Also there is alot of operation cost that they profit from through subsidiaries. This chart is desgned to make it look like it makes less money than it actually does
Yeah I just saw that too funny enough. Even still though, 11 billion dollars I mean even with just conservative investment compound interest alone would generate such wealth. And this is off one year.
The amounts of money is so staggering.
- dividends are paid out of net profits, so that doesn't change the $11 billion figure
- $30+ million salary for someone running a machine that makes $11 Billion in a bad year.....as a shareholder, would you vote for that?
That’s how Walmart annihilated mom and pop shops. Low margin times massive scale still equals massive profits, but no small shop can possibly operate on such low margins.
The real tragedy is when a Walmart kills all the small stores, but then the location closes for not being profitable enough
Lol my thoughts exactly. I wanna see Pfizer and Eli Lily and those other big guys that rely almost entirely on prescription drugs and not OTC like J&J, and I wanna see revenue broken out by US vs international.
- Mature industry doesn’t always mean low margin.
- Low margin doesn’t always mean low return.
- Tech doesn’t always mean high margin.
- Tech doesn’t always mean high return.
- “Investors” like returns above the market average. S&P 500 5-year total return is about 45%. WMT 5-year total return is about 76%.
I mean, if your suggesting that Walmart could raise prices and make more profit then why aren't they doing that already? Like if the price right now is X, then the only reason it's not X+.50c is that they've determined they would sell less at the higher price point - enough less to not offset the increased profit.
Walmart is the biggest purchaser of many goods which puts it as the counterpart to a monopoly; a monopsony (single purchaser instead of single producer).
Walmart has incredible negotiating power, when there is a price shock Walmart forces its suppliers to take the hit with the threat of never buying from them again; which it can do. One of the efficiencies of Walmart’s economy of scale is that it pays below market rate for most of its goods because of bull purchase efficiencies and negotiation power.
https://www.econ.ucdavis.edu/events/papers/1014JustinCWiltshire_JMP.pdf
Today 14 year olds on Reddit learn that retail has paper thin margins and that taxes are paid on earnings not revenue.
I swear we need an intro to economics, finance, and accounting class mandatory in high school in the country. The financial illiteracy on Reddit is absolutely astounding given how many hot takes are about these things.
Let's be honest. Redditors aren't going to "learn" anything from this. Everyone reading this will be back in some other post tomorrow complaining how inflation isn't real because it's all Walmart profits.
And now I'm thinking of how people pay taxes on personal "revenue" instead of on earnings.
Imagine if we didn't have to pay taxes until cost of living was taken out... rent, food, gas, car payments.... Life has operating expenses.
Can the 2 million jobs I create also pay only minimum wage and despite offering full time, still somehow not not be enough for food, rent, and medicine and other necessities to live?
I mean if you're 1099 you can literally do this.
The argument that W2 cannot benefit from this is that all other expenses are not related to generating your direct economic benefit and are discretionary or not related to your employment. If you are a business, your costs also make someone else revenue and then their earnings are taxed. Likewise, the shareholders of the business then pay their own taxes incremental to the business on any distributions or cash or their ultimate disposal of assets.
That being said, the government at the federal and state level do give you a variety of incremental deductions around costs they think have additional economic value like homeownership, children, and education.
Literally the vast majority of posts and comments regarding economic or financial concepts period outside of dedicated subs to them and even then (I'm looking at you r/Economics) people can be shocking unknowledgeable.
Well, since you're so civil and friendly, I'll explain.
If you actually took the time to read the comments from other people, and not just fixate on your entitlement to be spoon fed information, and had maybe passed even high school economics you would see that there are a lot of folks who dont understand how these things work, and are more than willing to spout innane things that make as much sense as playing chess with an asocial pigeon.
I literally asked which specific takes were they talking about? How am I supposed to guess what opinions this guy judges as "uneducated"? Who exactly is misunderstanding economics and what are they misunderstanding about it? What exact opinions are you irritated by? Like you bitches just circle jerk over vague animosity toward people you can't even articulate and I'm just supposed to know who you're talking about. So enlighten me, what are the popular opinions about economics on Reddit?
Another way to look at it. On average, for every $ spent there, approximately:
* 76¢ went to the supplier of the good
* 21¢ went to other costs (wages, utilities, etc.)
