Walmart Financial Report and Financial Analysis: 2016 to 2020

Walmart Inc. Financial Report and Financial Analysis started with an in-depth review of Walmart's 10k Annual report, specifically, Walmart's income statement and balance sheet. 

Next Paul Borosky, MBA., summarized their financial information and input it into a proprietary financial model, which shows their income statement and balance sheet trends as well as calculations for Walmart's financial ratios, and financial ratio trends covering 5 years.

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Walmart Financial Anaysis by Paul Borosky, MBA.
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Each Public Company Financial Report will include:

  • Summarized income statement for the last 5 years.
  • Summarized balance sheet for the last 5 years.
  • Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
  • Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is were the researcher uses plain English to explain finance concepts.

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Walmart Summary

Walmart stock price started April of 2019 at $98.80.  It ended April of 2020 with a stock price of $118.22.  This is a growth rate annually of  19.66%.  From an investor’s perspective, this growth rate well exceeds most other competitors in its industry.

Walmart has been consistently paying dividends over the last five years.  Further, their dividend payments have been growing continuously as well.  However, the actual growth rate for dividends has been declining.  In 2017, the growth rate for dividends was 2%.  However, in 2019, this growth rate slowed to 1.92%.  Investors should expect this growth rate declined to continue for your seeable future. 

Walmart Inc. Income Statement Summary

Cost of Goods Sold

Walmart’s cost of goods sold in the last five years has ranged between 73.7% and 75.3%.  This narrow range shows that Walmart has optimized a business model that allows the firm to keep its prices low.  When price increases do happen, it seems like the company has no problem with passing on the price elevation to loyal consumers.

Research and Development

In the last five years, Walmart has not spent any money on research and development.  Just because a company is in retail does not mean they cannot innovate.  Just look at Amazon’s Whole Foods.  A huge failing on the part of the executives.

Walmart Summary Income Statement 2020

Column1 2020 2019 2018 2017 2016
Revenues                  523,964                  514,405                  506,343                  485,873                    482,130
COGS                  394,605                  385,301                  373,396                  361,256                    360,984
Gross Profit                  129,359                  129,104                  132,947                  124,617                    121,146
SG&A                  108,791                  107,147                  106,510                  101,853                      97,041
Depreciation
R & D
Other
Operating Expenses
EBIT                    20,568                    21,957                    26,437                    22,764                      24,105
Other Income                            -                            -                            -                            -                             -
Interest Expense                      2,410                      2,129                      2,178                      2,267                        2,467
EBT                    20,116                    11,460                    15,123                    20,497                      21,638
Taxes                      4,915                      4,281                      4,600                      6,204                        6,558
Net Income                   15,201                     6,670                     9,862                   13,643                    15,080

Walmart Balance Sheet Summary

Accounts Payable

Walmart’s Accounts Payable ended 2016 at $38 billion.  There Accounts Payable climbed to $46.9 billion in 2020.  This indicates that the company may be paying their suppliers slower over time.  This process does help the organization by increasing their working capital.  However, by holding back on paying suppliers, it may impact their supply chain loyalty.  This may lead to vendor turnover, which results in additional labor costs because of the need to seek out replacements.  A better strategy would be to set a parameter for when its vendor should expected to receive funds.  And then stick to it.

Long Term Debt

Walmart ended 2016 with long-term debt at approximately $44 billion.  Their long-term debt would then climb to $50 billion in 2019.  In 2020 though, their long-term debt fell to $43.7 billion.  Because interest rates are at historic lows, the organization should probably be taking on more debt for the next couple years.  Not only will this insure the firm has enough liquid assets to whether recessions but it may help with funding possible acquisitions in the marketplace.

