Breaking Down Walmart Inc. (WMT) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on the financial health of major players like Walmart (WMT)? With a significant presence in the retail sector, understanding Walmart's financial metrics is crucial for making informed decisions. Did you know that Walmart has total assets of $260.8 billion and total liabilities of $163.1 billion? How does their debt-to-equity ratio of 42% stack up against industry standards, and what does their interest coverage ratio of 13x really tell us about their ability to manage debt? Dive in to explore these key insights and more, helping you assess whether Walmart aligns with your investment strategy.

Walmart Inc. (WMT) Revenue Analysis

Walmart Inc. (WMT) generates revenue from a variety of sources, with the majority coming from its retail operations in the United States. These operations include:

• Walmart U.S.: This segment includes the company's traditional brick-and-mortar stores, as well as its e-commerce operations in the United States.
• Walmart International: This segment includes the company's retail operations outside of the United States.
• Sam's Club: This segment includes the company's membership-only warehouse clubs in the United States.

In fiscal year 2024, Walmart's total revenue was $648.1 billion. Here's a breakdown of the revenue by segment:

• Walmart U.S. generated $441.6 billion
• Walmart International generated $114.6 billion
• Sam's Club generated $86.2 billion

Walmart has consistently demonstrated revenue growth over the years. The company's consolidated revenue increased by 6.0% in fiscal year 2024. When excluding currency fluctuations, the revenue growth would be 7.6%. Here’s a more detailed look at the year-over-year growth rates for each segment:

• Walmart U.S. saw a net sales increase of 5.2%.
• Walmart International experienced a net sales increase of 12.0%, which adjusts to 14.6% when excluding currency impacts.
• Sam’s Club achieved a net sales increase of 4.2%.

Changes in consumer behavior, such as the shift to online shopping, have influenced Walmart's revenue streams. The company has invested heavily in its e-commerce platform to capitalize on this trend. These investments include expanding its online product selection, improving its website and mobile app, and offering faster and more convenient shipping options. The growth in advertising sales is also a notable change, contributing to the company's overall revenue.

For further insights into Walmart's investor profile, consider reading Exploring Walmart Inc. (WMT) Investor Profile: Who’s Buying and Why?.

Walmart Inc. (WMT) Profitability Metrics

Analyzing Walmart Inc.'s profitability involves looking at its gross profit, operating profit, and net profit margins to understand how efficiently the company converts revenue into profit. These metrics reveal the financial health and operational effectiveness of Walmart.

For the fiscal year 2024, Walmart reported a gross profit of $142.7 billion. The operating income stood at $27.0 billion, and the net income attributable to Walmart was $15.5 billion. These figures provide a snapshot of Walmart's earnings at different stages of its operations.

Here's a breakdown of Walmart's profitability margins:

• Gross Profit Margin: Approximately 24%. This is calculated by dividing the gross profit by the total revenue.
• Operating Profit Margin: Around 4.6%. This is derived from dividing the operating income by the total revenue.
• Net Profit Margin: Roughly 2.6%. This comes from dividing the net income by the total revenue.

Examining these margins over time helps to identify trends in Walmart's profitability. For instance, improvements in cost management or pricing strategies can lead to higher margins. Conversely, increased operating expenses or lower sales can decrease these margins.

When comparing Walmart's profitability ratios with industry averages, it's important to consider the scale and scope of Walmart's operations. Industry averages can vary widely, but comparing Walmart to its direct competitors offers valuable insights. The ability to maintain or exceed these averages indicates strong competitive positioning and efficient management.

Operational efficiency is critical to Walmart's profitability. Effective cost management, including supply chain optimization and expense control, directly impacts the gross margin. Trends in gross margin can highlight the success of these operational strategies.

The following table summarizes Walmart's key profitability figures for fiscal year 2024 (in billions of U.S. dollars):

Understanding these metrics provides investors and analysts with a clear view of Walmart's financial health and its ability to generate profits from its vast retail operations. For more insights into Walmart, consider reading: Exploring Walmart Inc. (WMT) Investor Profile: Who’s Buying and Why?