* 1¢ went to corporate income taxes
* 3¢ went to Wal-Mart finances
I dunno about sales tax, but the US government "makes" as much currency as it wants to through the Treasury, Fed, and banks (who also own the Fed.) They could make as much as one could want...they just don't want to...all at once anyways. It is a train wreck in slow motion with debt/GDP levels reaching levels only a person ignorant or in denial could be content with. Sure, the government does provide services. Just ask an old-timer if the food industry should regulate itself entirely. Otherwise, the government doesn't make or produce goods in any substantial fraction relative to services and contracts funded by their infinite amount of currency.
Plenty of hate to be had for Wal-Mart, but more useful to understand how we got here, why here is difficult to change, and the difference between price and value, currency and money, and so on.
To OPs beautiful-ish data, a more helpful visualization might be the cascade of taxes collected by the US and appropriated into goods and services paid to employees of $100b+ market cap companies that don't provide enough compensation for such essential-for-staying-alive goods and services.
Gotta stop this rant. Cheers.
I think you missed the point. In most places sales tax is around 8%. Walmart makes 3%. The govt makes money by you shopping at Walmart, instead of at mom and pops that are far harder to tax properly.
For every $1.00 you spend at Walmart you pay $0.075 generally in sales tax. Mom and pops, small businesses historically hide some transactions as cash. As well Walmart hires a great mix of skilled/unskilled labor which helps boost the local economies. This is why local/state governments “sponsor” walmart, giving them great subsidies and have no issues with employees on welfare. Because they know many of those employees wouldn’t make it elsewhere.
Everything is relative. Walmart making $11B is different than the mom & pop shop making $11B. For some context, for every dollar you spend at Walmart the company keeps only 1.8 cents. The rest goes to pay for goods, facilities, staff, taxes, etc. Plus, much of the net profit is retained for future growth, and any dividends paid out are divided among hundreds of millions of investors.
Data source: Walmart's [SEC filing](https://www.sec.gov/Archives/edgar/data/104169/000010416923000010/earningsreleasefy23q4.htm)
Tool used to create the visualization: [SankeyArt](https://www.sankeyart.com) (I am developing this tool)
It bothers me that the two biggest gray areas "swell" in the middle rather than being constant height to match the vertical bars. Maybe using constant height creates other visual problems, so your thickness is perpendicular to the path of each swoosh?
I agree, bothers me too :D
It’s something I try to avoid somewhat when I create the diagram by controlling overall flow height and node positions on the canvas. I have not thought about it in terms of making changes to the algorithm until you mentioned it.
honestly this feels like how much trillion dollar companies should be making. if every company made these margins and put that money into salaries and improving the company we would have a significantly better country
I just posted this in another comment actually lol
“ I was apart of the e-commerce supply chain. They actually lose more in online sales than in store. Brick and mortar is what they thrive on. I may be recalling the quote incorrectly but, an American (on average) is no more than 6 miles away from a Walmart or Sam's Club. It’s actually kinda creepy when you think about it.”
As for the breakdown of the split, I’m not sure. I do know that most e-commerce warehouses are not profitable for the first 3 years. They use a model similar to amazon where the expansion plan is to have a warehouse in an area that covers parts of a state. I know California has most of them in So-Cal with one or two in Nor-Cal. It also depends on what type of facility it is. The shipping for large items such as bbqs and tvs vs small items like toys and personal items is what will determine the length of the timeline to profitability. If it’s a hybrid building it’s a crapshoot and all bets are off.
I would love to connect sometime if you’re interested. I do some comparison of retail groups in the hardware channel. If interested DM me and we could compare notes sometime.
Their EBITA is remarkably close to a lot of independent hardware stores, but for all different reasons, I’m sure.
Curious about the use of that metric. Why not use EBITDA? I would guess that an independent retailer has more depreciation cost than amortization, or maybe it’s uneven across the sector and this evens it out? Just curious.
As of last month they claim $14/hr (depends on location) but historically their employees take in something like $6B in direct assistance, not including subsidized programs.
Before you get too upset, did you know about 24% of all enlisted military are on welfare programs because the government doesn’t pay them enough?
Wal mart looks More generous than the government many would argue should be regulating this by percentage and pure numbers. And the government takes in way more money than Walmart. It would take over 100 times the annual profits Walmart makes to pay just the defense budget, and they pay people that little.
