Walmart Inc (WMT)
Liquidity ratios
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.83 | 0.82 | 0.93 | 0.97 | 0.79 |
| Quick ratio | 0.29 | 0.30 | 0.41 | 0.42 | 0.27 |
| Cash ratio | 0.20 | 0.21 | 0.32 | 0.35 | 0.19 |
Walmart Inc's liquidity ratios have shown some fluctuations over the past five years.
The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has been fluctuating between 0.79 and 0.97. A current ratio below 1 indicates that Walmart may have difficulty meeting its short-term obligations, which suggests a potential liquidity risk.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also displayed variability, ranging from 0.27 to 0.42. The downward trend in the quick ratio implies that Walmart may have limited ability to meet its short-term obligations without relying on inventory sales.
The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, has shown similar fluctuations, with values ranging from 0.19 to 0.35. The decreasing trend in the cash ratio suggests that Walmart may have a decreasing ability to cover its short-term liabilities with its available cash resources.
Overall, Walmart's liquidity ratios indicate uneven performance in meeting its short-term obligations over the past five years. The decreasing trend in these ratios suggests a potential liquidity challenge that the company may need to address to strengthen its financial position.
See also:
Additional liquidity measure
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 3.52 | 6.97 | 6.34 | 0.61 | 2.03 |
The cash conversion cycle of Walmart Inc has fluctuated over the past five years. As of January 31, 2024, the company's cash conversion cycle stood at 3.52 days, indicating that it takes approximately 3.52 days for Walmart to convert its investments in inventory and other resources into cash flows from sales. This represents an improvement compared to the previous year, where the cash conversion cycle was 6.97 days.
In 2023, Walmart experienced a longer cash conversion cycle compared to 2022 when it was 6.34 days and 0.61 days, respectively. The sharp increase in the cash conversion cycle in 2023 could suggest inefficiencies in managing inventory or collecting receivables.
In 2021, Walmart had a notably low cash conversion cycle of 0.61 days, indicating efficient management of working capital and swift conversion of assets into cash. This was followed by a slight increase to 2.03 days in 2020, which still reflected a relatively efficient cash conversion cycle.
Overall, the trend in Walmart's cash conversion cycle demonstrates fluctuations over the five-year period, with improvements in some years and challenges in others. Analyzing the components of the cash conversion cycle, such as inventory turnover, accounts receivable turnover, and accounts payable turnover, could provide further insights into Walmart's working capital management efficiency.