Walmart Summary Balance Sheet 2020

Column1 2020 2019 2018 2017 2016
Cash                        9,465                    7,722                    6,756                    6,867                    8,705
Short Term Investment                         -                         -                         -                         -
Account Receivable                        6,284                    6,283                    5,614                    5,835                    5,624
Inventory                      44,435                  44,269                  43,783                  43,046                  44,469
Other                         -                         -                         -                         -
Current Assets                    61,806                61,897                59,664                57,689                60,239
Net PPE                    105,208                104,317                107,675                107,710                110,171
Goodwill                      31,073                  31,181                  18,242                  17,037                  16,695
Other                              -                         -                         -                         -                         -
Total Assets                  236,495              219,295              204,522              198,825              199,581
Accounts Payable                      46,973                  47,060                  46,092                  41,433                  38,487
Accrued Expense                      22,296                  22,159                  22,122                  20,654                  19,607
Accrued Taxes                           280                       428                       645                       921                       521
Notes Payable                        5,362                    5,225                    5,257                    1,099                    2,708
LT Debt - Current                           511                       729                       667                    2,256                    2,745
Other                              -                         -                         -                         -                         -
Total Current Liabilities                      77,790                  77,477                  78,521                  66,928                  64,619
LT Debt                      43,714                  50,203                  36,825                  42,018                  44,030
Other                              -                         -                         -                         -                         -
Total Liabilities                  154,943                50,203                36,825                42,018                44,030
Common Stock                        3,531                    3,253                    2,943                    2,676                    2,122
Treasury                              -                         -                         -                         -                         -
Retained Earnings                      83,943                  80,785                  85,107                  89,354                  90,021
Other                         -                         -                         -                         -
Total Equity                    81,552                79,634                80,822                80,535                83,611
Total Equity & Liability                  236,495              219,295              204,522              198,825              199,581

Walmart Financial Ratio Summary and Analysis

Cash Ratio

Walmart’s cash ratio ended 2016 at .13.  In the next five years, this ratio would range between .09 and .12.  This shows that Walmart has a specific strategy that they’re utilizing for cash holdings.  Such a small cash holding, as compared to revenues and costs, runs the risk of short-term liquidity problems.  However, because the firm does receive a substantial amount of cash on a daily basis from sales, this may be a worthwhile calculated bet.

Days Sales Outstanding

The company’s days sales outstanding has ranged between 4.05 and 4.38.  From an investor’s perspective, since this is the retail industry, days sales outstanding is of very little concern.

Net Profit Margin

Walmart’s net profit margin ended 2016 at 3.13%.  This ratio fell to 1.3% in 2019, only to rebound to 2.9% in 2020.  Slim profit margins over an extended period of time show that the firm embraces and continuously practices low-cost leadership pricing strategies.  In order to maintain this type of strategy though, the organization needs to ensure prompt payment to its suppliers.  If the organization continually turns over suppliers, then operational costs will inevitably increase.  As shown in the profit margin, the company has very little room for error.

Walmart 2020 Liquidity Ratios

Ratios 2020 2019 2018 2017 2016
Current Ratio                           0.79                    0.80
Cash Ratio                           0.12                    0.10
Quick Ratio                           0.22                    0.23
Net Working Capital                       (9,365)              (11,373)

Walmart 2020 Asset Utilization

Ratios 2020 2019 2018 2017 2016
Total Asset Turnover                           2.22                    2.35
Fixed Asset Turnover                           4.98                    4.93
Days Sales Outstanding                           4.38                    4.46
Inventory Turnover                         11.79                  11.62
Accounts Receivable Turnover                         83.38                  81.87
Working Capital Turnover                       (55.95)                (45.23)
AP Turnover                         11.15                  10.93
Average Days Inventory                           0.03                    0.03
Average Days Payable                           0.03                    0.03

Walmart 2020 Profitability Ratios

Ratios 2020 2019 2018 2017 2016
Return on Assets 6.43% 3.04%
Return on Equity 18.64% 8.38%
Net Profit Margin 2.90% 1.30%
Gross Profit Margin 24.69% 25.10%
Operating Profit Margin 3.93% 4.27%
Basic Earning Power 8.70% 10.01%
ROCE 12.96% 15.48%
Capital Employed                     158,705              141,818
ROIC 16.22% 14.80%

Walmart 2020 Long-term Debt

Ratios 2020 2019 2018 2017 2016
Debt Ratio 18.48% 22.89%
Debt/Equity 53.60% 63.04%
Times Interest Earned                           8.53                  10.31