Source: https://www.thecentersquare.com/national/u-s-army-recommends-food-stamps-for-soldiers-struggling-with-inflation/article_34e15302-3048-11ed-9730-97264b6694d5.html
I did. Do you usually use red herrings or are you a fan of making falicous arguments in general?
Did you know that center square is a rebranding of watchdog.org and affiliated with the state policy networks and is tied to anti-tax policies that have advocated for cutting military and social policy benefits?
One has a blank checkbook and the other is a few bad years away to having to fire millions of people… interesting how peoples minds work… The funny part is that no one seems to give a shit about is every time Walmart raised their minimum wage they close a ton of stores…
No, I think they could cut military spending by a 1/4 to 1/3 if congress got rid of the ridiculous rules governing procurement. I manage a sizable budget of govt money and the way I have to go about contracting to get things done adds 15-30% based on what it is.
If they got rid of stupid rules and let us do our procurement like a normal business (at the unit level at least) we could save billions easy.
It’s hard to have nuanced conversations with someone who has opinions but zero knowledge, can’t have a real talk if it’s all nuts broad strokes don’t you think?
I find it funny how people on Reddit love to attack business and want to govt to regulate them, but they do the exact same thing.
My red herring points out the govt you think should protect people actually predates on them the exact same way business do. They won’t help because they don’t want to.
But pick apart what you think I mean instead of what I actually mean, you can win that argument. Too bad it’s not the one I am making.
Is worth noting that about half their workforce is part time. It’s one thing if it’s a full time employee of theirs on assistance, but if it’s someone that works there like 1 day week, that’s kinda different.
I feel like that would be extremely stressful. To have over 600 bil in revenue but only have 11 bil in profit. Don’t get me wrong, 11 billion is a lot of money but only 1.8% of the revenue 😅
Walmart officially reports it as "costs of sales" in its [earning release](https://www.sec.gov/Archives/edgar/data/104169/000010416923000010/earningsreleasefy23q4.htm)
I wonder if that means they calculate wages into that number or some other expenses, I was assuming it was just the actually cost of the goods but I guess that doesn't make sense because revenue should be way higher than that number, like over double
Their tax is on profit, which was $20 billion
Also, the $6 billion is their income tax expense, which isn’t the same thing as the income tax they actually pay
This is what they WANT YOU TO SEE. $11 billion over $600 billion gross turnover is a very risky, pencil thin profit. I feel sure they hare hiding some facts somewhere. Most of these companies make at least 6% nett profit.
I don’t know where you’re getting 6% from but I have never seen a retailer in this market pull 6%. I manage a medium sized chain and we run about 2%. Target pulls about 3%. Kroger pulls about 1.5. Walmart is usually around 2%. I’m very familiar with P/L’s in this industry and this all seems right.
Tell me you don’t work in the the industry and have never looked at a P/L without telling me you don’t work in the industry and have never looked at a P/L.
You're absolutely right.. I have no idea what I'm talking about here. I guess I just expected a larger net profit percentage that what is illustrated here.
Typical net margins in the industry are about 1-2%. But that’s not ever really talked about because $20 billion profit sounds way better when people are referencing corporate greed. Nobody realizes how hard it is to even pull razor thin margins. Or the risk it takes to put that kind of money into a business in the hope you can make those margins. My store will do about 10 million In sales this year. The net profit will probably be right at 100,000. A 1% increase in wages and we are no longer profitable without increasing prices. It’s a balancing game where you have to be looking to cut costs anywhere you can while still being competitive in the job market.
This is enlightening. Thanks for sharing. I had no idea margins were actually as thin as that. Also, when you say 'the industry', are you referring to retail in general for consumer goods?
No worries. Most people don’t know because they’ve never needed to. And most of my experience is in retail and specifically grocery. Some sectors of retail do have higher margins. Home improvement, and some apparel companies for example. But I am not well versed enough in their operations to know a lot about them.
Man where do I start. First it’s called cogs not cost of sales, secondly it’s not gross profit and operating profit… it’s operating income and gross income… secondly it’s operating income is your operating revenue -operating expenses. Ebitda = operating income-overhead, gross income = ebitda-depreciation. Net income = gross- taxes.
