Walmart Inc. (NYSE:WMT)

The analysis of the liquidity ratios over the observed periods reveals distinct patterns and fluctuations that provide insights into the company's short-term financial health and ability to meet its obligations.

Current Ratio

The current ratio displayed a gradual improvement from April 2020 through January 2021, rising from 0.77 to a peak nearing 0.97. This indicates an enhanced capacity to cover current liabilities with current assets during this initial phase. Thereafter, the ratio slightly declined and stabilized mostly in the range of 0.80 to 0.85, with minor fluctuations. The relatively steady values below 1.0 suggest that current liabilities consistently exceed current assets throughout the later periods, pointing to modest liquidity risk or a strategic asset-liability structure.

Quick Ratio

The quick ratio mirrored some movements of the current ratio initially, with an increase from 0.24 in April 2020 to a high of 0.36 in July 2021, indicating improved liquidity when excluding inventories. However, following this peak, the quick ratio declined and settled between 0.18 and 0.22 in the subsequent periods. This lower and relatively stable range implies a conservative liquid asset position relative to current liabilities, possibly reflecting reliance on inventories or less liquid assets to uphold current obligations.

Cash Ratio

The cash ratio consistently remained the lowest among the liquidity metrics, beginning at 0.18 in April 2020, peaking modestly at 0.28 in April and July 2021, and then declining steadily to stabilize around 0.09 towards the latter periods. This indicates that immediately available cash and cash equivalents cover only a small fraction of current liabilities. The downward trend after 2021 suggests reduced cash reserves relative to liabilities, highlighting potential reliance on other current assets or funding sources for liquidity needs.

Overall, the data indicate an initial strengthening of liquidity reaching mid-2021, followed by a moderation and stabilization at lower levels. The consistent gap between the current ratio and the quick and cash ratios reflects the material role of inventory in the liquidity profile. The relatively low cash ratio throughout the periods suggests limited cash availability, which may warrant attention in liquidity management strategies to ensure resilience against short-term financial pressures.

Current Assets

Over the observed period, current assets have generally exhibited fluctuations with some upward and downward movements. Initially, current assets rose significantly from approximately 63,328 million to over 90,067 million US dollars in early 2021. Following this peak, there was a decline and then stabilization around the 76,000 to 88,000 million range through 2023, with a slight increase toward the end of the period reaching approximately 92,920 million by the last recorded quarter. This pattern suggests variability in liquid resources or short-term assets, with occasional growth spurts and periods of modest decreases.

Current Liabilities

Current liabilities started at roughly 82,647 million US dollars and showed an overall increasing trend with some volatility. Initial values hovered near the mid-80,000 million range, with a notable rise peaking around 101,408 million in late 2022. Following this peak, liabilities fluctuated upwards again, ultimately reaching around 115,732 million by the last recorded quarter. This rising trend in current liabilities indicates increasing short-term obligations over time.

Current Ratio

The current ratio has consistently remained below 1 throughout the period, indicating that current liabilities exceed current assets most of the time. There was an improvement from about 0.77 to nearly 0.97 in early 2021, coinciding with the increase in current assets and a relatively stable level of liabilities. However, after this peak, the ratio generally declined or stabilized in the mid-0.8 range, reflecting tighter liquidity conditions. Recent quarters show a modest downward trend, with values around 0.79 to 0.80 toward the end, suggesting a continuing slight imbalance where liabilities surpass assets.

Summary

The data indicate that the company experienced an improvement in liquidity in the first half of the observed period, driven by a rise in current assets and a relatively stable level of current liabilities. Since early 2021, current assets have fluctuated without a clear upward trajectory, while current liabilities have generally trended higher. As a result, the current ratio, an indicator of short-term financial health, has declined from its peak to more constrained levels just below 1, pointing to increased pressure on liquid resources relative to short-term obligations. Maintaining or improving liquidity could require managing the growth of liabilities or strengthening current assets to ensure better coverage of obligations.

Quick Assets

The total quick assets exhibit fluctuations over the periods analyzed. Initially, from April 2020 to July 2021, there is a noticeable increasing trend, peaking around July 2021 at approximately 28,934 million US dollars. Subsequently, a declining pattern emerges, with values dropping to a low near 16,558 million US dollars by January 2023. After this trough, a recovery phase is observed, with quick assets gradually rising again, reaching above 22,000 million US dollars by October 2025. Overall, the asset values demonstrate cyclical behavior with significant volatility.

Current Liabilities

Current liabilities show an overall increasing trend throughout the timeframe. Starting at 82,647 million US dollars in April 2020, liabilities rise moderately with some fluctuations to about 115,732 million US dollars in October 2025. Periodic dips are visible, for example around April 2021, but the general movement is upward. This indicates an increasing obligation level over time, with occasional short-term reductions.

Quick Ratio

The quick ratio remains consistently low across the entire period, fluctuating mostly between 0.18 and 0.36. The highest ratio occurs around April to July 2021, reaching approximately 0.35 to 0.36, indicating a relatively stronger liquidity position during this interval. However, after this peak, the quick ratio declines steadily, stabilizing in the range of 0.18 to 0.22. This persistent low ratio suggests limited coverage of current liabilities by liquid assets, implying a constrained short-term liquidity situation throughout the analyzed intervals.

Overall Insights

The data illustrate a scenario where quick assets and current liabilities both experience notable changes over time, with liabilities showing a generally increasing trend outpacing the fluctuations of quick assets. The low quick ratio throughout the periods suggests potential liquidity management challenges, as quick assets cover only a small fraction of current liabilities consistently. The temporary improvements around mid-2021 indicate a brief enhancement in liquidity, but this was not sustained. The cyclical nature of quick assets, combined with rising liabilities, may warrant further attention to liquidity risk and working capital efficiency in future financial planning.

The analysis of the quarterly financial data reveals several key trends related to liquidity and short-term financial stability over the observed periods.

Total Cash Assets

The total cash assets demonstrate noticeable fluctuations throughout the timeline. Initially, there is a moderate increase from approximately $14,930 million to a peak around $22,846 million by mid-2021. Subsequently, cash reserves generally decline, with several periods showing significant drops, reaching a low near $8,625 million by early 2023. Although some intermittent recoveries occur thereafter, the overall trend appears downward toward the later periods, with cash assets stabilizing around a range of $9,000 to $10,500 million.

Current Liabilities

Current liabilities display a generally increasing trajectory over the periods. Starting from around $82,647 million, liabilities show some variability but tend to rise, surpassing $100,000 million in multiple quarters from late 2022 onwards. The highest observed value approaches $115,732 million near the end of the dataset. This upward trend indicates growing short-term obligations that the company needs to manage.

Cash Ratio

The cash ratio, which measures the company’s ability to cover current liabilities with cash and cash equivalents, reflects decreasing liquidity over time. Initially, the ratio fluctuates between 0.16 and 0.28 in the earlier part of the dataset, suggesting a relatively stronger cash position. However, a noticeable decline follows, with the ratio dropping below 0.12 after mid-2022 and stabilizing around 0.09 in the most recent periods. This downward shift signals a reduced cushion of cash relative to short-term liabilities, implying tighter liquidity management or higher reliance on other forms of current assets or financing.

In summary, the data denote a pattern where total cash assets experience initial growth followed by decline and stabilization at lower levels, while current liabilities progressively increase. Correspondingly, the cash ratio decreases over time, indicating reduced immediate liquidity. These trends warrant attention to the company’s short-term liquidity strategies and highlight the importance of monitoring cash flow and working capital to ensure ongoing financial resilience.