Walmart Story

WMT -- USA Stock  

USD 151.83  0.47  0.31%

Walmart is scheduled to announce its earnings today. The next earnings report is expected on the 16th of February 2021. Walmart Accounts Payable Turnover is comparatively stable at the moment as compared to the past year. Walmart reported Accounts Payable Turnover of 11.14 in 2019. Operating Margin is likely to gain to 5.07 in 2020, whereas Earnings before Tax are likely to drop slightly above 18.2 B in 2020. As many of us are excited about consumer defensive space, it is fair to review Walmart as a unique alternative.
Published over a week ago
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How much will Walmart owe in December?
The company has 70.24 B in debt with debt to equity (D/E) ratio of 0.87, which is OK given its current industry classification. Walmart has a current ratio of 0.77, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Macroaxis provides trade recommendation on Walmart to complement and cross-verify current analyst consensus on Walmart. Our trade advice engine determines the company's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
Walmart financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Walmart, including all of Walmart's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Walmart assets, the company is considered highly leveraged. Understanding the composition and structure of overall Walmart debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Walmart Total Liabilities

Walmart liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Walmart has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Walmart balance sheet include debt obligations and money owed to different Walmart vendors, workers, and loan providers. Below is the chart of Walmart short long-term liabilities accounts currently reported on its balance sheet.
You can use Walmart financial leverage analysis tool to get a better grip on understanding its financial position

How important is Walmart's Liquidity

Walmart financial leverage refers to using borrowed capital as a funding source to finance Walmart ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Walmart financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Walmart's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Walmart, but it might be worth checking our own buy vs. sell analysis

Breaking down Walmart Indicators

The entity reported the last year's revenue of 542.03 B. Total Income to common stockholders was 17.9 B with profit before taxes, overhead, and interest of 129.36 B.

Liabilities Breakdown

69.6 B
Current Liabilities
41.4 B
Long-Term Liabilities
Total Liabilities138.27 Billion
Current Liabilities69.58 Billion
Long-Term Liabilities41.35 Billion
Tax Liabilities6.43 Billion

How will Walmart private investors react to the next drop?

Semi deviation is down to 1.1. It may call for a possible volatility drop. Walmart has relatively low volatility with skewness of 1.04 and kurtosis of 3.26. However, we advise all investors to independently investigate Walmart to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

The Bottom Line

Whereas other entities in the discount stores industry are either recovering or due for a correction, Walmart may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither acquire nor short any shares of Walmart at this time. The Walmart risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Walmart.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Walmart. Please refer to our Terms of Use for any information regarding our disclosure principles.

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