Walmart Inc.’s 2022 Annual Report

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Table of Contents

Walmart’s businesses
Summary of the comments made in Introductory Sections
Kinds of shares of stock at Walmart
The pattern of Paying Dividends
Vertical Analysis of Walmarts’ Income Statement and the Balance Sheet
Commenting on Walmart’s
If one had $10,000 and wanted to invest in stocks
References
Appendix

Walmart’s businesses

Incorporated as Walmart Inc., the company runs grocery shops, supermarkets, hypermarts, department and discount stores, and community markets in the United States and internationally. The stores of the firm include groceries and consumables categories, health and wellness categories, technology, office and entertainment categories, hardlines, fashion, and home categories at cheap rates. It also owns and manages warehouse clubs (such as Sam’s Clubs), among other things.

Summary of the comments made in Introductory Sections

Retailer Walmart Inc. (NYSE: WMT) is committed to supporting people worldwide in saving money and enjoying better lives – at any time and from any location – in retail shops, online and through mobile devices, among other things. Each week, more than 230 million consumers and members use the e-Commerce websites of 46 different corporations in 24 different countries and the websites of over 10,000 enterprises and organizations. Walmart has retained its status as a pioneer in environmental sustainability, corporate charitable giving, and equal employment opportunity policies and initiatives.

Kinds of shares of stock at Walmart

Walmart originally sold common stock to the public in 1970, and the company’s stock began trading on the New York Stock Exchange (NYSE: WMT) on August 25, 1972, marking the company’s debut on the stock market. The primary distinction between preferred stock and common stock is that the former often does not provide stockholders with voting rights, whilst the latter does provide such rights.

The pattern of Paying Dividends

Since its inception in 1974, Walmart has given its shareholders an annual cash dividend distributed in quarterly installments.

Vertical Analysis of Walmarts’ Income Statement and the Balance Sheet

Current Ratio

This ratio determines if a company has sufficient assets to pay its obligations over the next twelve months by comparing the number of current assets that a company has to its total amount of current liabilities. Walmart’s current ratio for the most recent twelve months is 0.9x. Walmart’s current ratio for fiscal years ending in January 2018 to fiscal years ending in January 2022 was an average of 0.9x. According to the most recent available data, Walmart’s current ratio reached a high of 1.0x in January 2021 (No, 2022). Walmart’s current ratio, 0.8x in January 2018, was the lowest in five years. When comparing 2018 to 2020, Walmart’s current ratio declined by 0.8 times (11.8 percent), in 2022 (0.9 times -4.6 percent), and 2022 (0.9 times -4.6 percent), while increasing in 2019 (0.8 times, +5.1 percent), and 2021 (1.0 times, +22.4 percent).

Profitability ratios

Accounts Receivable Turnover

The number of times a company collects its average accounts receivable is measured by accounts receivable turnover. Accrual turnover is a statistic used by accountants and analysts to determine how efficiently organizations collect on the credit that they extend to their customers. The AR Turnover Ratio is computed by dividing net sales by the average amount of account receivables collected in a given period (Walmart Inc, 2022). Net sales are calculated as follows: sales on credit minus sales returns minus sales allowances (if applicable).

Inventory Turnover

An inventory turnover ratio may is as a ratio that indicates how many times a company’s inventory is sold and replaced throughout a specific period. During the three months ending January 31, 2022, Walmart’s inventory turnover ratio was 2.04.

Debt to Equity

The company’s debt-to-equity ratio (D/E ratio) is calculated quarterly by dividing total long-term debt by total shareholder equity. It is used in determining the financial health of a firm. For example, if a company has a more significant number, it indicates that the firm has more debt than equity. Keep in mind that certain firms require more money than others.

01/31/2022	42.558%
10/31/2021	44.609%
07/31/2021	49.965%
04/30/2021	52.103%
01/31/2021	51.457%
10/31/2020	52.111%
07/31/2020	56.199%
04/30/2020	64.067%
01/31/2020	73.432%

Cash Flow Yield

The cash flow yield is a financial solvency ratio that compares the predicted free cash flow per share that a firm will earn to the market value per share of the company’s common stock. The free cash flow per share is divided by the current share price to arrive at the free cash flow to share ratio.

Commenting on Walmart’s

Cash Flow Statement

When comparing the fiscal year ended January 31, 2022, to the fiscal year ended January 31, 2021, Walmart had net cash provided by operating activities of $24.2 billion, a decrease compared to the fiscal year ended January 31, 2021. This decrease was primarily due to an increase in inventory costs and purchases to support solid sales and lapping the impact of accelerated inventory sell-through in fiscal 2021 and the timing and payment of wages (Walmart Inc, 2022). When compared to the fiscal year ended January 31, 2021, we generated a free cash flow of $11.1 billion, which was a decrease when compared to the fiscal year ended January 31, 2021, because of the same reasons as the decrease in net cash provided by operating activities, as well as a $2.8 billion increase in capital expenditures.

