You think Walmart (USA Stocks:WMT) debt is an issue for private investors?

WMT Stock

USD 143.61 0.56 0.39%

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Walmart is scheduled to announce its earnings tomorrow. Walmart Receivables Turnover is comparatively stable at the moment as compared to the past year. Walmart reported Receivables Turnover of 89.03 in 2022. Inventory Turnover is likely to gain to 7.63 in 2023, whereas Average Equity is likely to drop slightly above 92.9 B in 2023. While some of us are becoming more enthusiastic about food & staples retailing space, let's review Walmart in greater detail to make a better estimate of its debt utilization. We will break down if it could be a much better year for Walmart shareholders.

Published over a month ago

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Reviewed by Michael Smolkin

This firm has 39.11 B in debt with debt to equity (D/E) ratio of 0.81, which is OK given its current industry classification.

The firm maintains a market beta of 0.8064, which attests to possible diversification benefits within a given portfolio. Let's try to break down what Walmart's beta means in this case. As returns on the market increase, Walmart returns are expected to increase less than the market. However, during the bear market, the loss on holding Walmart will be expected to be smaller as well. Even though it is essential to pay attention to Walmart historical price patterns, it is always good to be careful when utilizing equity current price history. Our philosophy towards determining any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Walmart exposes twenty-one different technical indicators, which can help you to evaluate its performance. Walmart has an expected return of -0.0463%. Please be advised to check out Walmart standard deviation, value at risk, as well as the relationship between the Value At Risk and kurtosis to decide if Walmart performance from the past will be repeated at some point in the near future.

You think Walmart (USA Stocks:WMT) debt is an issue for private investors?

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 it down

The company reported the last year's revenue of 572.75 B. Total Income to common stockholders was 13.94 B with profit before taxes, overhead, and interest of 143.75 B.

Asset Breakdown

186.6 B

Assets Non Current

Goodwill

87.1 B

Current Assets

	Total Assets	273.69 Billion
	Current Assets	87.1 Billion
	Assets Non Current	186.59 Billion
	Goodwill	30.9 Billion

Momentum Analysis of Walmart suggests possible reversal in March

Newest Risk Adjusted Performance is up to 0.07. Price may drop again.

As of the 20th of February, Walmart maintains the Downside Deviation of 1.08, market risk adjusted performance of 0.1211, and Mean Deviation of 0.9057. Relative to fundamental indicators, the technical analysis model lets you check existing technical drivers of Walmart, as well as the relationship between them. Specifically, you can use this information to find out if the company will indeed mirror its model of past data patterns, or the prices will eventually revert. We have collected data for nineteen technical drivers for Walmart, which can be compared to its rivals. Please check out Walmart standard deviation, value at risk, as well as the relationship between the Value At Risk and kurtosis to decide if Walmart is priced fairly, providing market reflects its latest price of 146.44 per share. Given that Walmart has jensen alpha of 0.0841, we strongly advise you to confirm Walmart's prevalent market performance to make sure the company can sustain itself at a future point.

Our Final Take On Walmart

When is the right time to buy or sell Walmart? Buying stocks such as Walmart isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.

The inconsistency in the assessment between current Walmart valuation and our trade advice on Walmart is due to the recent market swings and your selection of investing horizon. 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.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

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 Ellen Johnson do not own shares of Walmart. Please refer to our Terms of Use for any information regarding our disclosure principles.

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