Walmart Inc. (NYSE:WMT)

The analysis of the financial ratios over the reported periods reveals multiple trends in operational efficiency and liquidity management.

Inventory Turnover

The inventory turnover ratio exhibits some fluctuations but generally remains within a moderate range around 7 to 9. Initial values near 9.79 in early 2020 dip to around the 7-range in 2022, with some recovery observed towards late 2023 and early 2024 peaking near 9 before stabilizing in the 8-range in subsequent quarters. This suggests a relatively stable ability to manage inventory despite minor variations over time.

Receivables Turnover

This ratio shows a declining trend over the observed periods, starting above 100 in early 2020 and progressively falling towards the high 50s by late 2025. This decline indicates that the company is collecting its receivables more slowly over time, implying a lengthening collection period or possibly relaxed credit terms.

Payables Turnover

Payables turnover ratio remains comparatively stable, fluctuating mostly between 7.5 and 9 throughout the periods. There are minor dips and recoveries, but no significant downward or upward trend. This stability suggests consistent payment practices to suppliers.

Average Inventory Processing Period

The number of days to process inventory shows an upward trend from an average of around 37 days in early 2020 to peaks above 50 days in 2022, followed by a reduction back to the low 40s towards 2024 and 2025. The initial increase implies that inventory remains longer on hand, potentially affecting liquidity, while the later decrease reflects improved inventory management efficiency.

Average Receivable Collection Period

The days to collect receivables increase slightly from 3 days to 6 days over the period, consistent with the decline in receivables turnover ratio. This gradual lengthening further confirms slower collections and extended credit durations.

Operating Cycle

The operating cycle, combining inventory processing and receivable collection periods, rises from around 40 days in early 2020 to a peak of 57 days in 2022, then declines somewhat to around 45-51 days by late 2025. This progression indicates a longer time to convert inventory into cash initially, with some subsequent improvement in working capital efficiency.

Average Payables Payment Period

Consistently near the low-to-mid 40s in days across the periods, with slight fluctuations, indicating stable payment terms and timing to suppliers. The payment period remains relatively aligned with the operating cycle, an aspect beneficial to cash flow management.

Cash Conversion Cycle

The cash conversion cycle, reflecting the net time between cash outflows and inflows, moves from slightly negative or very low positive values in 2020 to a peak of around 12 days in 2022, before stabilizing to around 4 to 7 days afterwards. This suggests that the company experienced longer delays in converting investments in inventory and receivables back into cash during the middle periods but managed to reduce this inefficiency subsequently.

Overall, the data indicate initial challenges with extended periods to process inventory and collect receivables, impacting the operating and cash conversion cycles. However, there is evidence of gradual improvement in these areas in the later periods analyzed, reflecting efforts to enhance working capital management and operational efficiency. Payables management remains relatively steady throughout, supporting balanced cash flow dynamics.

Cost of Sales

The cost of sales shows a seasonal pattern with notable increases during the first quarter of each fiscal year, aligned with January-ending periods. The values generally fluctuate between approximately 100 billion and 136 billion US dollars. Starting at around 102 billion in April 2020, the cost sees incremental rises reaching peaks such as 115 billion in January 2021 and 131.8 billion in January 2024, signifying increased activity or demand during these periods. A gradual upward trend is evident over the five-year span, indicating growth in company scale or inflationary pressures affecting cost inputs.

Inventories

Inventory levels also exhibit a seasonal pattern, often peaking in the October quarter of each year. From around 41 billion US dollars in April 2020, inventories increased markedly to peaks such as approximately 64 billion in October 2023 and 65 billion forecasted for October 2025. The data show that inventory levels generally rise year-over-year, consistent with an expanding business footprint or increased stocking strategies potentially to meet higher demand or mitigate supply chain risks. However, there are periods of decline, such as the drop from October 2023 to January 2024, indicating adjustments in inventory management.

Inventory Turnover Ratio

The inventory turnover ratio displays considerable variation, reflecting changes in how efficiently inventory is converted into sales. The ratio starts at 9.79 in April 2020, dips to a low of approximately 7.0 in quarters like October 2020 and October 2022, then recovers periodically to values above 9.0 in certain quarters, such as July 2024 and July 2025. The turnover ratio's fluctuations indicate variability in inventory management effectiveness and sales velocity, with some periods characterized by slower turnover possibly due to increased inventory holding or weaker sales, while others suggest stronger sales relative to inventory levels. Overall, despite seasonal dips, there is a tendency toward maintaining turnover ratios near or above 8.0, implying relatively consistent inventory efficiency over time.

