Walmart Inc. (NYSE:WMT)

The financial ratios presented reveal several noteworthy trends over the six-year period ending January 31, 2025.

Return on Assets (ROA)

The ROA exhibited a declining trend from 6.29% in 2020 to a low of 4.8% in 2023, indicating a reduction in asset efficiency during this interval. However, there was a strong recovery in the subsequent years, reaching 6.15% in 2024 and substantially improving to 7.45% by 2025. This rebound suggests enhanced operational performance or better asset utilization towards the end of the period.

Financial Leverage

Financial leverage demonstrated a gradual downward trend overall. Starting at 3.17 times in 2020, it slightly decreased with minor fluctuations to 2.87 times by 2025. This reduction suggests a modest decline in the use of debt relative to equity, reflecting a potential strategy to reduce financial risk or optimize capital structure.

Return on Equity (ROE)

ROE mirrored the pattern observed in ROA but with larger magnitude. It declined from 19.93% in 2020 to a trough of 15.23% in 2023, indicating a decrease in shareholders' return during that time. Subsequent years showed a strong improvement, with ROE increasing to 18.5% in 2024 and peaking at 21.36% in 2025. This trend highlights a significant enhancement in profitability for equity holders, likely driven by improved operational results and the maintained but gradually reduced leverage.

Overall, the data suggests a period of declining profitability and asset efficiency until early 2023, followed by a phase of recovery and strengthening financial performance. The slight reduction in financial leverage alongside rising returns indicates effective management of debt and improved operational effectiveness contributing to enhanced equity returns.

Net Profit Margin

The net profit margin shows a declining trend from 2.86% in 2020 to 1.93% in 2023, indicating a reduction in profitability over these years. However, it exhibits a recovery in 2024 and 2025, rising back to 2.41% and 2.88% respectively, suggesting improved operational efficiency or cost management in the later periods.

Asset Turnover

Asset turnover demonstrates a consistent upward trajectory throughout the analyzed periods, increasing from 2.2 in 2020 and 2021 to 2.59 in 2025. This trend indicates enhanced efficiency in using assets to generate sales, reflecting likely improvements in operational management or asset utilization.

Financial Leverage

Financial leverage exhibits variability, starting at 3.17 in 2020, dipping to 2.94 in 2022, then returning near earlier levels at 3.17 in 2023 before gradually declining to 2.87 in 2025. This suggests a cautious management of debt levels with some fluctuation, potentially reflecting strategic adjustments in capital structure or debt repayment.

Return on Equity (ROE)

Return on equity mirrors some of the variability seen in profitability and leverage, declining from 19.93% in 2020 to a low of 15.23% in 2023, then rebounding significantly to 21.36% in 2025. This pattern may be attributable to the interplay between net profit margin, asset utilization, and leverage, with the improvement in later years possibly driven by stronger profits and efficient use of equity capital.

The financial ratios for the reported periods indicate notable fluctuations and trends in the company's operational efficiency, profitability, and capital structure.

Tax Burden

The tax burden ratio experienced variability throughout the periods, starting at 0.75 in early 2020, declining to a low of 0.66 in 2021, and then moving within a range of approximately 0.67 to 0.76 in subsequent years. This suggests a generally moderate level of tax impact on earnings with some period-to-period fluctuations.

Interest Burden

The interest burden ratio remained relatively stable, hovering between 0.88 and 0.9 across all periods. This stability implies consistent management of interest expenses relative to EBIT throughout the examined timeframe.

EBIT Margin

The EBIT margin exhibited a declining trend from 4.31% in 2020 to 3.22% in 2023, followed by a recovery to 4.2% by 2025. This pattern denotes a weakening profitability on operating income initially, with improvement noted in the most recent years, suggesting effective cost control or revenue enhancement strategies were implemented later in the period.

Asset Turnover

Asset turnover showed a persistent upward trend, growing from 2.2 in 2020 to 2.59 by 2025. This steady increase indicates improved efficiency in utilizing assets to generate sales.

Financial Leverage

Financial leverage fluctuated somewhat, declining from 3.17 in 2020 to 2.87 in 2025, with some intermediate variations. The overall downward path points to a gradual reduction in reliance on debt financing or increased equity base, potentially enhancing financial stability.

Return on Equity (ROE)

ROE decreased from 19.93% in 2020 to a low of 15.23% in 2023, followed by a recovery to 21.36% in 2025. This decline and subsequent rebound reflect initial strain on shareholder returns, likely due to operational or market challenges, with renewed profitability and efficiency contributing to stronger equity returns in the latter years.