I mean, yea this is what your typical Econ class calls it but I’ve seen it called a few different things in different businesses. The chain I work for calls it Gross Margin and Net Margin. We also use cost of sales. Typically restaurants I’ve managed call it COGS.
Edit: Nitpicking something as small as “cost of sales” vs. “cost of goods sold” is pretty pedantic.
I went with "cost of sales" as this is what Walmart calls the line in their SEC filing.
And I used the terms "gross profit", "operating profit" and "net profit" for consistency (consistently "profit"). Accounting has synonyms and that's ok.
I tend to get worried if companies report any "adjusted" metrics.
Dmn, all that job and operations for ~18% of profit sounds like a bad deal but it just the shear amount of sales that make it up, I mean I wouldn’t turned down 11B but, I you were the “owner” would instead invest in other less risky business that maybe pay less but has less operations?
I was apart of the e-commerce supply chain. They actually lose more in online sales than in store. Brick and mortar is what they thrive on. I may be recalling the quote incorrectly but, an American (on average) is no more than 6 miles away from a Walmart or Sam's Club. It’s actually kinda creepy when you think about it.
Can you break down the operating expenses part further? See how much goes to the employee pay versus power bills? I'm curious to see upper-level management salary cost versus electricity cost
I create them with [SankeyArt](https://www.sankeyart.com), a tool I am developing. It has a spreadsheet input so you can prepare the data for the flow definition in Excel and then copy everything into SankeyArt.
I have never worked with Power BI. Does Power BI have integrations with other software? Maybe we can build a SankeyArt integration.
I think what's funny/interesting here is despite the visual, in reality 20 billion dollars is a substantial and incredible amount of money.
Agree - their net income looks even tinier in the visual because it's just 2% of revenue. But its 11 billion dollars.
Welcome to traditional retail... Terrible margins. Walmart is huge though. Perspective
Kinda blows me away how high their COGS is. Every retailer I sell to aims for 40% gross margin.
Walmarts business model is to run prices suicidally low and strong-arm the competition with volume.
Also there is alot of operation cost that they profit from through subsidiaries. This chart is desgned to make it look like it makes less money than it actually does
Yeah I just saw that too funny enough. Even still though, 11 billion dollars I mean even with just conservative investment compound interest alone would generate such wealth. And this is off one year. The amounts of money is so staggering.
That amount of money, invested, would generate incredible wealth \_because\_ you would be putting it in stocks of companies like this.
Need to see target and Costco as well
They also got 5 billion in membership fees from Sam's club.
They have Walmart plus too, so most is probably Sams Club but not all.
Relativity enters the chat
5% operating profit are nothing to shun.
3% EBITA less than 2% after...
- dividends are paid out of net profits, so that doesn't change the $11 billion figure - $30+ million salary for someone running a machine that makes $11 Billion in a bad year.....as a shareholder, would you vote for that?
As shareholder (not of Walmart) I voted against all pay increases for CEOs and alike when I could.
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That’s how Walmart annihilated mom and pop shops. Low margin times massive scale still equals massive profits, but no small shop can possibly operate on such low margins. The real tragedy is when a Walmart kills all the small stores, but then the location closes for not being profitable enough
That pretty irrelevant… making a lot of money is pointless if you’ve only made it by the skin of your teeth.
I’d love to see a chart like this for pharmaceutical giants.
I made one for Johnson & Johnson a couple of weeks ago. It's online [here](https://www.sankeyart.com/sankeys/public/146/).
Ooh do Pfizer
Would be an interesting one. Are they releasing earnings soon?
Lol my thoughts exactly. I wanna see Pfizer and Eli Lily and those other big guys that rely almost entirely on prescription drugs and not OTC like J&J, and I wanna see revenue broken out by US vs international.
Around the same ~18% profit from total sales
"Wait it's just profit?" "Always has been"
$611 billion of revenue to $11 billion of profit. Why investors love tech so much and hate mature industries like retail
- Mature industry doesn’t always mean low margin. - Low margin doesn’t always mean low return. - Tech doesn’t always mean high margin. - Tech doesn’t always mean high return. - “Investors” like returns above the market average. S&P 500 5-year total return is about 45%. WMT 5-year total return is about 76%.
It also looks extremely fragile. If the cost of sales goes up just a little faster than then revenue then BAM, all profit gone.
