Walmart Inc. (NYSE:WMT)

The analysis of the financial ratios and associated periods reveals distinct trends and fluctuations in operational efficiency and liquidity management.

Inventory Turnover

The inventory turnover ratio demonstrates variability over time, initially increasing from 8.88 to 9.94 before experiencing a decline reaching a low around 7.01 to 7.06 in certain quarters. Subsequently, the ratio shows recovery and improvement, climbing back towards the 9.0 range by the later periods. This suggests periods of both accelerated and slowed inventory movement, reflecting changes in stock management effectiveness or demand fluctuations.

Receivables Turnover

The receivables turnover ratio starts at a high level above 80 and peaks around 105, indicating efficient collection processes early on. However, there is a noticeable downward trend thereafter, stabilizing in a lower range between approximately 65 and 80. This decrease indicates a lengthening in the time taken to collect receivables, potentially signaling changes in credit policy, customer payment behavior, or economic conditions impacting cash inflows.

Payables Turnover

The payables turnover ratio displays moderate fluctuations, generally oscillating between 7.5 and 9.15. The pattern indicates a relatively consistent approach to managing supplier payments, with occasional periods of faster or slower payment cycles, possibly linked to cash management strategies or supplier terms adjustments.

Average Inventory Processing Period

This metric exhibits inverse trends relative to inventory turnover, with the number of days generally ranging from the high 30s to the low 50s. An initial decrease to about 37 days suggests improved inventory handling speed, but this is followed by increases up to around 52 days at certain points, indicating occasional slowdowns in inventory turnover. The changes correspond with the inventory turnover ratio movement, reflecting its cyclical nature.

Average Receivable Collection Period

The average receivable collection period remains relatively steady, mostly between 3 to 6 days, with a slight increase towards the later periods. This stability aligns with the receivables turnover trend, although the minor increase towards the end suggests a modest relaxation in collection efficiency.

Operating Cycle

The operating cycle duration shows an overall increase from approximately 40 days to peaks of around 57 days. This elongation indicates that the time between inventory acquisition and cash collection has grown, suggesting slower operational cash conversion in certain periods.

Average Payables Payment Period

The average payables payment period fluctuates around the low to mid-40s days, with variations that generally mirror changes in payable turnover ratio. The slight oscillations hint at tactical adjustments in payment timing, which may be used to manage cash flow dynamics effectively.

Cash Conversion Cycle

The cash conversion cycle (CCC) shows notable volatility, initially near break-even or negative, implying efficient cash flow management or extended payables terms. However, over time, the CCC increases to values as high as 12 days, indicating longer intervals between outlay and recovery of cash. This rising trend points to increasing working capital requirements and a potential decline in cash liquidity efficiency.

Overall, the data indicate periods of both strong operational efficiency and instances of slower cash flow conversion. Inventory and receivables management show cycles of improvement and deterioration, affecting key cash flow metrics such as the operating and cash conversion cycles. Payables management remains relatively stable but with small adjustments that may reflect strategic cash management approaches. These insights highlight the importance of continued focus on working capital optimization to maintain financial flexibility.

The cost of sales exhibits variability across the quarters with a general upward trend over the observed periods. Starting from approximately 93,034 million US dollars in April 2019, the cost increased progressively, peaking intermittently around 136,172 million US dollars by January 2025. This trend indicates a rise in the expenses related to goods sold, reflecting possibly increased sales volume or higher procurement costs.

Inventories show notable fluctuations throughout the timeframe. Initially valued at about 44,751 million US dollars in April 2019, inventories decreased and increased in cycles, reaching highs above 64,000 million US dollars notably around October 2022 and near the end of the data period. Despite these fluctuations, there is no clear consistent upward or downward trend but rather seasonally influenced changes, suggesting adjustments in stock levels possibly to meet changing demand or supply chain conditions.

Inventory turnover ratios, available only from April 2020 onwards, display some variation with values ranging from approximately 7.01 to 9.94. The turnover peaked around 9.94 soon after the data began to report this metric and showed a tendency to decline toward the middle of the observed period before recovering slightly later, indicating fluctuations in the efficiency of inventory usage. Higher turnover suggests quicker inventory movement relative to sales, while lower values imply slower sales or accumulation of stock.

