Thanks for visiting my Costco Financial Report page. On this page, you will be able to find preliminary information about Costco's current financial performance as well as some historical track records and trends.
For a more detailed examination of Costco's financial performance, I offer two reports, which are "A Beginner's Guide to Costco Financial Analysis" and "Costco Financial Report by Paul Borosky, MBA." Both reports are written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, and include:
- Summarized income statements for the last 5 years.
- Summarized balance sheets for the last 5 years.
- Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is where I use plain English to explain concepts.
For a MORE in-depth review of the company's financial statements and ratios, make sure to buy my "Costco Financial Report". The financial report includes all aspects of my "Beginner's Guide" plus a whole lot more...
- Professional financial analysis of important income statements, balance sheets, and financial ratio trends.
- "Letter Grade" is assigned to most financial statement line items and financial ratios to help you better understand their overall trends for the last 5 years.
- Overall financial analysis summary for the company.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
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Sample Financial Report
Costco: Brief Summary
Costco Incorporated is one of the most sought-after stocks in the world. The company’s legendary founders, James Sinegal and Jeffrey Brotman are world-renowned. Costco Inc. continues to innovate and disrupt its industry under the current leadership of Craig Jelinek.
These circumstances have resulted in the organization becoming an industry leader. For some, these facts alone are reason enough to buy stock in the company.
Costco Financial Report Sources
“Costco 2022 Company Analysis: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by Paul Borosky, MBA., and owner of Quality Business Plan. In this report, the author selected Costco's 2018 10k, 2019 10k annual report, 2020 10k annual report, 2021 10k annual report, and Costco's 2022 10k annual reports as the basis for information gathering.
Section 1: Costco Income Statement Analyzed
In this section, I walk through a broad definition of what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of Costco's important income statement line item trends from 2016 to 2020, in most cases.
Revenue Growth: Costco’s revenues in 2016 were $118 billion. In the next several years, the organization will continually increase its revenues ending 2020 at $166.7 billion. This moderate growth rate equates to approximately a 9% annual revenue growth.
The consistent and above-average annual growth rate shows that the company is currently in a business expansion cycle. In a business expansion cycle, investors often forgo the expectation of dividend payouts in hopes of future revenue gains through increased retained earnings. In Costco’s case, not only is the organization consistently increasing its revenues, but they are also increasing its dividend payouts as well. Investors are being rewarded on two fronts! What a great deal.
Costco 2022 Income Statement Summary
|R & D||-||-||-||-||-|
|Total Operating Expenses||19,779||18,537||16,387||15,080||13,944|
Section 2: Costco Balance Sheet Analyzed
For Costco's balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define Costco's balance sheet line items, such as cash, property, plant and equipment, and liabilities between 2016 to 2020. Next, I then offer a summary analysis of Costco's essential balance sheet line items.
Cash: Costco’s cash position in 2016 was $3.3 billion. In the next three years, the organization would moderately increase its cash position ending 2019 at $8.3 billion. However, in 2020, the organization’s cash position would increase substantially, ending the year at $12.2 billion.
The significant increase in cash may indicate that the organization needs more funds to maintain operations. However, because the organization has shown impressive discipline with its continued revenue growth and moderate cost growth, increasing cash at such a substantial rate may indicate inefficiencies in using the current assets of the organization. A better strategy would be for the firm to maintain its disciplinary ways and grow its cash position moderately similar to its revenue growth as well as operating cost growth.
Costco 2022 Summary Balance Sheet
|Short Term Investment||
|LT Debt - Current||
|Total Current Liabilities||
|Total Equity & Liability||
Section 3: Costco Financial Ratios Analyzed
For this section, I have chosen several different financial ratios to review for Costco from 2016 to 2020. In reviewing each of Costco's financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of Costco's Important Financial ratios.
Costco's Total Asset Turnover
Costco’s total asset turnover ended in 2016 at 3.5. In the next several years, the organization’s total asset turnover would continually fall, ending 2020 at 3.0. This means that the organization is making less money on total assets managed. To better utilize total assets, the organization needs to either sell off underutilized assets and equipment or moderate its fixed asset accumulation until its current assets under management are better optimized. In other words, the company needs to stop buying stuff like buildings and heavy machinery before they fully optimize what they have now.
Costco's Return on Assets
Costco’s return on assets ended 2016 at 7%. In the next three years, the organization’s return on assets would moderately grow to 8.06% in 2019. However, in 2020, the organization’s return on assets would moderately fall to 7.2%. The reduction in return on assets for the organization may be attributed to its inability to optimally exploit current asset opportunities. In other words, the company is holding too much cash and possibly short-term investments. A better strategy would be for the organization to better utilize its liquid assets by paying out increased dividends, investing in company expansion at a faster pace, or repurchasing stocks from the open market. Any one of these actions may help improve the organization’s management of assets.