Overall Insights

The financial data reveal cyclical trends in cost of sales and inventories, which align with typical retail business seasonality, peaking ahead of major sales periods likely tied to holidays and year-end activities. The gradual upward trend in both cost of sales and inventory levels suggests business growth or inflationary influences. Inventory turnover ratios fluctuate but generally maintain a moderate level, indicating ongoing efforts to balance inventory with sales demands. Periodic declines in turnover ratios correspond with inventory build-ups, which may imply strategic stockpiling or temporary sales slowdowns. The patterns reflect a dynamic environment where managing inventory and costs relative to sales is crucial, with some variability likely driven by external economic or market factors.

The financial data reveals several noteworthy trends related to the company's sales performance and receivables management over the examined periods.

Net Sales

Net sales demonstrate a generally upward trajectory with some fluctuations. Starting at approximately $133.7 billion in April 2020, sales increased steadily, reaching peaks in January 2024 at about $171.9 billion and January 2025 at around $178.8 billion. Periods of slower growth or slight declines are observable, such as from January 2021 to April 2021 and October 2023 to January 2024, but the overall trend reflects sustained growth in sales revenue over the long term.

Receivables, Net

The net receivables figure has increased significantly across the periods analyzed. From approximately $5.0 billion in April 2020, the value rose consistently, reaching $12.1 billion by October 2025. This increase indicates a buildup of outstanding receivables in proportion to sales, suggesting that more sales are being made on credit or that collection periods may be lengthening.

Receivables Turnover Ratio

Receivables turnover, a key efficiency metric showing how quickly the company collects its receivables, shows a declining trend over time. The ratio declines from a high of 105.52 in April 2020 to 57.48 by October 2025. This decline indicates a slower conversion of receivables to cash, implying longer collection cycles or potential weakening of credit management efficiency. This trend could be a concern if it reflects increasing credit risk or less aggressive collection efforts.

In summary, while net sales exhibit robust growth over the periods, the concurrent rise in net receivables and the declining turnover ratio highlight potential challenges in working capital management. The organization may need to review credit policies and collection processes to ensure that higher sales volumes do not lead to increased credit risk or liquidity constraints.

Cost of Sales

The cost of sales shows a noticeable cyclical pattern with fluctuations across quarters. Starting from approximately 102 billion USD in April 2020, it experiences periodic rises and falls. There is a clear upward trajectory in the most recent periods, reaching values above 131 billion USD in January 2024 before a slight decline and then another increase. Overall, the trend indicates growth in the cost base over the years, with peaks generally aligning with the year-end and early-year quarters, suggesting seasonality in sales activity.

Accounts Payable

The accounts payable figures also demonstrate cyclical movements that mirror, to some extent, the cost of sales pattern but with less volatility. Values oscillate between roughly 44 billion USD and 67 billion USD during the periods analyzed. Notably, there is an increasing trend in accounts payable towards the later dates, indicating possibly extended credit terms or increased purchasing activity. Peaks tend to occur near the end of fiscal years and mid-year, reflecting possible supplier payment cycles or strategic payment scheduling.

Payables Turnover Ratio

The payables turnover ratio exhibits variability but generally fluctuates between approximately 7.5 and 9.2. The ratio tends to decrease when accounts payable figures increase and vice versa, consistent with the inverse relationship between turnover ratios and payable balances. The turnover ratio does not show a sustained directional trend but reflects operational management of payables in response to purchasing patterns and possibly changes in supplier terms. Periods of lower turnover ratios may indicate longer payment periods or higher inventory acquisition relative to payments made.

Overall Insights

The data reflects a business experiencing growth in cost of sales over the analyzed periods, with corresponding impacts on accounts payable balances. The cyclical nature of the data points to seasonal influences affecting sales and procurement activities. Management appears to maintain a relatively consistent payable turnover rate, balancing operational scale with supplier payment dynamics. The increasing absolute figures in cost of sales and accounts payable suggest expansion or inflationary effects, with careful attention needed to maintain payable efficiency as the business grows.

The financial data demonstrates several notable trends in the key metrics over the review periods. The working capital values exhibit significant fluctuation, with predominantly negative figures throughout. Initially, the working capital shows a decreasing negative trend from April 2020 through October 2020, improving from -19,319 million USD to -14,519 million USD. This is followed by a sharp improvement in January 2021, where the negative working capital is substantially reduced to -2,578 million USD. However, from April 2021 onwards, the working capital reverts to increasing negative values again, reaching a peak negative figure near -22,812 million USD by October 2025. The negative working capital suggests ongoing challenges in managing current assets relative to current liabilities but fluctuates in severity across quarters.