In summary, the company managed to improve asset efficiency consistently and reduce leverage somewhat over time. Profitability measures dipped mid-period but showed recovery by 2025, indicating that the company may have faced interim challenges but responded with successful strategic adjustments. The stable interest burden ratio points to effective control of financing costs during these fluctuations.

The financial performance reveals discernible trends over the analyzed periods. In terms of profitability, the net profit margin experienced a decline from 2.86% in the initial year to a low point of 1.93% by January 31, 2023. This decline indicates a reduction in profit per unit of revenue generated during this interval. However, subsequent periods show a recovery, with the margin rising to 2.41% and then further to 2.88%, suggesting an improvement in cost management or revenue quality towards the end of the timeline.

The asset turnover ratio displays a continuous upward trend across the years, starting at 2.2 and gradually increasing to 2.59 by the final reported period. This ratio indicates enhanced efficiency in the use of assets to generate sales, pointing toward improved operational efficiency or more effective asset utilization within the organization.

Return on Assets (ROA), reflecting overall asset profitability, mirrors the fluctuations in both profit margin and asset turnover. Initially declining from 6.29% to 4.8%, the ROA subsequently rises sharply to 7.45%. The initial decrease may correspond to the combination of falling profit margins despite steady asset turnover. The later increase suggests that the augmentation in asset turnover, coupled with the recovery in net profit margin, results in more effective use of the asset base to produce net income.

In summary, the data indicates a period of challenged profitability followed by a strong recovery phase, accompanied by consistent gains in asset utilization efficiency. The interplay of these factors culminates in improved returns on the asset base in the latter years of the analyzed timeframe.

The financial ratios exhibit various trends over the examined periods, indicating shifts in operational efficiency, profitability, and burden metrics.

Tax Burden

The tax burden ratio fluctuates moderately, beginning at 0.75 in 2020, declining to 0.66 in 2021, then oscillating between 0.67 and 0.76 in subsequent years. This suggests variability in the effective tax rate impacting net profitability but no consistent directional trend.

Interest Burden

The interest burden remains relatively stable and high, ranging from 0.88 to 0.90 throughout the period. This stability indicates consistent management of interest expenses relative to earnings before interest and taxes, with minimal impact on profitability caused by interest costs.

EBIT Margin

The EBIT margin shows a declining trend from 4.31% in 2020 to a low of 3.22% in 2023, followed by a recovery to 4.2% in 2025. This pattern reflects a period of margin compression likely due to cost pressures or pricing challenges, with improvement in the latter years possibly due to operational efficiencies or better cost control.

Asset Turnover

Asset turnover exhibits a steady increase from 2.2 in 2020 to 2.59 in 2025, indicating enhanced efficiency in utilizing assets to generate sales. This improvement suggests stronger asset management and revenue generation capabilities over time.

Return on Assets (ROA)

ROA follows a somewhat cyclical pattern, decreasing from 6.29% in 2020 to a trough of 4.8% in 2023, then increasing to a peak of 7.45% by 2025. This reflects overall profitability influenced by the interplay of margin and asset turnover trends. The recovery and growth in ROA towards the final period signify improved overall returns from the asset base.

The financial ratios analyzed indicate several notable trends over a six-year period.

Tax Burden Ratio

The tax burden ratio exhibits fluctuations, generally ranging between 0.66 and 0.76. Initially, there was a decrease from 0.75 in 2020 to 0.66 in 2021, followed by alternating increases and decreases, rising again to 0.76 by 2025. This suggests variability in the proportion of earnings retained after tax, with a tendency towards a moderately higher tax burden in the later years.

Interest Burden Ratio

This ratio remains relatively stable throughout the period, hovering around 0.88 to 0.9. Such stability indicates consistent management of interest expenses relative to earnings before interest and taxes, suggesting no significant changes in financial leverage or interest obligations.

EBIT Margin

The EBIT margin shows a declining trend from 4.31% in 2020 to a low of 3.22% in 2023, signaling a gradual decrease in operating profitability. However, improvement is observed thereafter, rising to 4.2% by 2025. This recovery may reflect operational efficiencies or cost management efforts initiated in the later years.

Net Profit Margin

Similar to the EBIT margin, the net profit margin declines from 2.86% in 2020 to 1.93% in 2023, highlighting reduced overall profitability. Following this trough, the margin rebounds to 2.88% by 2025, aligning closely with the initial levels. The margin's recovery suggests improved control over both operating and non-operating expenses or favorable changes in tax and interest impacts.

Overall, the data reveals a period of contraction in profitability margins peaking around 2023, accompanied by a steady interest burden and varying tax burden. The subsequent recovery in profitability margins towards 2025 indicates a positive reversal possibly due to strategic initiatives or market conditions improving earnings quality and expense management.