Overall, the analysis indicates that both the cost of sales and inventories have experienced cyclical changes with an underlying increase in absolute values over the analyzed quarters. The inventory turnover ratio reflects changing inventory management efficiency, which may correspond with the variations in inventories and cost of sales. These dynamics point to a need for continuous monitoring of inventory policies and cost controls to maintain optimal operating performance.

Cost of Sales

Increased over time with periodic peaks, moving from around 93 billion to over 136 billion US dollars, suggesting growing scale or cost pressures.

Inventories

Fluctuated seasonally without a definitive trend, with values between approximately 41 billion and 64 billion US dollars, indicating adjustments in stock levels possibly driven by demand or supply chain factors.

Inventory Turnover

Varied between roughly 7.0 and 9.9, showing fluctuations in the rate at which inventory is sold and replaced, reflecting changes in operational efficiency and inventory management.

The analysis of the financial data over the examined periods reveals several key trends in net sales, receivables, and receivables turnover ratios.

Net Sales

Net sales demonstrate a generally upward trajectory across the examined quarters. Beginning at approximately 122,949 million USD in April 2019, net sales increased consistently with some fluctuations, peaking at 178,830 million USD in January 2025. Notably, there are seasonal patterns observable, with increases often seen in the fourth quarters and at the start of calendar years, likely reflecting holiday sales boosts and new year's economic activity. Despite minor declines or plateaus in some quarters (e.g., April to July 2020 and October 2023 to January 2024), the overall trend is growth, indicating improving revenue generation over time.

Receivables, Net

The net receivables exhibit a rising trend broadly consistent with the growth in net sales, starting from 5,342 million USD in April 2019 and reaching a higher range, around 10,518 million USD by July 2025. While increases are steady, certain periods show more pronounced jumps, such as from October 2020 (5,770 million USD) to January 2021 (6,516 million USD), and also from October 2023 (10,039 million USD) to January 2024 (9,975 million USD) where a slight decline is observed. These increases suggest a growing amount of credit sales or delays in collection, corresponding with the scale of overall sales growth. The pattern implies effective sales expansion, balanced with receivables management challenges that could arise as receivables increase.

Receivables Turnover Ratio

The receivables turnover ratio shows a decreasing trend across the periods for which data is available, beginning near 82.74 and descending to around 65.28 by April 2025. This ratio decline indicates that the company is turning over its receivables less frequently, suggesting a lengthening in the average collection period. The lower turnover may reflect extended credit terms, increased credit risk, or slower collection processes as receivables grow. The variability in the ratio also suggests periods of operational adjustments or external factors influencing collections. This trend, when considered with increasing net receivables, may warrant attention to receivables management practices to maintain liquidity efficiency.

In summary, the data suggest a firm experiencing growth in revenue, accompanied by increasing receivables and a gradual decline in receivables turnover efficiency. These dynamics reflect both expansion opportunities and potential risks in accounts receivable management that could impact cash flow performance if not carefully monitored.

The analysis of the financial data reveals several noteworthy trends over the time periods presented.

Cost of Sales

The cost of sales has exhibited a generally upward trend with fluctuations across the quarters. Starting at approximately 93,034 million US dollars in April 2019, it rose considerably to 131,825 million US dollars by January 2024. Periodic increases are apparent, especially notable spikes around January of each year, indicating possible seasonality effects or end-of-year inventory and sales impacts. Despite some periods of slight decline or stabilization, the overall trajectory indicates increasing costs, reflective potentially of growing sales volumes, inflation, or supply chain cost changes.

Accounts Payable

Accounts payable values also depict a growth trend but with some variability. Beginning at around 45,110 million US dollars in April 2019, the figure increased steadily with some quarterly fluctuations to reach about 60,086 million US dollars in July 2024. The pattern suggests the company is managing increasing liabilities, possibly supporting the increased cost of goods sold, but also reflects changes in payment cycles or supplier credit terms. Some quarters show noticeable jumps (e.g., between July and October 2019 and between October 2023 and January 2024), pointing to periodic adjustments in payables management.