In contrast, net sales display a generally upward trend over the same periods, suggesting sustained growth in revenue generation. Starting at approximately 133,672 million USD in April 2020, net sales demonstrate incremental increases with some fluctuations, surpassing the 170,000 million USD mark in the periods around 2024 and 2025. This trend indicates that despite the volatile working capital situation, sales expanded consistently, which may reflect market strength, increased demand, or improved sales operations.

It is also important to note the absence of data for the working capital turnover ratio throughout all periods. This missing metric limits the ability to analyze how efficiently the company is utilizing its working capital to generate sales over time. Inclusion of this ratio would provide valuable insight into operational efficiency and liquidity management.

In summary, while net sales have displayed a positive growth trajectory, working capital has remained negative and experienced fluctuations, signifying potential liquidity pressures or operational challenges in balancing short-term assets and liabilities. Monitoring and managing working capital more effectively could be instrumental in ensuring operational stability alongside sales growth.

Inventory Turnover

The inventory turnover ratio exhibits notable fluctuations over the observed periods. Initially, it starts at a relatively high level close to 9.8 in April 2020 and peaks near 9.94 in July 2020. This is followed by a decline trend reaching a low around 7.01 in October 2022. Subsequently, the turnover recovers steadily, reaching values above 9 by mid to late 2024 before slightly declining again near 8 in the most recent quarters.

This pattern suggests periods of stronger inventory movement early and later in the timeline, with a mid-term slowdown. The temporary reductions in turnover may indicate increased inventory levels relative to sales or slower sales velocity during certain quarters.

Average Inventory Processing Period

The average inventory processing period, measured in days, generally shows an inverse relationship to the inventory turnover. It starts at 37 days in April 2020, gradually increases to reach a higher range near 52 days by late 2022, then declines again in recent quarters towards the low 40s.

Longer processing periods align with the reduced turnover ratios noted in the middle of the timeline, indicating that inventory remains on hand for extended periods during those quarters. The most recent data showing a reduced processing period signals an improvement in inventory efficiency or faster stock movement.

Overall Insights

The data illustrates cyclical inventory management dynamics, with periods of efficient turnover and shorter inventory holding alternating with phases of slower turnover and longer processing times. The mid-term period around 2021 to 2023 reflects a relative build-up of inventory or decreased sales velocity, which could be attributed to external market factors or operational adjustments.

In the latest quarters, improvement in inventory turnover and reduction in processing period suggest enhanced operational efficiency or stronger sales performance. Monitoring these trends will be important for assessing inventory management effectiveness and its impact on working capital and profitability.

The financial data reveals notable trends in the management of receivables over the observed periods. The receivables turnover ratio demonstrates a general decline, moving from a high of approximately 105 times at the start to lower values approaching 57 times towards the end of the timeframe. This suggests a gradual decrease in the frequency with which receivables are collected during the periods analyzed.

Correspondingly, the average receivable collection period exhibits a slight increase. Starting at 3 days, it progresses to a steady 5 days for most of the later periods and ultimately reaches 6 days in the final recorded intervals. This increase implies that it is taking a moderately longer time for the company to collect its receivables as time advances.

Receivables Turnover Ratio

Initially high at over 105 times, it decreases almost continuously, indicating a slowing pace in receivables collection frequency, which may suggest looser credit terms or slower customer payments.

Average Receivable Collection Period

The move from 3 to 6 days indicates a lengthening of the time required to collect receivables. This trend complements the decline in turnover and signals possible changes in credit management or customer payment behavior.

Overall Trend Analysis

The combined movement of these two metrics points toward a gradual deterioration in receivables efficiency. The company may be experiencing longer collection cycles, which could affect cash flow dynamics and working capital management strategies.

The analysis of the financial periods reveals several key trends in operational efficiency as measured by inventory processing, receivable collection, and the overall operating cycle.

Average Inventory Processing Period

The average inventory processing period shows noticeable fluctuations across the examined quarters. Initially, it hovered around the high 30s in days, then escalated significantly to the high 40s and early 50s during late 2020 through 2022. There is a pattern of peak values in the quarters around October and April of most years, followed by a slight reduction in subsequent quarters. More recent periods indicate a moderate decrease toward the early 40s, with intermittent rises up to 48 or 49 days. This suggests some variability in inventory turnover efficiency, with occasional slowdowns possibly linked to seasonal factors or supply chain challenges.