The quantity of cash that a firm expends is called cash outflow. All of the causes for these monetary payments may be classified into three categories: operating activities, investing operations, and financing operations. According to the company, Walmart spent 3.9 billion dollars on advertising in its fiscal year in January 2022. Compared to the previous year, this represents an increase of 700 million dollars in expenditures by the corporation.

The Walmart brand includes discount stores, supercenters, neighborhood markets, and Sam’s Club warehouse membership clubs. Walmart operates through three business segments: Walmart U.S., Walmart International, and Sam’s Club. According to the International Business Times, from 2020 to 2021, the international corporation, with activities in retail, wholesale, and online products, saw its worldwide sales climb by about 35 billion U.S. dollars. According to Brand Finance, Walmart’s brand value, which refers to the financial worth of a brand, was 45 million dollars in 2020 (Walmart Inc, 2022). This valuation implies that while the retail behemoth ranked below large firms such as Amazon, Alibaba, and Home Depot, it was still among the top five most valuable retail brands globally, according to Brand Finance. At the same time, Walmart was the most successful worldwide retailer in 2019, with revenues of 517 billion U.S. dollars, outpacing the performance of 40 other firms in the sector.

Vertical Analysis of Income Statement and Balance Sheet

According to the business, Walmart’s U.S. fourth-quarter net sales in 2022 increased 5.7 per cent to $105.28 billion, up from $99.59 billion a year earlier, thanks to advances in grocery market share. Sales on a comparable basis increased by 6 per cent (5.6 per cent excluding fuel). The average ticket size climbed by 2.4 per cent, while the total number of transactions increased by 3.1 per cent, following a loss of 10.9 per cent in the previous year’s comparable period. According to the company, Walmart’s overall fiscal 2022 net sales increased by 6.3 per cent to $393.25 billion, up from $369.96 billion in fiscal 2021. Comp-store sales increased by 6.8 per cent and were up 6.4 per cent, excluding gasoline, for a total rise of 15 per cent over the previous two-year period.

This change indicates that Walmart’s prospects are looking good, and it is in profit-making. According to the report, the company’s overall sales grew to $152.9 billion in the three months ended in January, representing a 0.5 per cent gain over the same period the previous year, while operating income improved by 7.3 per cent $5.9 billion (Walmart Inc, 2022). Company profits per share were $1.53, a significant increase from the $1.50 that most industry analysts had predicted.

Ratios

Over the previous two years, Walmart stock has returned approximately 17 per cent to investors. Between March and November of 2020, it gained all of those profits. According to preliminary fiscal 2022 figures, the revenue of $416 billion increased by 3% compared to the same period in fiscal 2021 to reach $416 billion (Walmart Inc, 2022). During the same period, however, net income plummeted by 35% to a little over $10 billion, 35%. Losses resulting from the fluctuation in the value of stock interests and a loss on the sale of Walmart Argentina reduced earnings.

It also had a significant negative impact on free cash flow. During the first nine months of the fiscal year 2022, free cash flow was just $7.7 billion, less than half of the $16.4 billion earned during the previous year. Despite this, the overall figures show a deceleration from fiscal 2021, when revenue increased by 7 percent. However, net income, which was limited by growing expenses and higher income taxes, decreased by 10 percent.

If one had $10,000 and wanted to invest in stocks

At the close of the day on Monday, April 10, common stock for Walmart was at $149.56. Therefore, if one wanted to buy stocks and invested $10,000, one would get an average of 60 shares after fees, transaction costs, and taxes (Walmart Inc, 2022). One would buy common stock as Common stock is a security that represents ownership in a corporation. In a liquidation, common stockholders receive whatever assets remain after creditors, bondholders, and preferred stockholders are paid. There are different varieties of stocks traded in the market.

One would buy stock in the retail giant Walmart as it has made significant investments in its employees, including raising pay and providing benefits to same-sex partners. Walmart as a firm is a desirable option for investors because it has outperformed the S & P 500 over the previous few years. One would buy Walmart’s common stock because the dividend has now been raised annually for 49 straight years. It may not be exciting and may not deliver huge gains, but WMT stock is doing better than many others in 2022, and it is a safe bet during challenging economic times.

References

Walmart Inc, 2022. Annual Report. Walmart Inc 2022.

Appendix

Vertical Analysis Formula(Income Statement) = Income Statement Item / Total Sales * 100
Vertical Analysis Formula(Balance Sheet) = Balance Sheet Item / Total Assets (Liabilities) * 100

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