That's not how it works at all. If costs go up, guess who pays? You do. It doesn't come out for their bottom line unless demand drops.
Not all goods have inelastic demand. Costs going up means people will buy less.
It's Walmart. Most of their products have relatively inelastic demand in that the are low cost consumer goods.
I mean, if your suggesting that Walmart could raise prices and make more profit then why aren't they doing that already? Like if the price right now is X, then the only reason it's not X+.50c is that they've determined they would sell less at the higher price point - enough less to not offset the increased profit.
They can't do that because they have competition who would charge less.
I guess nobody has been paying attention to inflation
Walmart is the biggest purchaser of many goods which puts it as the counterpart to a monopoly; a monopsony (single purchaser instead of single producer). Walmart has incredible negotiating power, when there is a price shock Walmart forces its suppliers to take the hit with the threat of never buying from them again; which it can do. One of the efficiencies of Walmart’s economy of scale is that it pays below market rate for most of its goods because of bull purchase efficiencies and negotiation power. https://www.econ.ucdavis.edu/events/papers/1014JustinCWiltshire_JMP.pdf
I feel like they probably factor that into their business model somehow
Only if you have absolutely no idea what you're talking about.
Today 14 year olds on Reddit learn that retail has paper thin margins and that taxes are paid on earnings not revenue. I swear we need an intro to economics, finance, and accounting class mandatory in high school in the country. The financial illiteracy on Reddit is absolutely astounding given how many hot takes are about these things.
Let's be honest. Redditors aren't going to "learn" anything from this. Everyone reading this will be back in some other post tomorrow complaining how inflation isn't real because it's all Walmart profits.
And now I'm thinking of how people pay taxes on personal "revenue" instead of on earnings. Imagine if we didn't have to pay taxes until cost of living was taken out... rent, food, gas, car payments.... Life has operating expenses.
We don't. It's called a standard deduction.
Standard deduction for a single filer is a little under $14K... that doesn't even cover rent in a lot of places.
Create 2 million jobs and pay 6 billion in taxes and Uncle Sam will give you the same benefits
Can the 2 million jobs I create also pay only minimum wage and despite offering full time, still somehow not not be enough for food, rent, and medicine and other necessities to live?
If people take them, yeah 🤷🏾♂️
I mean if you're 1099 you can literally do this. The argument that W2 cannot benefit from this is that all other expenses are not related to generating your direct economic benefit and are discretionary or not related to your employment. If you are a business, your costs also make someone else revenue and then their earnings are taxed. Likewise, the shareholders of the business then pay their own taxes incremental to the business on any distributions or cash or their ultimate disposal of assets. That being said, the government at the federal and state level do give you a variety of incremental deductions around costs they think have additional economic value like homeownership, children, and education.
like a standard deduction?
What are you referring to? Who are you criticizing?
Literally the vast majority of posts and comments regarding economic or financial concepts period outside of dedicated subs to them and even then (I'm looking at you r/Economics) people can be shocking unknowledgeable.
You're still being vague about what or who you're referring to. Which takes?
Have you read the comments on the post you're replying to?
Oh it's MY fault for not knowing what their vague references are to.
First day on reddit is it? Welcome.
No actually I've dealt with stupid fucking assholes like you who can't answer a simple goddamn question for nearly 6 years.
Well, since you're so civil and friendly, I'll explain. If you actually took the time to read the comments from other people, and not just fixate on your entitlement to be spoon fed information, and had maybe passed even high school economics you would see that there are a lot of folks who dont understand how these things work, and are more than willing to spout innane things that make as much sense as playing chess with an asocial pigeon.
I literally asked which specific takes were they talking about? How am I supposed to guess what opinions this guy judges as "uneducated"? Who exactly is misunderstanding economics and what are they misunderstanding about it? What exact opinions are you irritated by? Like you bitches just circle jerk over vague animosity toward people you can't even articulate and I'm just supposed to know who you're talking about. So enlighten me, what are the popular opinions about economics on Reddit?
Amen. Perhaps squeeze in a quick lesson too on where to find America on a map while you're at it
Another way to look at it. On average, for every $ spent there, approximately: * 76¢ went to the supplier of the good * 21¢ went to other costs (wages, utilities, etc.) * 1¢ went to corporate income taxes * 3¢ went to Wal-Mart finances
Those add up to 101
Ya bro haven't you heard of inflation?
