Walmart Inc. (NYSE:WMT)

The financial ratios indicate the liquidity position of the company over a six-year period, from January 31, 2020, to January 31, 2025.

Current Ratio

The current ratio experienced a gradual increase from 0.79 in 2020 to a peak of 0.97 in 2021, indicating a temporary improvement in the company's ability to cover short-term liabilities with current assets. However, following 2021, the ratio declined to 0.82 by 2023 and remained relatively stable around that level through 2024 and 2025. This suggests a stabilization at a comparatively low liquidity position, with current assets consistently less than current liabilities.

Quick Ratio

The quick ratio rose from 0.20 in 2020 to 0.26 in both 2021 and 2022, signaling an enhanced ability to meet short-term obligations using liquid assets excluding inventory. Subsequently, the ratio decreased notably to 0.18 in 2023 before rebounding slightly to 0.20 in the two following years. This fluctuation indicates some variability in the company's immediate liquidity, but overall the quick ratio remains low, signifying limited liquid assets relative to current liabilities.

Cash Ratio

The cash ratio showed an initial increase from 0.12 in 2020 to 0.19 in 2021, suggesting improved availability of cash and cash equivalents to pay off current debts. After 2021, the ratio declined steadily, reaching a low of 0.09 in 2023 and maintaining that level through 2025. This decline points to decreasing cash reserves relative to current liabilities, indicating a more conservative cash position or potentially higher current liabilities.

Overall, the liquidity ratios reflect a peak in short-term financial strength around 2021, followed by a decline and stabilization at lower levels. The company appears to maintain a conservative liquidity stance, with all ratios consistently below 1.0, implying reliance on factors beyond liquid assets to meet short-term obligations. This pattern warrants monitoring to ensure adequate liquidity to support operational needs and financial obligations.

Current assets

Current assets exhibited a notable increase from 61,806 million USD in January 2020 to a peak of 90,067 million USD in January 2021. Subsequently, there was a decline to 81,070 million USD in January 2022, followed by a further decrease to 75,655 million USD in January 2023. The figures stabilized somewhat thereafter, with slight increases observed in January 2024 and January 2025, reaching 76,877 million USD and 79,458 million USD respectively.

Current liabilities

Current liabilities showed a consistent upward trend from 77,790 million USD in January 2020 to 96,584 million USD in January 2025. There were fluctuations within this period, with increases from 77,790 million USD to 92,645 million USD in January 2021, a brief decrease to 87,379 million USD in January 2022, followed by progressive increases in the subsequent years to 92,198 million USD in January 2023, 92,415 million USD in January 2024, and finally reaching the highest point in January 2025.

Current ratio

The current ratio, an indicator of short-term liquidity, increased from 0.79 in January 2020 to a near equilibrium level of 0.97 in January 2021. This was followed by a gradual decline, indicating a reduction in liquidity, reaching 0.93 in January 2022 and further falling to 0.82 by January 2023. The ratio remained relatively stable at approximately 0.82 to 0.83 through January 2024 and January 2025, suggesting a consistent but lower margin of current assets against current liabilities in the most recent periods.

Quick Assets Trend

The total quick assets showed a notable increase from 15,749 million USD in 2020 to a peak of 24,257 million USD in 2021. Following this peak, the value slightly decreased to 23,040 million USD in 2022 and then experienced a more pronounced decline to 16,558 million USD in 2023. In the subsequent years, 2024 and 2025, the quick assets rose modestly to 18,663 million USD and 19,012 million USD, respectively. This pattern suggests some volatility in liquid asset holdings over the period, with significant fluctuations particularly after 2021.

Current Liabilities Trend

Current liabilities consistently increased throughout the timeframe, starting at 77,790 million USD in 2020 and reaching 96,584 million USD by 2025. There was a steady upward trajectory with minor fluctuations, reflecting a growing short-term obligation burden. The continuous rise in current liabilities indicates heightened financial commitments within the operating cycle.

Quick Ratio Analysis

The quick ratio, representing liquidity, was relatively low throughout the period, starting at 0.2 in 2020 and increasing to 0.26 in both 2021 and 2022. However, it sharply declined to 0.18 in 2023 before returning to 0.2 in 2024 and remaining stable at this level through 2025. Despite some recovery after 2023, the ratio indicates limited immediate liquidity relative to current liabilities, signaling potential challenges in covering short-term obligations without relying on inventory sales.

Overall Insights

While quick assets experienced fluctuations, current liabilities exhibited a persistent upward trend, and the quick ratio stayed below 0.3 throughout. This combination points to a cautious liquidity position with a relatively low buffer to cover current liabilities using the most liquid assets. The decrease in quick assets and quick ratio in 2023 is particularly notable and may warrant further investigation into operational or financial strategy adjustments during that period. The partial recovery in quick assets and the quick ratio after 2023 suggests some management response to improve liquidity but maintaining close monitoring is advisable.

Total Cash Assets

The total cash assets show an increase from 9,465 million USD in 2020 to a peak of 17,741 million USD in 2021, followed by a declining trend through 2023, reaching 8,625 million USD. There is a slight recovery in 2024 at 9,867 million USD, but the value decreases again to 9,037 million USD in 2025. Overall, cash assets exhibit considerable volatility, with the highest point in 2021 and a marked reduction by 2023, stabilizing at a lower level thereafter.

Current Liabilities

Current liabilities increased steadily from 77,790 million USD in 2020 to 92,645 million USD in 2021. A slight dip occurred in 2022 to 87,379 million USD, but liabilities resumed an upward trend thereafter, reaching 96,584 million USD by 2025. This indicates growing short-term obligations over the analysis period, with a brief interim reduction in 2022.

Cash Ratio

The cash ratio, measuring liquidity by comparing cash assets to current liabilities, reached its highest point at 0.19 in 2021, coinciding with peak cash assets. However, it declined sharply to 0.09 in 2023 and has remained relatively low since, with minor fluctuations between 0.09 and 0.11 through 2025. This decline signifies a weakening liquidity position despite increased current liabilities, suggesting tightening cash coverage against short-term obligations.

Summary of Trends

The financial data indicates a period of peak liquidity in 2021 with maximum cash reserves and the highest cash ratio, followed by a sustained decline in liquidity metrics. Current liabilities have generally trended upward, increasing the company’s short-term financial obligations. The combination of declining cash assets and rising current liabilities has placed pressure on liquidity, as evidenced by the cash ratio dropping to its lowest levels in the latter years. This trend may highlight potential challenges in maintaining sufficient cash relative to short-term liabilities, warranting close monitoring and potential strategic adjustments to improve liquidity management.