Walmart Inc (WMT)

Liquidity ratios

Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021
Current ratio 0.82 0.83 0.82 0.93 0.97
Quick ratio 0.09 0.11 0.10 0.17 0.19
Cash ratio 0.09 0.11 0.10 0.17 0.19

Based on the provided data for Walmart Inc, the liquidity ratios show a concerning trend over the past five years.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term obligations with its current assets. Walmart Inc's current ratio has been decreasing from 0.97 in January 31, 2021, to 0.82 in January 31, 2025. This indicates that the company may have difficulties in meeting its short-term obligations as its current assets are decreasing relative to current liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Walmart Inc's quick ratio has also shown a downward trend, decreasing from 0.19 in January 31, 2021, to 0.09 in January 31, 2025. This suggests that the company may struggle to meet its short-term obligations using its most liquid assets.

3. Cash Ratio: The cash ratio is the most conservative liquidity ratio, focusing solely on the cash and cash equivalents available to cover current liabilities. Walmart Inc's cash ratio has also decreased from 0.19 in January 31, 2021, to 0.09 in January 31, 2025, indicating a decrease in the company's ability to meet short-term obligations using its cash reserves.

Overall, the declining trend in Walmart Inc's liquidity ratios over the past five years raises concerns about the company's ability to efficiently manage its short-term obligations and maintain financial stability. Further analysis and monitoring of these ratios are recommended to assess the company's liquidity position accurately.


See also:

Walmart Inc Liquidity Ratios


Additional liquidity measure

Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021
Cash conversion cycle days 40.25 40.88 44.53 48.08 39.03

The cash conversion cycle for Walmart Inc has shown some fluctuations over the past five years. In January 2021, the company's cash conversion cycle was 39.03 days, indicating that it took approximately 39 days for Walmart to convert its investments in inventory back into cash.

Subsequently, by January 2022, the cash conversion cycle had increased to 48.08 days, suggesting a lengthening of the time taken by Walmart to receive cash from the sale of its inventory. This may indicate potential issues with inventory management or collection procedures.

In January 2023, the cash conversion cycle decreased to 44.53 days, indicating a slight improvement in the company's efficiency in converting inventory into cash. However, the cycle remained higher than the level observed in 2021.

By January 2024, Walmart managed to further reduce its cash conversion cycle to 40.88 days, showing a positive trend towards quicker conversion of inventory into cash.

In January 2025, the cash conversion cycle slightly improved to 40.25 days, indicating that Walmart continued to enhance its operational efficiency in managing inventory and cash flow.

Overall, while the cash conversion cycle for Walmart has shown some fluctuations over the five-year period, the company has made efforts to optimize its working capital management. Maintaining a healthy cash conversion cycle is crucial for ensuring the company's liquidity and operational effectiveness.