Average Receivable Collection Period

This metric remains relatively stable, consistently ranging between 3 to 6 days throughout the timeframe. The collection period settles mostly around 5 days, with minor upward trends evident in the later quarters, reaching 6 days by 2025. The limited variation indicates a steady credit collection process and effective receivables management over the years.

Operating Cycle

The operating cycle, combining inventory turnover and receivable collection, mirrors the inventory trend closely, showing an overall increase from around 40 days in early 2020 to peaks in the mid-50s around 2021 and 2022. Similar to inventory processing, the operating cycle exhibits fluctuations aligned with seasonal patterns, decreasing moderately in some quarters but generally trending slightly upward. The latter data points indicate a cycle length stabilizing near the high 40s to low 50s again.

In summary, the operational efficiency measured by these periods displays seasonal and cyclical variation, with inventory management as the main driver of changes in the operating cycle. Receivable collection remains consistent, underpinning operational stability in that area. The variations in inventory processing could suggest external factors impacting supply and demand or internal adjustments in inventory policies.

Payables Turnover Ratio

The payables turnover ratio has shown fluctuating behavior over the observed periods. It started at a relatively high level near 9.15 in April 2020, followed by a decreasing trend reaching its lowest points around 7.5 to 7.76 between October 2021 and January 2022.

Subsequently, there was a recovery phase where the ratio increased again, peaking near 8.92 in July 2025 before experiencing a decline towards the end of the period, dropping to approximately 7.86 in October 2025.

This variation indicates oscillations in the company's efficiency in paying its suppliers. The initial decline suggests a lengthening in payment cycles or lower turnover of payables, while later rebounds reflect improvements before slight weakening towards the latest period.

Average Payables Payment Period (in days)

The average payables payment period shows an inverse trend to the payables turnover ratio, as expected. Initially, it was about 40 days in April 2020 and increased to a peak close to 49 days in October 2021.

Afterwards, the payment period shortened again, falling to around 41-42 days in 2023 and mid-2024, indicating quicker payments to suppliers. However, there is a minor uptick at certain points, such as 46 days in October 2023 and again in October 2025, suggesting periodic lengthening of payment terms or delays.

Overall Trends and Insights

The inverse relationship between the payables turnover ratio and the average payables payment period aligns with typical accounts payable behavior. Fluctuations in these metrics suggest ongoing adjustments in the company’s working capital management strategies.

Periods with lower turnover and higher payment days may reflect strategic decisions to optimize cash flow by extending payables, while periods with higher turnover and shorter payment days may indicate efforts to enhance supplier relationships or take advantage of early payment discounts.

No consistent linear trend dominates, indicating responsive and potentially cyclical management of payables consistent with external economic factors or operational needs.

The analysis of the quarterly liquidity and operational efficiency metrics reveals distinct trends over the observed periods. The data focuses on four key indicators: average inventory processing period, average receivable collection period, average payables payment period, and the resulting cash conversion cycle.

Average Inventory Processing Period

This metric displays noticeable fluctuations with a general tendency toward lengthening over time. Starting from approximately 37 days, the period increased to peaks near 52 days in multiple quarters, reflecting slower inventory turnover at times. However, some improvements occur intermittently where the period shortens to the low 40s, indicating variability in inventory management efficiency.

Average Receivable Collection Period

The receivables period remains relatively stable throughout, consistently around 4 to 6 days. This stability suggests a well-maintained and efficient credit and collection process, ensuring receivables are converted into cash promptly without significant delays or changes over the periods observed.

Average Payables Payment Period

The payables period shows moderate variation but generally remains within the range of approximately 40 to 49 days. There are minor oscillations indicating adjustments in payment practices, but no extreme shifts. This steadiness implies a controlled approach to managing payables, balancing good supplier terms with cash outflow considerations.

Cash Conversion Cycle

The cash conversion cycle exhibits variability but tends to hover in a positive range, mostly between 3 and 12 days. Notably, there are short intervals of slight contractions down to near zero or negative values, hinting at periods where the company might have optimized working capital significantly. Overall, the positive cycle length suggests that the company takes several days to convert its investments in inventory and receivables back into cash after accounting for payables, reflecting a generally balanced working capital cycle with room for occasional efficiency gains.

In summary, the company demonstrates consistent efficiency in managing receivables and payables with some fluctuations in inventory turnover. The cash conversion cycle remains positive but relatively short, indicating effective working capital management. The inventory processing period is a key area with higher variability, representing potential focus for improving operational efficiency and reducing cash tied up in stock.