Walmart Inc. (NYSE:WMT)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes displays a fluctuating trend over the observed periods. It experienced a slight decline from 18,200 million USD in early 2020 to 15,307 million USD by early 2022, continuing to decrease to 13,880 million USD in early 2023. However, a strong recovery occurred thereafter, reaching 18,517 million USD in early 2024 and further increasing to 22,003 million USD in early 2025, marking the highest value in the timeframe.

Cost of Capital

The cost of capital has shown a steady increase throughout the periods, moving from 8.88% in early 2020 to 9.74% by early 2025. This gradual upward trend suggests an increasing expense for the company to finance its operations or investments.

Invested Capital

Invested capital exhibits a generally downward trend from 167,329 million USD in early 2020 to a low of 149,558 million USD in early 2023. Following this trough, an upward trend is observed, with invested capital rising to 161,279 million USD by early 2025. This indicates that the company initially reduced its capital base before subsequently increasing investments.

Economic Profit

The economic profit experienced substantial volatility during the timeframe. Initially, it declined from 3,339 million USD in early 2020 to a marginally positive 747 million USD in early 2022. It then turned negative, reaching -90 million USD in early 2023, indicating a period when the company did not generate returns exceeding its cost of capital. Subsequent periods saw a significant rebound, with economic profit rising sharply to 3,714 million USD in early 2024 and 6,297 million USD in early 2025, representing a strong recovery and improved value creation.

Summary of Trends

Overall, the data reflects a period of contraction in performance and investment between 2020 and 2023, characterized by declining profitability, invested capital, and a dip into negative economic profit. From early 2024 onwards, the company demonstrates marked improvement, with increasing NOPAT, invested capital, and economic profit, despite a persistently rising cost of capital. This suggests enhanced operational efficiency or strategic initiatives yielding higher returns on capital invested, leading to improved economic value creation in the most recent periods.

Consolidated net income attributable to Walmart

The net income shows a fluctuating trend over the years. It started at 14,881 million USD in 2020, decreased to 13,510 million USD in 2021, and slightly increased to 13,673 million USD in 2022. There was a notable decline in 2023 to 11,680 million USD. However, in the subsequent years, a significant recovery and growth are observed, with net income rising to 15,511 million USD in 2024 and further increasing sharply to 19,436 million USD in 2025.

Net operating profit after taxes (NOPAT)

NOPAT demonstrates a general downward trend between 2020 and 2023, beginning at 18,200 million USD in 2020 and decreasing to 18,130 million USD in 2021. This decline continues more sharply through 2022 (15,307 million USD) and 2023 (13,880 million USD). From 2024 onwards, a strong recovery is evident, with NOPAT rising significantly to 18,517 million USD and then to 22,003 million USD in 2025.

Overall Analysis

Both net income and NOPAT experienced declines during the early years, particularly from 2020 to 2023, suggesting pressures on profitability possibly due to operational or market challenges. The drop in NOPAT is more pronounced, indicating operational efficiency or cost factors impacting returns after taxes. From 2024 to 2025, a notable reversal occurs, showing substantial growth in both profitability measures that surpass the initial levels reported in 2020. This suggests the company improved its operational performance and overall profitability during the latter period, potentially reflecting successful strategic initiatives, enhanced revenue generation, or cost management improvements.

The analysis of the provision for income taxes and cash operating taxes over the reported years reveals several key trends and insights into the company's tax-related financial performance.

Provision for Income Taxes

The provision for income taxes exhibits fluctuation across the examined periods. Starting at a lower level in the earliest year, it increased significantly in the second year, reaching its highest recorded value during this span. Following this peak, the provision decreased notably in the third year, indicating variability in taxable income or changes in tax regulations. Subsequently, it showed a moderate upward trend in the last two years, though not surpassing the earlier peak. Overall, this item demonstrates a pattern of volatility rather than steady growth or decline.

Cash Operating Taxes

Cash operating taxes show a generally increasing trend over the entire period. The values rise steadily year over year with minor deviations, suggesting growing tax cash outflows possibly driven by increased operating income or changes in cash tax settlement timing. The most notable increase occurs in the final year analyzed, which could indicate heightened tax payments or shifts in tax planning strategies resulting in greater actual cash disbursements for taxes.

Comparison and Interpretation

The divergence between provision for income taxes and cash operating taxes is apparent, where cash taxes consistently trend upwards more smoothly, whereas provisions are more volatile. This may reflect differences in accrual versus cash accounting methods for taxes, timing differences in tax payments, or adjustments due to tax law changes or deferred tax assets and liabilities. The steady increase in cash operating taxes, particularly the sharp rise in the latest period, warrants further investigation into the company's tax payment policies and operational profitability.