Walmart Inc. (WMT) Debt vs. Equity Structure

Understanding how Walmart Inc. (WMT) finances its operations and growth is crucial for investors. This involves analyzing its debt levels, debt-to-equity ratio, and overall approach to balancing debt and equity funding. Here’s a detailed look at Walmart's financial structure:

Walmart's debt levels consist of both long-term and short-term debt, which the company uses to fund various aspects of its business, from day-to-day operations to strategic investments. As of January 31, 2024, Walmart's total long-term debt stood at $40.749 billion. Additionally, the company has short-term debt, which can fluctuate based on immediate financial needs and seasonal demands.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. It indicates the proportion of debt and equity Walmart uses to finance its assets. As of January 31, 2024, Walmart's debt-to-equity ratio is approximately 0.66. This ratio suggests that Walmart uses a moderate amount of debt compared to equity. When compared to industry standards, this ratio can provide insights into whether Walmart's leverage is conservative, aggressive, or in line with its peers.

Recent financial activities, such as debt issuances or refinancing, can significantly impact Walmart's capital structure. For example, in February 2024, Walmart priced $7 billion of fixed-rate notes, divided into several series maturing between 2027 and 2054. These funds are earmarked for general corporate purposes, including refinancing existing debt. The company’s credit ratings also play a crucial role in determining its borrowing costs and financial flexibility. Ratings agencies like Moody's and S&P provide ratings that reflect Walmart's creditworthiness, influencing investor confidence and the terms at which Walmart can issue debt.

Walmart strategically balances debt financing with equity funding to optimize its capital structure. Equity funding, primarily through retained earnings and stock issuances, reduces the company's reliance on debt, providing a cushion against financial risk. Maintaining this balance is vital for sustaining financial health and supporting long-term growth initiatives. The decision to use debt versus equity is influenced by factors such as interest rates, market conditions, and the company's strategic priorities.

Here's a summary of Walmart's debt and equity structure:

• Long-Term Debt: $40.749 billion (as of January 31, 2024)
• Debt-to-Equity Ratio: Approximately 0.66 (as of January 31, 2024)
• Recent Debt Issuance: $7 billion in fixed-rate notes (February 2024)

For further insights into Walmart's financial health, check out: Breaking Down Walmart Inc. (WMT) Financial Health: Key Insights for Investors

Walmart Inc. (WMT) Liquidity and Solvency

When evaluating a company's financial health, liquidity and solvency are critical factors. Liquidity refers to the ability of a company to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations. Let's delve into Walmart Inc.'s (WMT) liquidity position.

Here's an analysis of Walmart's liquidity, incorporating key financial ratios and cash flow trends:

• Current Ratio:

  Walmart's current ratio for the quarter ending January 31, 2025, was 0.82. This indicates that Walmart's current assets are 82% of its current liabilities. Historically, Walmart's current ratio for fiscal years ending January 2021 to 2025, averaged 0.9x. The current ratio hit its 5-year low in January 2023 of 0.8x.

• Quick Ratio:

  The quick ratio, which excludes inventories from current assets, provides a more conservative view of liquidity. Walmart's quick ratio for the quarter ending January 2025 was 0.24. This ratio has fluctuated over the years, with the highest quick ratio during the past 13 years being 0.49 and the lowest being 0.20. Walmart's quick ratio last quarter was 0.2x. Walmart's quick ratio for fiscal years ending January 2021 to 2025 averaged 0.2x.

The current and quick ratios provide a snapshot of Walmart's ability to cover its short-term liabilities with its most liquid assets. A current ratio of 0.82 suggests that Walmart may have difficulty meeting its current obligations. A quick ratio of 0.24 indicates that the company cannot currently fully pay back its current liabilities. However, low ratios do not always indicate a critical problem, especially for companies like Walmart with strong long-term prospects and the ability to borrow against them.

Walmart generally operates with a working capital deficit due to its efficient use of cash in funding operations, consistent access to the capital markets, and returns provided to its shareholders in the form of payments of cash dividends and share repurchases.

Here's an overview of Walmart's working capital trends:

• Net Working Capital:

  Walmart's net working capital for fiscal years ending January 2021 to 2025 averaged -$17.303 billion. Walmart’s net working capital hit its 5-year low in January 2024 of -$18.868 billion.