Payables Turnover Ratio

The payables turnover ratio fluctuates moderately within a range roughly between 7.5 and 9.15 times per year, implying relative stability in the speed with which the company settles its accounts payable. The ratio shows some quarter-to-quarter variation but no clear trend of consistent increase or decrease. The fluctuations indicate periodic alterations in payment timing relative to purchases, with peaks around mid-2019 and early 2024 suggesting faster payment cycles during these periods, while troughs correspond to slower settlements. The maintenance of this ratio within a narrow band indicates disciplined payable management relative to cost of sales over the years.

In summary, the data indicates that cost of sales and accounts payable have both grown substantially over the analyzed periods, reflecting the expansion of transactional volumes or inflationary pressures. Meanwhile, the payables turnover ratio remains relatively stable, suggesting that the company has maintained consistent efficiency in managing its payment obligations. The seasonal spikes observed in cost of sales and accounts payable suggest cyclical business patterns that may warrant further operational consideration.

The analysis of the financial data reveals several important trends regarding working capital, net sales, and their interplay over the multiple quarterly periods presented.

Working Capital

The working capital figures consistently show negative values throughout the observed periods, indicating that current liabilities exceed current assets. This pattern points to a business model or operating cycle that relies on leveraging current liabilities strategically. Initially, the negative working capital remained relatively stable around -18,000 million USD but experienced some fluctuations. Notably, around early 2021, the negative working capital value decreased substantially to approximately -2,500 million USD, suggesting either an improvement in short-term asset liquidity or a reduction in current liabilities. However, this improvement was temporary, as the negative working capital increased again in subsequent quarters, reaching levels as low as approximately -22,600 million USD by April 2025. This return to deeper negative territory may indicate heightened operational financing needs or other strategic decisions affecting working capital management.

Net Sales

Net sales showed an overall upward trend across the entire timeline, with initial values around 123,000 million USD in April 2019 progressively increasing to approximately 176,000 million USD by July 2025. Seasonal fluctuations are observed, with peaks frequently occurring in the January quarters, likely reflecting holiday sales patterns. Despite some quarter-to-quarter variability, the general trend is positive and robust growth is notable. Sales figures occasionally dipped slightly, for example in April 2020 compared to January 2020, which might correspond to external factors such as the onset of the COVID-19 pandemic impacting consumer behavior. Nevertheless, recovery was swift and compounded growth is evident thereafter.

Working Capital Turnover

Data for working capital turnover ratio is not provided, and therefore direct analysis of this metric is not possible. However, given that working capital is consistently negative, traditional interpretation of working capital turnover might require adjustment or alternative metrics to assess operational efficiency and asset utilization.

Insights and Implications

The persistent negative working capital suggests the use of supplier credit or other short-term financing as a component of working capital management strategy. The transient improvements in working capital around early 2021 may denote tactical adjustments in inventory, payables, or receivables management. The strong net sales growth alongside negative working capital could imply efficient use of vendor financing to support expanding operations. However, the increasing depth of negative working capital in later periods may also indicate potential liquidity risks that warrant close monitoring.

The inventory turnover ratio and the average inventory processing period reveal notable fluctuations over the observed periods. Inventory turnover, expressing how many times inventory is sold and replaced over a period, has predominantly ranged between approximately 7 and 9, indicating a moderate rate of inventory movement with some variability.

Specifically, the turnover ratio experienced a peak around July and October 2020, registering values close to or above 9.7, followed by a decline through early 2022 where it approached a lower bound near 7.0. From 2022 onward, the turnover ratio exhibited a general upward trend, reaching levels slightly above 9 again by late 2024, suggesting an improvement in inventory efficiency during recent periods.

Conversely, the average inventory processing period, measured in days, demonstrates an inverse tendency consistent with the turnover ratio, reflecting the average duration required to sell inventory. Initially, it ranged from approximately 37 to 41 days, spiking notably between late 2019 and early 2022 to values exceeding 50 days at times. This increase corresponds to a slowdown in inventory movement, indicating potential challenges in inventory management or changes in demand.

