Walmart Inc. (NYSE:WMT)

Net Operating Profit After Taxes (NOPAT)

Over the observed period, 2020 to 2025, the net operating profit after taxes showed a fluctuating trend. There was an initial slight decline from 18,200 million USD in 2020 to 18,130 million USD in 2021, followed by a more pronounced decrease to 15,307 million USD in 2022 and further down to 13,880 million USD in 2023. However, a notable recovery is evident thereafter, with NOPAT rising significantly to 18,517 million USD in 2024 and further increasing to 22,003 million USD in 2025, surpassing the initial levels from 2020. This suggests a period of operational challenges or lower profitability during 2022 and 2023, followed by a strong recovery and growth phase.

Cost of Capital

The cost of capital demonstrated a gradual upward trend throughout the years. Starting from 8.9% in 2020, it increased steadily each year, reaching 9.77% by 2025. This continuous increase in the cost of capital could be indicative of changing market conditions, higher risk perceptions, or shifts in the company’s capital structure.

Invested Capital

Invested capital decreased steadily from 167,329 million USD in 2020 to 149,558 million USD in 2023, marking a significant reduction in capital invested during this four-year period. From 2023 onwards, invested capital started to rise again, reaching 161,279 million USD in 2025. This pattern suggests a period of capital optimization or divestment followed by renewed investment or expansion activities in the later years.

Economic Profit

Economic profit displayed considerable volatility. It began at a healthy 3,300 million USD in 2020, slightly decreased to 3,084 million USD in 2021, then sharply dropped to 708 million USD in 2022, turning negative to -127 million USD in 2023. Subsequently, economic profit rebounded strongly to 3,674 million USD in 2024 and markedly increased to 6,254 million USD in 2025. The decline and negative reading in 2023 likely reflect the combined impact of reduced NOPAT and the rising cost of capital, whereas the sharp recovery in the later years may indicate improved operational efficiency and a better return on invested capital relative to the cost of capital.

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 exhibited notable fluctuations over the examined period. It started relatively high at $3,300 million in 2020, followed by a gradual decrease through 2021 and 2022, reaching a low of -$127 million in 2023, indicating a period of economic loss. Subsequently, the economic profit recovered significantly to $3,674 million in 2024 and further increased robustly to $6,254 million by 2025, suggesting a strong turnaround and improved profitability.

Invested Capital

The invested capital demonstrated a decreasing trend from 2020 to 2023, declining from $167,329 million to $149,558 million. This reduction indicates a possible divestiture or more efficient capital use during this period. However, there was a reversal of this trend in 2024 and 2025, with invested capital increasing again to $155,389 million and $161,279 million respectively, which could be associated with reinvestment or expansion activities.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, mirrored the trends observed in economic profit. It declined steadily from 1.97% in 2020 to negative territory in 2023 at -0.08%, indicating that the return on invested capital fell below the cost of capital during that year. After 2023, the ratio improved significantly, reaching 2.36% in 2024 and peaking at 3.88% in 2025, which reflects enhanced capital efficiency and value creation in the most recent years.

Summary

Overall, the data reveals a period of decreasing profitability and capital efficiency culminating in a temporary economic loss in 2023, followed by a marked recovery in both economic profit and economic spread ratio. The invested capital trend suggests initial capital reduction followed by reinvestment. The strong rebound in economic profit and spread ratio after 2023 indicates improved operational performance and effective capital utilization in the latest periods.

Net Sales

The net sales of the company demonstrated a consistent upward trend over the six-year period. Starting at approximately 519.9 billion US dollars, sales increased each year, reaching about 674.5 billion US dollars by the end of the period. This steady growth suggests sustained revenue expansion and an increasing market presence.

Economic Profit

Economic profit exhibited volatility across the years. It started strong in 2020 at 3.3 billion US dollars but declined over the next two years, hitting a low point of negative 127 million US dollars in 2023. Following this trough, economic profit rebounded substantially, climbing to 3.7 billion US dollars in 2024 and then more than doubling to 6.3 billion US dollars in 2025. This pattern indicates periods of operational challenges or increased costs impacting profitability, followed by significant recovery and improved efficiency or margin management.

Economic Profit Margin

The economic profit margin mirrored the economic profit trend, initially decreasing from 0.63% in 2020 to near zero and negative territory in 2023, specifically negative 0.02%. Subsequently, the margin recovered to 0.57% in 2024 and further increased to 0.93% in 2025. This fluctuation reflects changes in profitability relative to sales, suggesting a period of reduced return on revenue followed by enhanced profitability efficiency in recent years.

Overall Insights

The data reveals that while revenue steadily increased, profitability experienced disruption mid-period, potentially due to increased costs, investments, or market conditions affecting economic profit negatively. The strong recovery post-2023 in both economic profit and its margin suggests successful strategic or operational adjustments that improved profit generation relative to sales. The improving profitability margins alongside rising sales indicate a strengthening financial position toward the end of the timeframe.