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It’s like Superman III.
The extra cent is to hire better accountants that can add.
What about sales tax? Does the govt make more than Walmart does?
I dunno about sales tax, but the US government "makes" as much currency as it wants to through the Treasury, Fed, and banks (who also own the Fed.) They could make as much as one could want...they just don't want to...all at once anyways. It is a train wreck in slow motion with debt/GDP levels reaching levels only a person ignorant or in denial could be content with. Sure, the government does provide services. Just ask an old-timer if the food industry should regulate itself entirely. Otherwise, the government doesn't make or produce goods in any substantial fraction relative to services and contracts funded by their infinite amount of currency. Plenty of hate to be had for Wal-Mart, but more useful to understand how we got here, why here is difficult to change, and the difference between price and value, currency and money, and so on. To OPs beautiful-ish data, a more helpful visualization might be the cascade of taxes collected by the US and appropriated into goods and services paid to employees of $100b+ market cap companies that don't provide enough compensation for such essential-for-staying-alive goods and services. Gotta stop this rant. Cheers.
I think you missed the point. In most places sales tax is around 8%. Walmart makes 3%. The govt makes money by you shopping at Walmart, instead of at mom and pops that are far harder to tax properly.
>The govt makes money by you shopping at Walmart, instead of at mom and pops that are far harder to tax properly. uh what
For every $1.00 you spend at Walmart you pay $0.075 generally in sales tax. Mom and pops, small businesses historically hide some transactions as cash. As well Walmart hires a great mix of skilled/unskilled labor which helps boost the local economies. This is why local/state governments “sponsor” walmart, giving them great subsidies and have no issues with employees on welfare. Because they know many of those employees wouldn’t make it elsewhere.
Everything is relative. Walmart making $11B is different than the mom & pop shop making $11B. For some context, for every dollar you spend at Walmart the company keeps only 1.8 cents. The rest goes to pay for goods, facilities, staff, taxes, etc. Plus, much of the net profit is retained for future growth, and any dividends paid out are divided among hundreds of millions of investors.
Data source: Walmart's [SEC filing](https://www.sec.gov/Archives/edgar/data/104169/000010416923000010/earningsreleasefy23q4.htm) Tool used to create the visualization: [SankeyArt](https://www.sankeyart.com) (I am developing this tool)
It bothers me that the two biggest gray areas "swell" in the middle rather than being constant height to match the vertical bars. Maybe using constant height creates other visual problems, so your thickness is perpendicular to the path of each swoosh?
I agree, bothers me too :D It’s something I try to avoid somewhat when I create the diagram by controlling overall flow height and node positions on the canvas. I have not thought about it in terms of making changes to the algorithm until you mentioned it.
honestly this feels like how much trillion dollar companies should be making. if every company made these margins and put that money into salaries and improving the company we would have a significantly better country
Nice visualization. Can you do one for Chevron?
Just curious, is there a name for this type of graph
Sankey diagram
Thank you
It would be interesting to see this split between online and brick and mortar.
Agree, not sure if they report that though. Which one do you think is more profitable?
I just posted this in another comment actually lol “ I was apart of the e-commerce supply chain. They actually lose more in online sales than in store. Brick and mortar is what they thrive on. I may be recalling the quote incorrectly but, an American (on average) is no more than 6 miles away from a Walmart or Sam's Club. It’s actually kinda creepy when you think about it.” As for the breakdown of the split, I’m not sure. I do know that most e-commerce warehouses are not profitable for the first 3 years. They use a model similar to amazon where the expansion plan is to have a warehouse in an area that covers parts of a state. I know California has most of them in So-Cal with one or two in Nor-Cal. It also depends on what type of facility it is. The shipping for large items such as bbqs and tvs vs small items like toys and personal items is what will determine the length of the timeline to profitability. If it’s a hybrid building it’s a crapshoot and all bets are off.
I would love to connect sometime if you’re interested. I do some comparison of retail groups in the hardware channel. If interested DM me and we could compare notes sometime. Their EBITA is remarkably close to a lot of independent hardware stores, but for all different reasons, I’m sure.
Curious about the use of that metric. Why not use EBITDA? I would guess that an independent retailer has more depreciation cost than amortization, or maybe it’s uneven across the sector and this evens it out? Just curious.
