Costco Financial Statements and Financial Ratios Analyzed from 2015 to 2019

More Options. No Obligations.

Pay as you go. No long term contracts. Cancel anytime.

Costco Annual Reports

$4.99
  • Pretty Cool Annual Reports (5 years)
  • Killer One easy download
  • Awesome Expert financial analysis

Costco Financial Report by Paul Borosky, MBA.

$9.99
  • Pretty Cool Easy to download PDF File.
  • Killer Expert financial analysis done by an MBA.
  • Awesome 7 Day Limited Money Back Guarantee!

Costco Financial Report - Plus Free Annual Reports (5 yrs)

$9.99
  • Pretty Cool Easy PDF File download.
  • Killer Expert financial analysis done by an MBA.
  • Awesome 7 Day limited Money Back Guarantee!
  • Tubular Free Annual Reports Download (5 years).

Hey All,

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, please check out the "Financial Report".  In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:

  • Summarized income statement for the last 5 years.
  • Summarized balance sheet for the last 5 years.
  • Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
  • Five year’s 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 provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is were I use plain English to explain concepts.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!

Sincerely,

Paul MBA.

Costco Financial Report by Paul Borosky, MBA.
  • Company Report comes with a 7-day Limited 100% MONEY BACK GUARANTEE.
  • Free Bonus Downloads: Costco's Annual Statements for the Last Five Years (10k reports)!

Sample Financial Report

Sample Financial Report by Paul Borosky, MBA.
Financial Report Sample 2

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 their 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 2019 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, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and Costco's 2019 10k annual report as the basis for information gathering. 

Section 1: Costco Income Statement Analyzed 2015 to 2019

In this section, I walk through a broad definition as to 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 2015 to 2019, in most cases.

Revenue Growth:  Costco’s revenue has grown at an average rate of 7.1% over the last five years.  In the last three years, the growth rate has ranged from 7.9% to 9.7%.  However, the growth rate from 2019 to 2018 was only 7.9%, which is off their high of 9.7%.  If this trend continues, then there future net earnings may be mitigated substantially.

SG&A:  The company’s SG&A has ranged between 9.8% to 10.2%.  In the last two years, this line item has stayed consistent at 9.8%.  This shows that the organization has moderated its overhead costs to align with revenue growth.  As a result, the firm may have developed a sustainable competitive advantage over other wholesale outlets.

Costco Income Statement Summary 2019

Column1 2019 2018 2017 2016 2015
Revenues                  152,703                  141,576                  129,025                  118,719                    116,199
COGS                  132,886                  123,152                  111,882                  102,901                    101,065
Gross Profit                    19,817                    18,424                    17,143                    15,818                      15,134
 
SG&A                    14,994                    13,876                    12,950                    12,068                      11,445
Depreciation                            -                            -                            -                            -                             -
R & D                            -                            -                            -                            -                             -
Other                           86                           68                           82                           78                             65
Operating Expenses                    15,080                    13,944                    13,032                    12,146                      11,510
EBIT                      4,737                      4,480                      4,111                      3,872                        3,624
Other Income                            -                            -                            -                            -                             -
Interest Expense                         150                         159                         134                         133                           124
EBT                      4,765                      4,442                      4,039                      3,619                        3,604
Taxes                      1,061                      1,263                      1,325                      1,243                        1,195
Net Income                     3,659                     3,134                     2,679                     2,350                      2,377

Section 2: Costco Balance Sheet Analyzed from 2015 to 2019

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 2015 to 2019.  Next, I then offer a summary analysis of Costco's important balance sheet line items.

Cash:  Costco’s cash position has grown from $4.8 billion in 2015 to $8.3 billion in 2019.  The substantial growth in cash means that the organization either needs more money to support operations, or the company is not optimally using their excess cash.  A better strategy would be to identify a budget that the company needs for cash and invest the rest of the funds in short-term investments.

Short-term investments:  The organization ended 2015 with $1.6 billion in short-term investment.  As of 2019, their short-term investment position fell to $1.1 billion.  This means the company has fewer funds in its short-term investment account.  However, the cash position almost doubled.  This strategy indicates that the company is continually utilizing its cash in a sub-optimal manner.  A better strategy would be to continually increase their short-term investment position and only hold enough cash needed to sustain operations.

