Walmart debt to asset ratio. A Look Into Walmart's Debt 2022-11-04
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The debt to asset ratio is a financial ratio that measures the proportion of a company's assets that are financed through debt. It is calculated by dividing the total debt of a company by its total assets. A high debt to asset ratio indicates that a significant portion of the company's assets are financed through debt, which can increase the risk for the company and its shareholders. On the other hand, a low debt to asset ratio indicates that the company has a stronger financial position, as a greater proportion of its assets are financed through equity.
As of 2021, Walmart, one of the largest retail companies in the world, had a debt to asset ratio of 0.35. This indicates that 35% of Walmart's assets are financed through debt, while the remaining 65% is financed through equity. This is considered a relatively low debt to asset ratio, as it indicates that Walmart has a strong financial position and is not heavily reliant on debt to finance its operations and growth.
One of the reasons for Walmart's low debt to asset ratio is its strong financial performance and profitability. The company has consistently generated high levels of revenue and profit, which has allowed it to pay off its debt and maintain a strong balance sheet. In addition, Walmart has a diversified business model, with operations in multiple countries and sectors, which helps to mitigate risk and maintain a stable financial position.
Another factor that may contribute to Walmart's low debt to asset ratio is its conservative financial strategy. The company has a history of taking a cautious approach to borrowing and debt, and has often prioritized paying off debt and maintaining a strong balance sheet over aggressive expansion or acquisitions. This approach has helped Walmart to maintain a strong credit rating and access to low-cost debt financing, which in turn has allowed it to fund its operations and growth without taking on too much risk.
In conclusion, Walmart's debt to asset ratio of 0.35 is considered low, and reflects the company's strong financial position and conservative financial strategy. This has allowed Walmart to maintain a stable and profitable business, and has helped to mitigate risk for its shareholders.
It represents the proportion or the percentage of assets that are financed by interest bearing liabilities, as opposed to being funded by suppliers or shareholders. However, note that the debt-to-equity ratio is a starting point for analysis and is just one of the indicators of risk taken via credit by a company. A valid critique of this ratio is that the proportion of assets financed by non-financial liabilities accounts payable in the above example, but also things like taxes or wages payable are not considered. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. FactSet a does not make any express or implied warranties of any kind regarding the data, including, without limitation, any warranty of merchantability or fitness for a particular purpose or use; and b shall not be liable for any errors, incompleteness, interruption or delay, action taken in reliance on any data, or for any damages resulting therefrom. Do not forget to leave your feedback.
Backlinks from other websites are the lifeblood of our site and a primary source of new traffic. Data may be intentionally delayed pursuant to supplier requirements. Target had a cash flow-to-debt ratio of 0. Looking for stocks with low debt-to-equity ratios? Why Investors Look At Debt? Just like in the previous section, the below table also includes an exclusive column to display the change in values between successive quarters. Sources: FactSet, Tullett Prebon Currencies: Currency quotes are updated in real-time. A company with a lower proportion of debt as a funding source is said to have low leverage.
This is a healthy figure that has remained remarkably steady over the past decade. We are constantly upgrading and updating our reports section. As the debt-ratio increases, so the does the risk of defaulting on loans, if interest rates were to increase. In this case, that yields a debt to asset ratio of 0. Quarter-Year Debt-to-Equity Ratio Ratio-change From Lowest Value Q3-2018 0.
Source: FactSet Markets Diary: Data on U. Feel free to access them. And while not all liabilities are funded debt, the equation does imply that all assets are funded either by debt or by equity. Current debt is the portion of a company's debt which is due within 1 year, while long-term debt is the portion due in more than 1 year. In order to calculate the debt to asset ratio, we would add all funded debt together in the numerator: 18,061 + 66,166 + 27,569 , then divide it by the total assets of 193,122. Total debt equals current debt plus long-term debt minus cash equivalents. Overview page represent trading in all U.
Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Reviewed by What is the Debt to Asset Ratio? Sources: FactSet, Dow Jones Bonds: Bond quotes are updated in real-time. Intuitively, such companies cannot be compared to other companies in industries that have a comparable funded debt to asset ratio, but where the assets are mostly held in intangible forms goodwill, trademarks, patents, etc. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations. It indicates the company is using more debt than equity to finance asset purchases, but its debt management practices have not wavered for several years, and the company refrained from using excess debt even during an economically turbulent period. Backlinks from other websites are the lifeblood of our site and a primary source of new traffic.
Let's define some of the terms we used in the paragraph above. Debt to Asset Ratio Explained Of all the leverage ratios used by the analyst community to understand the financial position of a company, debt to assets tends to be one of the less common ones. Note that the below graph uses a line instead of bars due to readability concerns due to the closeness of the values. Generally speaking, a debt-ratio more than one means that a large portion of debt is funded by assets. Fundamental company data and analyst estimates provided by FactSet. Netcials reports section helps you with deep insights into the performance of various assets over the years. Important Considerations about the Debt to Asset Ratio There is no perfect score or ideal debt to asset ratio.
A company with a higher proportion of debt as a funding source is said to have high leverage. In the above-noted example, 57. Change value during the period between open outcry settle and the commencement of the next day's trading is calculated as the difference between the last trade and the prior day's settle. This measure is best calculated using full-year data. The metric in essence helps you know the part of the debt that shareholders equity can finance. Quarter-Year Debt-to-Equity Ratio Ratio-change From Previous Quarter Q2-2012 0.
Check out Benzinga Pro, a market research platform which provides investors with near-instantaneous access to dozens of stock metrics - including debt-to-equity ratio. Sources: CoinDesk Bitcoin , Kraken all other cryptocurrencies Calendars and Economy: 'Actual' numbers are added to the table after economic reports are released. Through innovation, it strives to continuously improve a customer-centric experience that seamlessly integrates its eCommerce and retail stores in an omni-channel offering that saves time for customers. Year Debt-to-Equity Ratio Ratio-change From Previous Year 2012 0. This ratio is sometimes expressed as a percentage so multiplied by 100. Please check your download folder.
The year-on-year change in values is shown in the final column. Just like the previous section, you will first see a graph followed by a table. It maintains principal offices in Bentonville, Arkansas. As you may know, the debt to equity metric is a useful value to assess the risk profile of a company. Cash equivalents include cash and any liquid securities with maturity periods of 90 days or less. This would be unsustainable over long periods of time as the firm would likely face solvency issues and risk triggering an event of default.
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