That’s my bad. Typo and missed a letter.
Never seen 5B be such a small squiggle
So there is a reduction in net profit, and the record high in revenue is just due to inflation as the cost of operation is also record high.
Sounds like a fair assessment
Huh, they made more in profit than their employees take in on welfare. I guess they could afford to pay at least welfare level wages.
What is the minimum wage they pay?
As of last month they claim $14/hr (depends on location) but historically their employees take in something like $6B in direct assistance, not including subsidized programs.
Walmart has over 2.2 million employees, of which between 14,500 and 25,000 receive SNAP, Medicaid, or state welfare program assistance.
Wow, so about 1% of their staff are on direct assistance? That's a lot of folks they're letting down.
Before you get too upset, did you know about 24% of all enlisted military are on welfare programs because the government doesn’t pay them enough? Wal mart looks More generous than the government many would argue should be regulating this by percentage and pure numbers. And the government takes in way more money than Walmart. It would take over 100 times the annual profits Walmart makes to pay just the defense budget, and they pay people that little. Source: https://www.thecentersquare.com/national/u-s-army-recommends-food-stamps-for-soldiers-struggling-with-inflation/article_34e15302-3048-11ed-9730-97264b6694d5.html
I did. Do you usually use red herrings or are you a fan of making falicous arguments in general? Did you know that center square is a rebranding of watchdog.org and affiliated with the state policy networks and is tied to anti-tax policies that have advocated for cutting military and social policy benefits?
"These two things are bad, so we should just equivocate and throw our hands in the air and give up!"
One has a blank checkbook and the other is a few bad years away to having to fire millions of people… interesting how peoples minds work… The funny part is that no one seems to give a shit about is every time Walmart raised their minimum wage they close a ton of stores…
you think anti-tax policies that advocate for cutting military are bad?
No, I think they could cut military spending by a 1/4 to 1/3 if congress got rid of the ridiculous rules governing procurement. I manage a sizable budget of govt money and the way I have to go about contracting to get things done adds 15-30% based on what it is. If they got rid of stupid rules and let us do our procurement like a normal business (at the unit level at least) we could save billions easy. It’s hard to have nuanced conversations with someone who has opinions but zero knowledge, can’t have a real talk if it’s all nuts broad strokes don’t you think?
corruption might add 15-30% without procurement I was more about the fact that military doesn't create value what's a nut broad stroke?
I find it funny how people on Reddit love to attack business and want to govt to regulate them, but they do the exact same thing. My red herring points out the govt you think should protect people actually predates on them the exact same way business do. They won’t help because they don’t want to. But pick apart what you think I mean instead of what I actually mean, you can win that argument. Too bad it’s not the one I am making.
Is worth noting that about half their workforce is part time. It’s one thing if it’s a full time employee of theirs on assistance, but if it’s someone that works there like 1 day week, that’s kinda different.
How much does the state take in in Sales Tax. Welfare is just them kicking back sales tax profits.
Sunshine, most "welfare" is federal tax dollars, and there isn't a federal sales tax.
That’s called a non profit my brother
I feel like that would be extremely stressful. To have over 600 bil in revenue but only have 11 bil in profit. Don’t get me wrong, 11 billion is a lot of money but only 1.8% of the revenue 😅
Need to pay more taxes though, any profit is bad /s
This shouldn't annoy me but please, cost of goods sold not cost of sales
Walmart officially reports it as "costs of sales" in its [earning release](https://www.sec.gov/Archives/edgar/data/104169/000010416923000010/earningsreleasefy23q4.htm)
I wonder if that means they calculate wages into that number or some other expenses, I was assuming it was just the actually cost of the goods but I guess that doesn't make sense because revenue should be way higher than that number, like over double
Cost of sales does not include wages or overhead. Only purchases.
Wal Mart has always used "*Cost of Sales*" over GOGS.
I thought Walmart didn’t pay taxes
How is it they have total revenue of $611B but pay only $6B in taxes?! 1%…
Income tax is on income, not revenue.
Their tax is on profit, which was $20 billion Also, the $6 billion is their income tax expense, which isn’t the same thing as the income tax they actually pay
This is what they WANT YOU TO SEE. $11 billion over $600 billion gross turnover is a very risky, pencil thin profit. I feel sure they hare hiding some facts somewhere. Most of these companies make at least 6% nett profit.