Costco Summary of Balance Sheet 2019

Column1 2019 2018 2017 2016 2015
Cash                        8,384                    6,055                    4,546                    3,379                    4,801
Short Term Investment                        1,060                    1,204                    1,233                    1,350                    1,618
Account Receivable                        1,535                    1,669                    1,432                    1,252                    1,224
Inventory                      11,395                  11,040                    9,834                    8,969                    8,908
Other                        1,111                       321                       272                       268                       748
Current Assets                    23,485                20,289                17,317                15,218                17,299
Net PPE                      20,890                  19,681                  18,161                  17,043                  15,401
Goodwill                              -                         -                         -                         -                         -
Other                        1,025                       860                       869                       902                       740
Total Assets                    45,400                40,830                36,347                33,163                33,440
Accounts Payable                      11,679                  11,237                    9,608                    7,612                    9,011
Accrued Expense                        3,176                    2,994                    2,703                    2,629                    2,468
Accrued Taxes                              -                         -                         -                         -                         -
Notes Payable                              -                         -                         -                         -                         -
LT Debt - Current                        1,699                         90                         86                    1,100                    1,283
Other                        3,792                    2,924                    2,639                    2,003                    1,696
Total Current Liabilities                      23,237                  19,926                  17,495                  15,575                  16,540
LT Debt                        5,124                    6,487                    6,573                    4,061                    4,864
Other                        1,455                    1,314                    1,200                    1,195                    1,193
Total Liabilities                    29,816                27,727                25,268                20,831                22,597
Common Stock                               4                           4                           4                           2                           2
Treasury                              -                         -                         -                         -                         -
Retained Earnings                      10,258                    7,887                    5,988                    7,686                    6,518
Other                              -                         -                         -                         -                         -
Total Equity                    15,584                13,103                11,079                12,332                10,843
Total Equity & Liability                    45,400                40,830                36,347                33,163                33,440

Section 3: Costco Financial Ratios Analyzed from 2015 to 2019

For this section, I have chosen several different financial ratios to review for Costco from 2015 to 2019.  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 Current Ratio

Costco’s current ratio has fluctuated between 1.05 and .98 over the last five years.  Industry standards for the current ratio are 1.0.  This indicates that the company maintains a solid balance with having enough current assets to cover its short-term liabilities.

However, some retail and wholesale organizations have been trending towards a lower current ratio.  This trend allows the organization to fully exploit cash-generating revenue lines, such as retail and wholesale sales.

Costco's Total Asset Turnover

Costco’s total asset turnover has maintained a relatively consistent showing over the last five years.  The ratios range has been between 3.36 to 3.58.  However, in the last three years, there has been a steady decline in the total asset turnover ratio.  This shows that the firm may be underutilizing their assets as they grow.  This often happens when an organization holds significant cash.

Costco's Return on Assets

Costco’s return on assets has increased from 7.11% in 2015 to 8.06% in 2019.  This shows that the company is continually increasing its revenues using fewer assets for its operations.

Costco's Debt Ratio

Costco’s debt ratio ended 2015 at 14.55%.  Over the last five years, the organization was able to reduce its debt ratio to 11.29%.  This indicates that the company has been utilizing equity funding for growth and operations as compared to its reliance on debt.  This capital structure is excellent for companies that may be susceptible to economic downturns such as recessions.  Unfortunately, this conservative strategy does come with negative consequences.  Specifically, the organization may be missing out on expansion opportunities due to the scarcity of liquid resources.

Costco Liquidity Ratios 2019

Ratios 2019 2018 2017 2016 2015
Current Ratio                           1.01                    1.02
Cash Ratio                           0.36                    0.30
Quick Ratio                           0.52                    0.46
Net Working Capital                         6,459                  4,533

Costco Asset Utilization 2019

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover                           3.36                    3.47
Fixed Asset Turnover                           7.31                    7.19
Days Sales Outstanding                           3.67                    4.30
Inventory Turnover                         13.40                  12.82
Accounts Receivable Turnover                         99.48                  84.83
Working Capital Turnover                         23.64                  31.23
AP Turnover                         13.08                  12.60
Average Days Inventory                           0.04                    0.04
Average Days Payable                           0.04                    0.03

Costco Profitability Ratios

Ratios 2019 2018 2017 2016 2015
Return on Assets 8.06% 7.68%
Return on Equity 23.48% 23.92%
Net Profit Margin 2.40% 2.21%
Gross Profit Margin 12.98% 13.01%
Operating Profit Margin 3.10% 3.16%
Basic Earning Power 10.43% 10.97%
ROCE 21.37% 21.43%
Capital Employed                       22,163                20,904
ROIC 13.46% 13.24%

Costco Long-term Debt

Ratios 2019 2018 2017 2016 2015
Debt Ratio 11.29% 15.89%
Debt/Equity 32.88% 49.51%
Times Interest Earned                         31.58                  28.18