In more recent periods, from 2022 forward, the average processing period gradually decreased, stabilizing around 40 to 45 days. This reflects a more efficient turnover cycle aligning with the rising inventory turnover figures. Such a trend suggests enhanced operational efficiency in inventory handling or improved market conditions facilitating quicker sales.

Overall, the data indicates cyclical dynamics with periods of both acceleration and deceleration in inventory turnover and processing. The latter years show signs of recovery and optimization in inventory management, as evidenced by the resumed increase in turnover ratio and the corresponding reduction in processing days.

Inventory Turnover Ratio

Displayed variability between approximately 7 to 9.9 times, with a notable dip around early 2022 and a recovery trend thereafter.

Average Inventory Processing Period

Varied inversely from roughly 37 to over 50 days, peaking around early 2022 followed by a steady decrease aligning with turnover improvements.

Trends and Insights

Evidence points to a cyclical pattern in inventory efficiency, with recent periods indicating improved turnover and shorter inventory holding periods, suggesting more effective inventory and supply chain management.

The analysis of the quarterly financial ratios related to receivables reveals several notable trends over the observed periods.

Receivables Turnover Ratio

The receivables turnover ratio shows a general decline from mid-2019 through early 2025. Initially, the ratio peaked above 100 in mid to late 2019 and early 2020, indicating highly efficient receivables management during that period. However, from 2021 onwards, the ratio exhibits a consistent downward trend, decreasing from the high 90s to values in the mid-60s by early 2025. This decline suggests a gradual reduction in the frequency with which receivables are collected over a year.

Average Receivable Collection Period

The average receivable collection period, measured in days, remains relatively stable at around 3 to 4 days initially but shifts upwards starting from 2021. From 2021 through early 2024, the collection period consistently stays at about 5 days, with a minor increase to 6 days observed in the latest quarter of early 2025. This rise corresponds inversely with the falling receivables turnover ratio and implies that, on average, it takes longer for the company to collect receivables in recent periods compared to earlier years.

Overall, the data suggests that over time there has been a decrease in the efficiency of receivables collection, as indicated by decreasing turnover ratios and increasing collection periods. The changes could reflect shifts in credit policies, customer payment behavior, or broader economic conditions impacting cash flow management. Continuous monitoring of these ratios is advisable to ensure receivables management does not adversely affect liquidity.

Average Inventory Processing Period

The average inventory processing period shows variability over the observed timeline, with initial values around 41 days improving slightly to 37 days in mid-2019 to early 2020. Thereafter, it increased, peaking at 52 days in multiple quarters between late 2021 and early 2023, indicating slower inventory turnover during this period. Following this peak, the period moderately declined, stabilizing in the low 40s days toward 2024 and 2025. This pattern suggests fluctuating inventory management efficiency, with a notable slowdown around 2021 and gradual improvement more recently.

Average Receivable Collection Period

The average receivable collection period remains consistently low throughout the period, ranging predominantly between 3 and 6 days. Early observations note a brief improvement to 3 days around mid-2019 to early 2020, while subsequent quarters reflect a slight upward trend settling at about 5 to 6 days in the most recent quarters. This indicates relatively efficient receivables collection with minor elongation over time, yet still maintaining short collection cycles overall.

Operating Cycle

The operating cycle, combining inventory processing and receivable collection, mirrors the trends of the former, fluctuating between 40 and 57 days. It exhibits a decrease from approximately 45 days to a low of 40 days during 2019 and early 2020, followed by an increase to peaks as high as 57 days from late 2021 through early 2023. Subsequently, a downward adjustment occurs with the cycle stabilizing around the mid-40s in the most recent analysis period. This suggests that overall operating efficiency was challenged in the early 2020s but has been improving gradually.

Summary

Overall, the data reflect a phase of increased inventory holding periods and longer operating cycles around 2021 to 2023, possibly influenced by external factors such as supply chain disruptions. Despite the rise during that time, the receivable collection has remained relatively stable and efficient. Recent quarters display signs of improved inventory management and shortened operating cycles, indicating efforts toward enhanced working capital efficiency.

