Walmart Inc. (WMT) — Fiscal 2025 Financial Scorecard & Ratio Deep-Dive

Opening snapshot: revenue up, margins inch higher and cash flow shows divergence#

Walmart [WMT] closed fiscal 2025 with $680.99B in revenue — a +5.07% year‑over‑year increase versus FY2024 — and reported operating income of $29.35B and net income of $19.44B (FY2025 filings, filed 2025-03-14). That topline advance came with modest margin improvement: gross margin ticked to 24.85% and operating margin to 4.31%, but the cash-flow picture is mixed. Operating cash flow expanded to $36.44B, yet free cash flow declined to $12.66B as capital expenditures rose to $23.78B (FY2025 cash‑flow statement, filed 2025-03-14). These core facts frame the analysis below: steady revenue and margin improvements, rising investment intensity, and cash-flow variability that matters for capital allocation and shareholder distributions.

Income-statement trends: steady revenue base, margin stabilization and outsized net income growth#

Over the four-year window FY2022–FY2025, Walmart's revenue expanded from $572.75B to $680.99B. Growth accelerated in earlier years and moderated to +5.07% in FY2025 after +6.03% in FY2024 and +6.73% in FY2023 (income statements, filings 2022–2025). The pattern is one of large-scale, consistent top‑line growth as volume and assortment gains outweigh slower macro cycles.

Gross profit rose from $143.75B in FY2022 to $169.23B in FY2025, pushing the gross margin from 25.10% (FY2022) to 24.85% (FY2025). The change is modest: FY2025 gross margin is -0.25 percentage points versus FY2022 but +0.47 percentage points versus FY2024. Operating income climbed to $29.35B in FY2025, lifting the operating margin to 4.31%, a +0.14 percentage point improvement year‑over‑year. Net income expanded faster than revenue, rising +25.33% from $15.51B in FY2024 to $19.44B in FY2025, which pushed the net margin to 2.85% from 2.39% the prior year.

Table 1 summarizes the key income-statement items and year‑over‑year change rates (we calculate growth rates directly from the reported figures).

Two observations stand out from the income statement. First, the business scales: absolute dollars in gross profit and operating income moved meaningfully higher, reflecting both volume and modest mix improvements. Second, net income growth notably outpaced revenue growth in FY2025, driven by a larger increase in operating income and what appears to be a relatively stable effective tax rate (income before tax $26.31B versus net income $19.44B in FY2025). The combination of modest margin expansion and higher operating leverage produced the outsized net-income gain.

Cash-flow quality: robust operating cash but weaker free cash flow from elevated capex#

Walmart generated $36.44B in net cash provided by operating activities in FY2025 while free cash flow fell to $12.66B due to higher capital expenditures of $23.78B (cash‑flow statement, filed 2025-03-14). The company’s operating cash flow exceeded reported net income, producing an operating-cash-to-net‑income ratio of +187.51% (36.44 / 19.44). That ratio signals strong cash conversion at the operating level: the business generated nearly twice the accounting profit in operating cash.

However, free cash flow weakened -16.28% year‑over‑year (from $15.12B in FY2024 to $12.66B in FY2025) because capex rose +15.38% (from $20.61B to $23.78B). The rise in capex is material: capex represented 3.49% of revenue in FY2025 (23.78 / 680.99), up from 3.18% in FY2024. Part of the increased investment is consistent with store‑and‑logistics modernization and digital fulfillment capacity expansions industrywide; nonetheless, the cash available for discretionary uses (debt paydown, buybacks, or materially larger dividends) declined.

Free cash flow conversion — free cash flow as a share of net income — stood at 65.15% in FY2025, down from a stronger conversion in prior periods. Dividend cash outlays were $6.69B and common stock repurchases were $4.49B in FY2025; combined, shareholder distributions and buybacks totaled $11.18B, leaving a relatively thin margin above distributions from free cash flow. Notably, net cash used in financing activities was $14.82B, reflecting this distribution activity and other financing movements. These are cash‑flow realities that constrain optional capital flexibility unless operating cash continues to track above accounting net income and free cash flow recovers.

Table 2 isolates cash-flow dynamics and cash-conversion metrics we calculated.

There are a few internal data discrepancies worth noting. The cash-flow table records a net income of $20.16B in the cash-flow line (FY2025), while the income-statement section reports $19.44B. Additionally, the balance sheet lists cash and cash equivalents of $9.04B, whereas the cash‑flow statement lists cash at end of period as $9.54B. These deltas (~$0.7B and ~$0.5B respectively) are small relative to Walmart’s scale but must be flagged. For the purposes of ratio calculations and trend analysis, this report uses the income-statement net income and balance-sheet cash/equivalents as primary anchors and highlights where cash-flow items deviate.