Total reported debt & leases

The total reported debt and leases exhibit a decreasing trend from January 31, 2020, to January 31, 2022, declining from 72,433 million US dollars to 57,323 million US dollars. This downward trend is somewhat reversed in the subsequent periods, with an increase to 61,321 million US dollars by January 31, 2024, before a slight decrease to 60,114 million US dollars in January 31, 2025. Overall, the debt and leases remain below the initial 2020 level, indicating a reduction over the five-year span despite minor fluctuations.

Total Walmart shareholders’ equity

Shareholders' equity shows a generally increasing trajectory over the analyzed periods. Starting at 74,669 million US dollars in January 2020, it rises steadily to peak at 83,253 million US dollars in January 2022. Although a dip occurs in January 2023 to 76,693 million US dollars, the equity rebounds strongly in subsequent years, reaching 91,013 million US dollars by January 2025. This pattern suggests growth in the company’s net value with temporary volatility in early 2023.

Invested capital

Invested capital demonstrates a consistent downward trend from 167,329 million US dollars in January 2020 to a low of 149,558 million US dollars in January 2023. However, after this point, there is an upward correction onward to 161,279 million US dollars by January 2025. This movement could reflect strategic capital management with periods of capital reduction followed by reinvestment or asset growth.

Economic Profit

The economic profit experienced significant fluctuations over the six-year period. Starting at a high of 3,339 million USD in 2020, it slightly declined to 3,124 million USD in 2021 and then sharply decreased to 747 million USD in 2022. This downward trend culminated in a negative economic profit of -90 million USD in 2023, indicating a period of economic loss. However, the trend reversed markedly in the following years, with economic profit rising to 3,714 million USD in 2024 and further increasing to 6,297 million USD in 2025, reaching its highest value in the dataset.

Invested Capital

Invested capital showed a general downtrend from 2020 through 2023. It reduced from 167,329 million USD in 2020 to a low of 149,558 million USD in 2023, suggesting a reduction in capital invested during this timeframe. After 2023, there was a gradual increase, with invested capital reaching 155,389 million USD in 2024 and continuing upward to 161,279 million USD in 2025. This pattern indicates a strategic reinvestment or expansion following the period of decline.

Economic Spread Ratio

The economic spread ratio, which reflects the efficiency and profitability of invested capital, mirrored the economic profit trends closely. Starting at 2.0% in 2020, it declined slightly to 1.9% in 2021 and then fell significantly to 0.48% in 2022. The ratio turned negative to -0.06% in 2023, consistent with the negative economic profit of that year. Subsequently, the ratio strongly rebounded to 2.39% in 2024 and increased further to 3.9% in 2025, indicating improved returns on invested capital and enhanced operational performance.

Overall Analysis

The financial data reveals a period of economic stress and reduced returns from 2021 to 2023, characterized by declining economic profit, invested capital, and economic spread ratio, including a brief phase of economic loss in 2023. Following this, there is a clear recovery and growth phase starting in 2024 with gains in economic profit and efficiency ratios alongside increased invested capital. This suggests a successful turnaround and improved capital utilization in recent years.

Net Sales

The net sales have demonstrated a consistent upward trend over the six-year period. Starting from approximately $520 billion in 2020, sales increased steadily each year, reaching around $674.5 billion by 2025. This reflects a strong growth rate in the company's revenue base.

Economic Profit

Economic profit showed variability across the years. It started at a high level of about $3.3 billion in 2020 and slightly declined to around $3.1 billion in 2021. A significant drop occurred in 2022 and 2023, with economic profit dipping to $747 million and then to a negative value of $90 million, respectively. However, there was a notable recovery in 2024 and 2025, with economic profit climbing sharply to $3.7 billion and then to $6.3 billion, surpassing earlier peak values.

Economic Profit Margin

The economic profit margin parallels the fluctuations observed in economic profit. The margin decreased from 0.64% in 2020 to a low of -0.01% in 2023, indicating a period where the company’s economic profit was almost nil or negative relative to sales. This was followed by a recovery phase, with the margin rising to 0.58% in 2024 and further to 0.93% in 2025, suggesting improved profitability efficiency relative to sales in the final years.

Overall Analysis

The data indicates consistent revenue growth throughout the period, despite challenges impacting economic profit in 2022 and 2023. The negative economic profit margin in 2023 suggests a period of operational or other costs that temporarily outweighed the company’s economic value creation. The subsequent strong rebound in both economic profit and its margin points to effective corrective measures or favorable market conditions restoring profitability. The upward trend at the end of the period highlights a positive outlook for economic value generation relative to sales.