The analysis of the payables turnover ratio and the average payables payment period over the quarters from April 2020 through July 2025 reveals notable trends reflecting the company's payment behavior and supplier management dynamics.

Payables Turnover Ratio

The payables turnover ratio began at 8.4 in April 2020, followed by an increase to a peak of 9.15 in July 2020. Subsequently, it exhibited some fluctuations but mostly remained within a range of approximately 7.5 to 8.9 over the subsequent quarters. Notably, dips to values near 7.5 and 7.76 were observed during January 2021 and January 2022 respectively, indicating slower turnover in those periods. Towards the latter part of the timeline, the ratio generally maintained values above 8.0, with minor declines and recoveries. This pattern suggests variability in how quickly the company paid its suppliers, with periods of both accelerated and decelerated payment activity.

Average Payables Payment Period

The average payables payment period, representing the number of days taken to pay suppliers, inversely mirrored the turnover ratio trends as expected. It started at 43 days in April 2020 and improved to a shorter period of 40 days by July 2020. A notable increase occurred reaching a peak of 49 days in January 2021, indicating slower payments during this period. After fluctuating between 42 and 47 days through 2022 and early 2023, the payment period generally stabilized in the low to mid-40 day range. There were slight decreases to 41 days in mid-2024 and mid-2025, reflecting a trend toward more prompt payments in these recent quarters.

Insights

Overall, the data reflect a pattern of moderate fluctuations in the company's payment efficiency to suppliers. Periods of increased payables turnover ratio corresponded with shorter payment periods, indicating accelerated payments, while declines in turnover ratio aligned with longer payment periods. The company's payment behavior appears to have become slightly more consistent in the later quarters, with payment periods tending towards the lower 40-day range. These fluctuations may be influenced by operational or strategic decisions, seasonal factors, or market conditions affecting supply chain management.

The analysis of the provided financial data reveals notable patterns and shifts in the company's operating cycle components over the observed periods.

Average Inventory Processing Period

This metric demonstrates fluctuations around the low 40s range in terms of days. Starting at 41 days in early 2020, the period drops to lows of 37 days mid-2020 before trending upwards to a peak of 52 days during 2021 to early 2022. Subsequently, it oscillates between 40 and 49 days, indicating variability but generally reflecting a longer inventory holding duration in recent quarters compared to early data points.

Average Receivable Collection Period

The receivable collection period remains consistently low throughout, mostly oscillating between 3 to 6 days. Minimal variation is observed, with a slight upward drift from 4 days in early 2020 to maintaining a steady 5-day plateau from 2021 onward, peaking briefly at 6 days in mid-2025. This suggests stable and efficient receivables management over time with limited collection delays.

Average Payables Payment Period

Payables payment periods show variability within the 40 to 49 days range across the quarters. The period begins in the low 40s, peaks near 49 days early 2021, and then stabilizes around the mid-40s in the subsequent years. A slight downward trend is identifiable in the latest periods, reaching back into the low 40s. This indicates that the company manages to consistently defer payments over a similar timeframe, potentially leveraging supplier credit without significant shortening of payment terms.

Cash Conversion Cycle (CCC)

The cash conversion cycle exhibits variation but stays mostly positive, indicating that the company generally operates with a cash outflow timing lag relative to cash inflows. Early 2020 data show CCC values around 2 days, slipping briefly negative at one point but quickly reverting positive. A gradual increase is observed, with the CCC peaking at 12 days in early 2022 before trending downward to approximately 3 to 6 days during 2024 and 2025. This pattern reflects an overall improvement toward more efficient working capital cycles in recent periods, reducing the time between cash outlay and cash recovery.

Overall, the data suggest that the company maintains a steady and controlled approach to inventory and receivables management, while payables management exhibits a modest decline in duration during recent quarters. The cash conversion cycle, influenced by these components, demonstrates a trend toward greater efficiency in managing net working capital requirements in the most recent periods analyzed.