Balance-sheet changes: modest asset growth, equity expansion and controlled net leverage#

Walmart's total assets increased to $260.82B in FY2025 from $252.40B in FY2024, a +3.36% rise. Total liabilities were essentially flat at $163.13B versus $161.83B, a +0.80% change. The notable movement was equity: total stockholders’ equity rose from $83.86B to $91.01B, an +8.57% increase. That equity expansion -- in the face of only modest liability growth -- improved the balance-sheet solvency picture.

Total debt edged lower to $60.11B from $61.32B (FY2024), while net debt (total debt less cash) held around $51.08B. The combination of modest debt reduction and higher equity reduced leverage measures. Current assets totaled $79.46B against current liabilities of $96.58B, yielding a calculated current ratio of 0.82x for FY2025. That ratio indicates a historically typical low‑current‑ratio retail structure (inventory plays a major role in working-capital dynamics) and a reliance on fast inventory turnover rather than large current asset cushions.

One other balance-sheet signal: property, plant and equipment net rose to $139.70B from $130.34B, reflecting ongoing store and logistics investments. Goodwill and intangible assets remained stable at about $28.79B, indicating limited large-scale acquisitions in FY2025.

Key ratio calculations (computed from the raw financials)#

All ratios below are calculated directly from the reported FY2025 figures in the financial tables unless otherwise noted.

• Price/Earnings (PE): Price per share (quote $100.48) divided by EPS ($2.34) = 42.95x. This matches the elevated PE multiple reported in market data and reflects heavy premium expectations baked into the equity price.

• Price/Sales (P/S): Market capitalization ($801.865B per latest quote) / Revenue ($680.99B) = 1.18x.

• Price/Book (P/B): Market cap / Total equity (801.865 / 91.01) = 8.81x.

• Enterprise Value / EBITDA (EV/EBITDA): EV = market cap + total debt – cash = 801.865 + 60.11 – 9.04 = $852.94B. EV/EBITDA = 852.94 / 42.01 = 20.31x.

• Net Debt / EBITDA: Net debt (51.08) / EBITDA (42.01) = 1.22x.

• Debt / Equity: Total debt (60.11) / Total equity (91.01) = 0.66x (or 66.09%).

• Current ratio: Current assets (79.46) / Current liabilities (96.58) = 0.82x.

• Return on equity (ROE): Net income (19.44) / Average equity — here using year-end equity as proxy (91.01) = 21.36%. (Using a year-average equity figure would moderate this slightly; this simple ratio shows strong ROE driven by operating leverage.)

• Return on invested capital (ROIC): calculation depends on invested‑capital definition. If we use operating income after tax (NOPAT) divided by capital employed (total assets minus current liabilities), then NOPAT = operating income (29.35) * (1 – effective tax rate). Using FY2025 income‑before‑tax (26.31) and net income (19.44) yields an implied tax rate ≈ 26.12% (6.87 / 26.31). NOPAT ≈ 29.35 * (1 – 0.2612) = $21.67B. Capital employed = total assets (260.82) – current liabilities (96.58) = $164.24B. ROIC = 21.67 / 164.24 = 13.20%. If instead capital employed is equity + debt – cash (91.01 + 60.11 – 9.04 = 142.08), ROIC = 21.67 / 142.08 = 15.26%. The choice of denominator matters; both figures show a mid‑teens ROIC, indicating productive capital deployment.

• Free cash flow margin: FCF / Revenue = 12.66 / 680.99 = 1.86%.

• Operating cash flow margin: OCF / Revenue = 36.44 / 680.99 = 5.35%.

• Dividend yield (trailing): Dividend per share $0.885 / price $100.85 = 0.88% (consistent with the dataset's dividend yield figure). Cash dividend payout (dividends paid/net income) = 6.69 / 19.44 = 34.40%.

These ratios collectively portray a large, efficiently run retailer with conservative net leverage, strong returns on capital and a valuation that prices meaningful ongoing growth and margin stability.

What the numbers reveal (stripping away narrative spin)#

The facts embedded in the financials point to a handful of clear, data‑driven conclusions. First, Walmart remains a massive, growing revenue machine: FY2025 revenue of $680.99B is incremental evidence that the company still expands through volume and assortment. Margin trends — modest gross‑ and operating‑margin expansion year‑over‑year — show the retailer achieving some benefit from scale and category mix.

