suggests phases of contraction and expansion in profitability relative to sales, with a recent upward momentum indicating improving profitability.

Asset Turnover

Asset turnover ratios remained relatively stable throughout the timeline, fluctuating narrowly between approximately 2.17 and 2.59. Initial values hovered around 2.28 and then experienced minor dips and rises, reaching a series high near 2.59 in the middle periods of 2023 and 2024. The ratio showed a slight downward trend toward the final periods, ending at 2.41. This stability implies a consistent efficiency in using assets to generate revenue, with no dramatic shifts in operational efficiency observed.

Financial Leverage

The financial leverage ratio showed variability across the quarters, starting at 3.41 and declining to around 2.94 in early 2022. Subsequent periods saw increases and decreases, with peaks around 3.43 in late 2022 and a general narrowing range between 2.87 and 3.38 thereafter. Toward the later periods, the ratio stabilized near 3.0. These fluctuations indicate changes in the company's reliance on debt financing or equity structure but within a moderate range that suggests balanced leverage management.

Return on Equity (ROE)

ROE demonstrated considerable volatility during the reported timeline, starting at 22.02% and reaching peaks above 24% early on, followed by a significant drop to single digits (around 9.75%) by late 2021. From early 2022 onward, ROE experienced a general recovery and upward trend, exceeding 23% in several quarters between 2023 and late 2025. This variability reflects shifts in profitability relative to shareholder equity, potentially linked to changes in profit margin, asset turnover, and financial leverage. The recovery and strengthening ROE in recent periods are indicative of enhanced value generation for equity holders.

Tax Burden

The tax burden ratio exhibited a gradual decline from the early periods, starting at 0.75 and reaching a minimum around 0.61 in late 2021, indicating a lower effective tax rate during this phase. Subsequently, the ratio rebounded and stabilized around 0.74 to 0.77 from early 2022 onwards, suggesting a return to higher tax expenses relative to pre-tax income.

Interest Burden

This ratio remained relatively stable throughout the observed periods, fluctuating narrowly between 0.86 and 0.92. Such consistency reflects steady interest expense levels relative to earnings before interest and taxes, implying no significant changes in financing costs or interest coverage over time.

EBIT Margin

The EBIT margin showed considerable variability. It peaked at 5.32% in late 2020, followed by a decline to as low as 2.47% in late 2022, indicating pressure on operating profitability. A recovery trend is observed thereafter, with margins climbing back towards approximately 4.7% by the last recorded quarter, reflecting improved operational performance.

Asset Turnover

Asset turnover ratios displayed a generally stable pattern slightly above 2.3 times, with minor fluctuations across quarters. There was a subtle positive trend from early 2022, where the ratio increased towards 2.59 before a slight dip towards the end of the period. This suggests relatively consistent efficiency in utilizing assets to generate sales, with some marginal improvements in recent quarters.

Financial Leverage

Financial leverage ratios fluctuated between approximately 2.87 and 3.43, demonstrating moderate variability. A declining trend from 3.41 in early 2020 to lows around 2.87 to 3.0 in the most recent quarters suggests a gradual reduction in leverage, potentially indicating a more conservative capital structure or reduction in debt levels.

Return on Equity (ROE)

ROE experienced significant volatility, starting high at over 22% and peaking at 24.24% in late 2020. It then decreased sharply to below 10% in late 2021, consistent with declines in other profitability metrics. A marked recovery followed, with ROE rising back above 23% by mid-2024. The movement reflects a close interplay between margins, leverage, and asset utilization impacting shareholder returns over the periods analyzed.

Net Profit Margin

The net profit margin shows variability across the reported quarters, beginning at 2.83% and experiencing fluctuations in the following periods. There is a noticeable decline reaching a low of 1.41%, followed by a general upward trend, culminating in a peak of 3.29% in the last reported quarter. The overall pattern indicates recovery phases after declines, suggesting cyclical profitability influenced by operational or market conditions.

Asset Turnover

Asset turnover is relatively stable throughout the quarters, with values ranging from approximately 2.17 to 2.59. Initial periods show a slight decrease but stabilize and then experience marginal increases towards the later quarters. The metric indicates consistent efficiency in utilizing assets to generate revenue, with minor fluctuations but no sharp deviations from the mean.