• Change in Net Working Capital:

  Walmart's latest twelve months change in net working capital is $670 million. Over the past five years, Walmart's change in net working capital has varied, peaking in January 2021 at $2.185 billion and hitting a low in January 2023 of -$2.703 billion.

The negative net working capital indicates that Walmart has more current liabilities than current assets. However, this is not necessarily a sign of financial distress. Walmart's efficient cash management and strong supplier relationships allow it to operate with a working capital deficit.

Here's a summary of Walmart's cash flow trends, based on the Consolidated Statements of Cash Flows:

Walmart's cash flow from operating activities has generally been positive and increasing, indicating its ability to generate cash from its core business operations. For 2024, Walmart's annual cash flow from operating activities was $35.726B, a 23.87% increase from 2023.

Interested in learning more about Walmart's broader strategic vision? Check out: Mission Statement, Vision, & Core Values of Walmart Inc. (WMT).

Walmart Inc. (WMT) Valuation Analysis

Assessing whether Walmart Inc. (WMT) is overvalued or undervalued requires analyzing key financial ratios and indicators.

Here's a breakdown:

• Price-to-earnings (P/E) Ratio: Walmart's latest twelve months P/E ratio is 38.3x. The P/E ratio for fiscal years ending January 2021 to 2025 averaged 35.5x.
• Price-to-book (P/B) Ratio: As of April 19, 2025, Walmart's P/B ratio is 7.68. The average P/B ratio for 2024 was 5.8, a 19.1% increase from 2023.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Walmart's latest twelve months EV/EBITDA is 19.0x. The EV/EBITDA for fiscal years ending January 2021 to 2025 averaged 13.8x.

These ratios provide insights into how the market values Walmart relative to its earnings, book value, and operational cash flow.

Over the last 12 months, Walmart's (WMT) stock price has increased by 56.28%. As of April 17, 2025, the closing share price was $93.22, a 2.23% increase from the previous day.

Here's a brief overview of Walmart's (WMT) stock price history:

Walmart's 52-week high is $105.30 (reached on 2/14/2025), and the 52-week low is $58.56 (reached on 4/23/2024).

Walmart's latest twelve months payout ratio is 34.4%. The payout ratio for fiscal years ending January 2021 to 2025 averaged 43.3%.

Additional dividend information includes:

• Annual Dividend: $0.94 per share
• Dividend Yield: Approximately 1.01%
• Ex-Dividend Date: December 12, 2025
• Next Dividend Payment: January 5, 2026, at $0.235 per share

Based on 33 Wall Street analysts, Walmart has a consensus rating of 'Moderate Buy'.

Here's a summary of analyst recommendations:

• Strong Buy: 1
• Buy: 30
• Hold: 2
• Sell: 0

The average price target is $103.58, with a high forecast of $120.00 and a low forecast of $81.00.

For more insights into Walmart, check out this detailed investor profile: Exploring Walmart Inc. (WMT) Investor Profile: Who’s Buying and Why?

Walmart Inc. (WMT) Risk Factors

Walmart Inc. (WMT) faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company's stability and growth potential.

Here's an overview of key risk areas:

• Industry Competition: The retail sector is highly competitive. Walmart faces intense competition from other large retailers, e-commerce giants, and discount stores. Changes in consumer preferences, the rise of online shopping, and aggressive pricing strategies by competitors can all affect Walmart's market share and profitability.
• Regulatory Changes: Walmart is subject to numerous laws and regulations both in the United States and internationally. These include regulations related to labor, environmental protection, product safety, and data privacy. Changes in these regulations can increase compliance costs and potentially lead to fines or other penalties.
• Market Conditions: Economic downturns, changes in consumer spending habits, and global events can all impact Walmart's financial performance. For example, a recession could lead to decreased consumer spending, affecting sales and revenue.
• Supply Chain Disruptions: Disruptions in the supply chain, whether due to natural disasters, geopolitical events, or other factors, can impact Walmart's ability to stock shelves and meet customer demand. This can lead to lost sales and decreased customer satisfaction.
• Cybersecurity Threats: As a large retailer, Walmart handles a vast amount of customer data, making it a target for cyberattacks. Data breaches and other cybersecurity incidents can result in financial losses, reputational damage, and legal liabilities.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. These include:

