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Wal-Mart Stores Inc  (NYSE:WMT) Return-on-Tangible-Asset: 6.34% (As of Jul. 2017)

Return on tangible assets is calculated as Net Income divided by its average total tangible assets. Total tangible assets equals to Total Assets minus Intangible Assets. Wal-Mart Stores Inc's annualized Net Income for the quarter that ended in Jul. 2017 was $11,596 Mil. Wal-Mart Stores Inc's average total tangible assets for the quarter that ended in Jul. 2017 was $182,836 Mil. Therefore, Wal-Mart Stores Inc's annualized return on tangible assests (ROTA) for the quarter that ended in Jul. 2017 was 6.34%.

NYSE:WMT' s Return-on-Tangible-Asset Range Over the Past 10 Years
Min: 6.93   Max: 10.3
Current: 6.93

6.93
10.3

During the past 13 years, Wal-Mart Stores Inc's highest Return on Tangible Assets (ROTA) was 10.30%. The lowest was 6.93%. And the median was 8.99%.

NYSE:WMT's Return-on-Tangible-Asset is ranked higher than
76% of the 368 Companies
in the Global industry.

( Industry Median: 3.90 vs. NYSE:WMT: 6.93 )

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Wal-Mart Stores Inc Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
Return-on-Tangible-Asset Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 9.57 8.71 8.83 7.98 7.48

Wal-Mart Stores Inc Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
Return-on-Tangible-Asset Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.30 6.55 8.10 6.68 6.34

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Wal-Mart Stores Inc's annualized Return on Tangible Assets (ROTA) for the fiscal year that ended in Jan. 2017 is calculated as:

ROTA=Net Income/( (Total Tangible Assets+Total Tangible Assets)/ 2 )
(A: Jan. 2017 )  (A: Jan. 2016 )(A: Jan. 2017 )
=Net Income/( (Total Assets - Intangible Assets+Total Assets - Intangible Assets)/ 2 )
(A: Jan. 2017 )  (A: Jan. 2016 )(A: Jan. 2017 )
=13643/( (182886+181788)/ 2 )
=13643/182337
=7.48 %

Wal-Mart Stores Inc's annualized Return on Tangible Assets (ROTA) for the quarter that ended in Jul. 2017 is calculated as:

ROTA=Net Income/( (Total Tangible Assets+Total Tangible Assets)/ 2 )
(Q: Jul. 2017 )  (Q: Apr. 20 )(Q: Jul. 2017 )
=Net Income/( (Total Assets - Intangible Assets+Total Assets - Intangible Assets)/ 2 )
(Q: Jul. 2017 )  (Q: Apr. 20 )(Q: Jul. 2017 )
=11596/( (182143+183529)/ 2 )
=11596/182836
=6.34 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

In the calculation of annual return on tangible assets, the net income of the last fiscal year and the average total tangible assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Jul. 2017) net income data.


Explanation

Return on tangible assets (ROTA) measures the rate of return on the average total tangible assets (total assets minus intangible assets). Tangible means physical in nature. Intangible Assets are assets that are not physical in nature, and typically "derive their value from legal or intellectual rights." ROTA measures a firm's efficiency at generating profits from its tangible assets. ROTA shows how well a company uses what it has to generate earnings. ROTAs can vary drastically across industries. Therefore, return on tangible assets should not be used to compare companies in different industries.


Be Aware

Like ROE and ROA, ROTA is calculated with only 12 months data. Fluctuations in the company’s earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROTA can be affected by events such as stock buyback or issuance, and by a company’s tax rate and its interest payment. ROTA may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROTA may indicate vulnerability in the durability of the competitive advantage.


Related Terms


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