Return on Assets (ROA)

ROA exhibits a pattern similar to net profit margin, with early high values near 7.87%, followed by a significant dip to a low around 3.28%. Subsequent quarters show recovery, with ROA increasing steadily and reaching nearly 7.94% in the most recent period. This rebound highlights improved profitability relative to asset base after a period of underperformance, reflecting more effective asset utilization and cost management in recent quarters.

Summary

The financial indicators reveal a cycle of contraction and recovery in profitability metrics, with net profit margin and ROA demonstrating similar trends of decline followed by improvement. Asset turnover remains comparatively steady, suggesting that revenue generation relative to assets was maintained despite profit margin volatility. The resurgence in both ROA and net profit margin in the latest quarters points to enhanced operational efficiency and profitability.

The financial data indicates varying performance trends over the periods analyzed. Several key profitability and efficiency metrics reveal insights into operational performance and cost management.

Tax Burden

This ratio shows a slight decrease from 0.75 to a low of 0.61 within mid-2021, suggesting a temporary reduction in the effective tax rate during that period. Following this, the tax burden trends upward again, stabilizing around 0.74 to 0.77 in the most recent quarters, implying a return to higher tax expenses relative to earnings.

Interest Burden

The interest burden remains relatively stable, oscillating narrowly between 0.86 and 0.92 throughout the entire timeline. This indicates consistent interest expense management with minor fluctuations reflecting small changes in financing cost or debt levels.

EBIT Margin

The earnings before interest and taxes (EBIT) margin peaked early at 5.32%, then generally declined, reaching a low near 2.47% around late 2022. Afterwards, it gradually recovered, attaining values around 4.7% in the latest quarter. The margin's volatility reflects changes in operating profitability, possibly influenced by cost pressures or sales mix variations.

Asset Turnover

The asset turnover ratio exhibits minor fluctuations, moving mostly within a narrow band between 2.17 and 2.59. There is a slight upward trend noticeable in the later periods, suggesting somewhat improved efficiency in using assets to generate sales over time.

Return on Assets (ROA)

ROA shows a pattern aligned with EBIT margin trends, starting high at about 7.87%, declining to approximately 3.28% mid-period, then rebounding to near 7.94% in the most recent quarter. This indicates the company's ability to generate returns on its asset base experienced a downturn followed by recovery, likely driven by changes in operating income and efficiency of asset utilization.

Overall, the data reflects a period of fluctuating profitability and efficiency, with improved asset utilization and a gradual restoration of operational margins and returns after mid-term dips. Interest costs remained steady, while tax burdens moderated then stabilized, influencing net profitability dynamics.

Tax Burden

The tax burden ratio exhibits moderate fluctuations over the observed periods. Initially, it declines steadily from 0.75 to a low around 0.61 in late 2021, indicating a period of relatively reduced tax obligations. From early 2022 onwards, the ratio rebounds, stabilizing around 0.74 to 0.77 in the most recent quarters, suggesting consistent tax liabilities relative to pre-tax income in the latter periods.

Interest Burden

The interest burden ratio remains relatively stable throughout the entire timeframe, mostly ranging between 0.86 and 0.92. Minor oscillations are visible but there is no clear upward or downward trend, implying consistent interest expenses in relation to earnings before interest and taxes across the quarters.

EBIT Margin

The EBIT margin shows more pronounced variability. Starting from 4.25% in the second quarter of 2020, it initially rises to a peak of 5.32% before declining sharply through early 2022, reaching a low of approximately 2.47%. Subsequently, the margin recovers steadily, reaching levels above 4.4% in the latest reported periods. This pattern suggests volatile operational profit generation but a general improvement in profitability from mid-2022 onwards.

Net Profit Margin

Net profit margin trajectories mirror those of EBIT margin but at lower absolute values, indicating the combined effects of tax and interest burdens. The margin peaks near 3.62% in late 2020, dips to around 1.41% by late 2021, and then increases again, reaching over 3.2% by the most recent quarter. This trend reflects substantial compression in profitability through 2021, with a gradual recovery and strengthening of net earnings starting in 2022 and continuing steadily thereafter.