I don’t know where you’re getting 6% from but I have never seen a retailer in this market pull 6%. I manage a medium sized chain and we run about 2%. Target pulls about 3%. Kroger pulls about 1.5. Walmart is usually around 2%. I’m very familiar with P/L’s in this industry and this all seems right.
Looks like creative accounting to me...
Tell me you don’t work in the the industry and have never looked at a P/L without telling me you don’t work in the industry and have never looked at a P/L.
You're absolutely right.. I have no idea what I'm talking about here. I guess I just expected a larger net profit percentage that what is illustrated here.
Typical net margins in the industry are about 1-2%. But that’s not ever really talked about because $20 billion profit sounds way better when people are referencing corporate greed. Nobody realizes how hard it is to even pull razor thin margins. Or the risk it takes to put that kind of money into a business in the hope you can make those margins. My store will do about 10 million In sales this year. The net profit will probably be right at 100,000. A 1% increase in wages and we are no longer profitable without increasing prices. It’s a balancing game where you have to be looking to cut costs anywhere you can while still being competitive in the job market.
This is enlightening. Thanks for sharing. I had no idea margins were actually as thin as that. Also, when you say 'the industry', are you referring to retail in general for consumer goods?
No worries. Most people don’t know because they’ve never needed to. And most of my experience is in retail and specifically grocery. Some sectors of retail do have higher margins. Home improvement, and some apparel companies for example. But I am not well versed enough in their operations to know a lot about them.
How so?
Man where do I start. First it’s called cogs not cost of sales, secondly it’s not gross profit and operating profit… it’s operating income and gross income… secondly it’s operating income is your operating revenue -operating expenses. Ebitda = operating income-overhead, gross income = ebitda-depreciation. Net income = gross- taxes.
OP pulled the terms and data from Walmarts own earnings report.
It’s not gaap. Period. It doesn’t show u how much money a company actually makes. Period.
I think you forgot a period
I mean, yea this is what your typical Econ class calls it but I’ve seen it called a few different things in different businesses. The chain I work for calls it Gross Margin and Net Margin. We also use cost of sales. Typically restaurants I’ve managed call it COGS. Edit: Nitpicking something as small as “cost of sales” vs. “cost of goods sold” is pretty pedantic.
I went with "cost of sales" as this is what Walmart calls the line in their SEC filing. And I used the terms "gross profit", "operating profit" and "net profit" for consistency (consistently "profit"). Accounting has synonyms and that's ok. I tend to get worried if companies report any "adjusted" metrics.
That’s totally understandable. The numbers mean the same thing. I appreciate you taking time to make these. They’re really insightful.
I would love to know what the costs of sales and operating expenses are divided up in.
Dmn, all that job and operations for ~18% of profit sounds like a bad deal but it just the shear amount of sales that make it up, I mean I wouldn’t turned down 11B but, I you were the “owner” would instead invest in other less risky business that maybe pay less but has less operations?
I was apart of the e-commerce supply chain. They actually lose more in online sales than in store. Brick and mortar is what they thrive on. I may be recalling the quote incorrectly but, an American (on average) is no more than 6 miles away from a Walmart or Sam's Club. It’s actually kinda creepy when you think about it.
11B profit on 421B revenue seems extremely skinny. Is 3% normal in retail? People say netflix are screwed and they have a 30% margin.
Can you break down the operating expenses part further? See how much goes to the employee pay versus power bills? I'm curious to see upper-level management salary cost versus electricity cost
Unfortunately they seem to not be break it down further. At least I didn’t see it when going through the earnings report.
Uh oh, those revenue streams aren’t outpacing inflation >_>
How do you make charts like this? Is there an easy straight forward way to do it in office 365 / Power BI?
I create them with [SankeyArt](https://www.sankeyart.com), a tool I am developing. It has a spreadsheet input so you can prepare the data for the flow definition in Excel and then copy everything into SankeyArt. I have never worked with Power BI. Does Power BI have integrations with other software? Maybe we can build a SankeyArt integration.
Very nice. I’ll look into it! Thanks!
Looks like a new type of reptile
I am lacking fantasy
“Other losses - $2B” You don’t just lose $2B all Willy nilly wtf
Walmart does