• Operational Risks: These involve challenges in managing Walmart's vast network of stores, distribution centers, and employees. Issues such as inventory management, labor shortages, and supply chain inefficiencies can impact operational effectiveness.
• Financial Risks: These relate to Walmart's financial structure, including debt levels, interest rates, and currency exchange rates. Fluctuations in these factors can affect the company's profitability and cash flow.
• Strategic Risks: These involve decisions related to Walmart's long-term strategy, such as investments in e-commerce, international expansion, and new business ventures. Poor strategic decisions can lead to financial losses and missed opportunities.

Mitigation strategies and plans Walmart employs to address these risks may include:

• Diversifying Supply Chains: Reducing reliance on single suppliers or regions to minimize the impact of disruptions.
• Investing in Cybersecurity: Implementing advanced security measures to protect customer data and prevent cyberattacks.
• Enhancing Compliance Programs: Strengthening compliance programs to ensure adherence to laws and regulations.
• Improving Operational Efficiency: Streamlining operations and using technology to improve efficiency and reduce costs.
• Strategic Hedging: Using financial instruments to hedge against currency fluctuations and interest rate changes.

Understanding these risks and Walmart's strategies to mitigate them is essential for investors. For more insights into Walmart Inc. (WMT), consider exploring Exploring Walmart Inc. (WMT) Investor Profile: Who’s Buying and Why?.

Walmart Inc. (WMT) Growth Opportunities

Walmart Inc. (WMT) has several key growth drivers that it can leverage to enhance its financial performance. These include product innovations, market expansions, and strategic acquisitions. Understanding these drivers, along with revenue growth projections and competitive advantages, is crucial for investors assessing the company's future.

Analysis of key growth drivers:

• Product Innovations: Walmart is focusing on enhancing its product offerings through private label brands and innovative products. This strategy not only boosts margins but also attracts a broader customer base.
• Market Expansions: Walmart continues to expand its global footprint, particularly in high-growth markets like India and China, through strategic partnerships and investments.
• Acquisitions: Walmart has a track record of acquiring companies to enhance its capabilities in e-commerce, technology, and logistics, driving further growth.

Future revenue growth projections and earnings estimates indicate a positive trajectory for Walmart. Analysts predict steady revenue growth, driven by e-commerce and international expansion. Earnings estimates also show an upward trend, supported by cost-saving initiatives and operational efficiencies.

Strategic initiatives and partnerships play a crucial role in Walmart's growth strategy:

• E-commerce Investments: Walmart is heavily investing in its e-commerce platform to compete with other online retailers. This includes improving its online shopping experience, expanding its delivery capabilities, and offering more online services.
• Partnerships: Strategic alliances with technology companies and other retailers enable Walmart to leverage new technologies and expand its market reach.
• Supply Chain Optimization: Walmart is focused on optimizing its supply chain to reduce costs and improve efficiency. This includes investing in automation, data analytics, and logistics infrastructure.

Walmart's competitive advantages position it favorably for sustained growth:

• Scale and Market Leadership: Walmart's massive scale and market-leading position give it significant bargaining power with suppliers and economies of scale.
• Brand Recognition: Walmart's strong brand recognition and customer loyalty provide a solid foundation for growth.
• Omnichannel Presence: Walmart's integrated online and offline presence allows it to serve customers seamlessly through various channels.

To better illustrate Walmart's financial outlook, consider the following projections based on available data and analyst estimates. Please note that these are estimates and actual results may vary.

These projections suggest continued growth, driven by both traditional retail and e-commerce channels. Strategic initiatives, such as supply chain improvements and enhanced customer experiences, are expected to support these financial outcomes.

Furthermore, understanding Walmart's core values and strategic vision can provide additional insight into its long-term growth strategy. Learn more about this aspect at: Mission Statement, Vision, & Core Values of Walmart Inc. (WMT).