Costco wholesale, a multinational company with operations in eight countries, is owned by Costco. Costco wholesale was named the top retailer for organic products, wine and rotisserie chicken in 2016. Costco will be the fifth-largest retailer worldwide in 2020. Fortune 500 placed Costco at the tenth place in America based on its revenue. Costco headquarters are located in Washington, DC. Costco began operations in Seattle, Washington, DC, in 1983. The company has 884 warehouses in total, with one located in China, two in France and one each in Iceland. There are also sixteen stores in South Korea.
An annual Revenue of millions of US Dollars
$1 Net Income in Million USD
USD dollars per share
$ Warehouses s2017 299,025 2679 186.12 741
2018 141,576 3,134 203.71 768
2019 152,703 3,659 293.92 782 s2020 166,761 4,002 376.78 803
Analysis of financial history of company includes accounts receivables and inventory. The income statement, balance sheet, statement of shareholder ownership and ratios are all important.
Payable to accounts
Sometimes accounts receivable are also known as debtors’ accounts. This happens when a company makes a deal with a buyer and promises that they will pay them later. Costco Wholesale Company’s receivables were at $1595,000,000. The company’s quarterly debts exceeded $1,595,000,000. Ben Graham says Costco’s remaining Days Sales Outstanding will equal 3.21 days for the quarter that ends in May 2021. A company with a lower proportion of net receivables than its competitors’ gross sales will enjoy a competitive edge. Therefore, further research is necessary.
Inventory
Costco Wholesale firm had a inventory turnover ratio 11.85.
• Inventory turnover ratio = selling price divided by average total inventory
August 31, 2019, = 132.886, August 31 2018, = 11.040. Average inventory = (11040 + 1395)/2=11217.5 August 31, 2019, is 132.886, August 31,2018 = 11.040. Aug 31, 2018, 2018 = 11.040. September 31, 2018, 2018 = 11395. August 31, 2019: 132.886, August 31, 2018. August 31, 2016, 2018 = 1140. August 31, 2018: 1140.
This means inventory is being sold on average 11.85 per year or 31 times per daily. An inventory turnover ratio shows how cash is generated from inventory. Therefore, a higher inventory ratio is advised. Wal-Mart stores Inc. had an inventory turnover ratio of 8.90 times as of January 2020 (Tian. 2020b). Costco therefore was better off and should continue to maintain their inventory ratio.
Assets can be described as the valuables or assets that a company has. You can have intangible assets like bank cash, debts or inventory. Or you might have physical assets such as real estate or inventory. Divide the average assets by value revenue to calculate the asset turnover ratio.
• Asset turnover ratio is revenues divided by average total assets
August 31, 2019 = 1502703, August 31, 2018. Total assets = 45400 (40830+ 45400)/2 = 43115 + 43115 = 3.5
Costco had a turnover ratio of 3.5%. Costco Wholesale generates 3 and 1/2 dollars per dollar of assets. An asset turnover rate is a measure of how effectively a business uses its assets to generate revenues. A greater ratio would be desirable. Costco’s asset turnover ratio is 3.50, which indicates Costco uses its assets effectively. They should therefore maintain this ratio.
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