Second, cash generation at the operating level is robust. Operating cash of $36.44B materially exceeds accounting net income, indicating strong working‑capital discipline and depreciation/amortization addbacks. That said, elevated capex has pulled down free cash flow; FCF fell -16.28% even though operating cash was broadly stable. The higher capex profile reduces the immediate fungibility of operating cash for buybacks or large step‑ups in discretionary distributions.

Third, the balance sheet exhibits conservative net leverage. Net debt/EBITDA at 1.22x and debt/equity at 0.66x imply ample headroom to absorb short‑term shocks or to fund opportunistic investments. Equity growth and stable liabilities also show the balance sheet strengthening slightly year‑over‑year.

Fourth, valuation multiples remain demanding. A PE near 42.95x and EV/EBITDA of 20.31x mean the market is pricing a premium on Walmart’s ongoing earnings growth and defensive retail positioning. High multiples reduce margin for error: execution missteps or delays in extracting productivity from investments would be visible in valuation-sensitive metrics.

Finally, the company’s capital allocation mix shifted modestly in FY2025: dividends remained sizable at $6.69B, share repurchases were moderate at $4.49B, and capex rose materially. The net effect is a lower free cash flow cushion after shareholder distributions, leaving only about $1.49B of residual free cash flow once dividends and buybacks are subtracted (12.66 – 6.69 – 4.49 = 1.48 — rounding differences apply). That small residual underscores that additional share repurchases or materially higher dividends would be constrained absent improved free cash flow or reduced capex.

Historical context and pattern recognition#

Viewed over the FY2022–FY2025 period, Walmart shows persistent revenue growth and an improving bottom line. Net income progression from $11.68B (FY2023) to $19.44B (FY2025) demonstrates the company’s capacity to convert scale into profit. Capital spending has trended up — capex rose from $13.11B in FY2022 to $23.78B in FY2025 — consistent with a multi‑year investment cycle into stores, automation and logistics. The current pattern signals a phase where operating cash is strong but investments temporarily compress free cash available for non‑operational initiatives.

Short featured summary (40–60 words)#

Walmart reported $680.99B in FY2025 revenue (+5.07%), delivered strong operating cash ($36.44B) but saw free cash fall to $12.66B as capex rose to $23.78B. Net‑debt leverage is modest (net debt/EBITDA 1.22x), while valuation multiples remain elevated (PE 42.95x, EV/EBITDA 20.31x).

What this means for investors (data-only implications)#

The financials signal a company that is financially healthy, generating strong operating cash and sustaining mid‑single‑digit revenue growth at scale. However, elevated capital investments have compressed free cash flow and left limited excess cash after shareholder distributions. The conservative net leverage gives management optionality to fund growth or navigate shocks, but the current high valuation implies that markets expect continued margin stability and execution on investments. In simple terms: Walmart has the cash engine and balance-sheet room to invest, but the immediate free‑cash cushion for expanding shareholder returns is reduced until investments convert into improved FCF.

Closing synthesis and measurable forward focus#

Three measurable indicators will determine whether FY2025’s pattern is temporary or structural. First, monitor free cash flow trajectory relative to capex: will FCF recover as capital projects mature? Second, track operating margin progression: even a 10–50 basis‑point swing materially affects net income at Walmart’s scale. Third, watch net debt/EBITDA and buyback pace: sustained repurchases would consume limited residual free cash unless operating cash strengthens further.

This analysis is grounded entirely in Walmart's FY2022–FY2025 raw financials (income statements, balance sheets and cash-flow statements filed in 2022–2025). All ratios and growth rates above were calculated from those reported figures. The numbers show a company executing large investments while still generating strong operating cash and high returns on capital — a profile that supports strategic flexibility but tightens the short‑term cash margin for additional shareholder distributions given the current investment cadence.

Appendix: selected calculation notes and data anchors#

All base figures are drawn from Walmart's FY financial tables for the years ending 2022–2025 (filings dated 2022‑03‑18, 2023‑03‑17, 2024‑03‑15 and 2025‑03‑14). Where the financial tables showed small internal inconsistencies (cash at period end and cash‑flow net income versus income‑statement net income), this report highlighted the deltas and used the income‑statement net‑income and balance‑sheet cash figures as primary anchors for ratio computation. Specific calculation methods (e.g., ROIC NOPAT definition and capital‑employed alternatives) were disclosed where they materially affect the resulting percentage.