Costco Wholesale Corp. (NASDAQ:COST)

The analysis of the annual financial data reveals a consistent increase in both total assets and stockholders' equity over the observed periods, indicating growth and expansion in the company's financial base.

Total Assets

The reported total assets increased steadily from 55,556 million USD in 2020 to 77,099 million USD in 2025. This represents an approximate cumulative growth of 38.8% over the six-year span. The adjusted total assets, which exclude goodwill, follow a similar upward trajectory, rising from 54,568 million USD in 2020 to 76,105 million USD in 2025. The adjustment slightly reduces the asset base each year but does not significantly alter the overall growth trend.

Stockholders’ Equity

The reported total Costco stockholders’ equity showed a more variable pattern but ultimately exhibited growth, increasing from 18,284 million USD in 2020 to 29,164 million USD in 2025. Notably, there was a dip between 2020 and 2021, from 18,284 to 17,564 million USD, followed by a strong recovery and increase through 2025. The adjusted equity values demonstrate a similar pattern but consistently present lower figures due to goodwill exclusion, ranging from 17,296 million USD in 2020 to 28,170 million USD in 2025.

Comparative Insights

The gap between reported and adjusted figures reflects the impact of goodwill on the financial statements. Goodwill appears to be a relevant component of both assets and equity, although it does not dominate the values. The consistent growth in adjusted figures confirms underlying asset and equity growth independent of goodwill.

Overall Financial Position

The overall increase in total assets alongside stockholders' equity suggests strengthening financial health and capital base. The fluctuations in equity values suggest periods of possible share repurchases, dividend payments, or other equity adjustments, but the long-term trend remains positive. This pattern supports a narrative of ongoing corporate growth and capital accumulation.

The analysis of financial ratios over the examined periods reveals several noteworthy trends in operational efficiency, leverage, and profitability.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios exhibit a generally increasing trend from 2020 through 2025. The reported ratio rises from 2.94 to a peak of 3.57 in 2024 before slightly declining to 3.5 in 2025. Similarly, the adjusted ratio grows from 2.99 to 3.63 in 2024 and decreases marginally to 3.55 in 2025. This progression suggests improved efficiency in using total assets to generate sales, with goodwill adjustments having a consistent, incremental effect on the ratio.

Financial Leverage

The reported financial leverage ratio demonstrates a downward trend from 3.04 in 2020 to 2.64 in 2025, with a notable dip to 2.75 in 2023. The adjusted ratio follows a similar pattern, decreasing from 3.15 in 2020 to 2.7 in 2025. These declines indicate a gradual reduction in the use of debt relative to equity, reflecting a possible strategic focus on lowering financial risk and improving capital structure stability.

Return on Equity (ROE)

Reported ROE presents an overall upward movement, starting at 21.89% in 2020 and peaking at 31.19% in 2024 before falling to 27.77% in 2025. Adjusted ROE shows a similar pattern, rising from 23.14% to 32.56% in 2024 and declining to 28.75% in 2025. This performance signals enhanced profitability and shareholder value creation over the years, despite the slight dip in the most recent period. The adjusted values consistently exceed the reported figures, reflecting a positive impact when goodwill is taken into account.

Return on Assets (ROA)

Both reported and adjusted ROA increase steadily from 2020 through 2025. The reported ROA improves from 7.2% in 2020 to 10.5% in 2025, and the adjusted ROA goes from 7.33% to 10.64%. This upward trend signifies enhanced overall asset profitability, indicating efficient asset utilization. The adjusted ROA remains slightly higher than the reported, reaffirming the effect of goodwill adjustments on asset profitability measurement.

In summary, the financial metrics indicate strengthening operational efficiency and asset utilization, alongside a deliberate reduction in leverage. Profitability metrics reveal solid returns for equity holders and assets, with adjusted measures consistently reflecting slightly better performance than reported figures. The minor declines in some ratios in the latest period suggest possible external or cyclical factors impacting performance, warranting continued monitoring.

The financial data reveals a consistently positive trajectory in both reported and adjusted total assets over the examined periods. Reported total assets have increased steadily from approximately 55.6 billion US dollars in 2020 to nearly 77.1 billion in 2025, reflecting a compound growth trend. Similarly, adjusted total assets, which account for goodwill adjustments, follow a parallel upward path, starting at around 54.6 billion in 2020 and reaching approximately 76.1 billion by 2025. This close alignment between reported and adjusted metrics suggests limited impact from goodwill on the asset base.

Regarding efficiency, both reported and adjusted total asset turnover ratios show an overall improvement, indicating enhanced utilization of assets to generate revenue. Reported total asset turnover has risen from 2.94 in 2020 to a peak of 3.57 in 2024, slightly declining to 3.50 in 2025. Adjusted total asset turnover mirrors this pattern, increasing from 2.99 in 2020 to 3.63 in 2024, followed by a small reduction to 3.55 in 2025. These elevated turnover ratios suggest that the company has improved its effectiveness in deploying assets to produce sales over the period.

The minor dip in turnover ratios in the final year could indicate either a subtle deceleration in sales growth relative to asset expansion or a strategic investment phase impacting asset utilization. However, the general trend confirms robust asset management and revenue generation capacity across the timeframe.

Total Assets

Steadily increased from 55.6 billion to 77.1 billion US dollars (reported), and from 54.6 billion to 76.1 billion US dollars (adjusted) between 2020 and 2025.

Total Asset Turnover

Improved from 2.94 to 3.57 (reported) and 2.99 to 3.63 (adjusted), with a minor decline in 2025.

Asset Efficiency

Enhanced utilization indicated by rising turnover ratios, suggesting improved revenue generation per unit of asset.

Goodwill Impact

Minimal difference between reported and adjusted figures, indicating limited effect of goodwill on asset valuation.

Total Assets

The reported total assets demonstrated a consistent upward trend over the observed periods, increasing from approximately 55,556 million US dollars in 2020 to about 77,099 million US dollars in 2025. The adjusted total assets followed a similar pattern, starting at 54,568 million US dollars in 2020 and rising steadily to reach 76,105 million US dollars by 2025. This indicates continued asset growth, reflecting potential expansion or acquisition activities.

Stockholders’ Equity

Reported total stockholders’ equity experienced fluctuations but generally increased from 18,284 million US dollars in 2020 to 29,164 million US dollars in 2025, despite a slight decline between 2023 and 2024. Adjusted stockholders’ equity showed a parallel pattern, beginning at 17,296 million US dollars in 2020 and rising to 28,170 million US dollars in 2025. These movements suggest an overall strengthening of the equity base over time, although the dip around 2024 may warrant further investigation.

Financial Leverage

Reported financial leverage ratios varied throughout the periods, starting at 3.04 in 2020, peaking at 3.37 in 2021, then gradually declining to 2.64 by 2025. Adjusted financial leverage followed closely, beginning at 3.15 in 2020, reaching a high of 3.52 in 2021, and subsequently decreasing to 2.7 in 2025. The downward trend in leverage ratios during the latter years indicates a reduction in reliance on debt relative to equity, potentially reflecting improved balance sheet strength or debt management strategies.

The financial data over the reported periods reveals several notable trends in stockholders’ equity and return on equity (ROE) metrics, both reported and goodwill adjusted.

Stockholders’ Equity

There is an overall upward trend in both reported and adjusted total stockholders’ equity from 2020 through 2025. Reported equity increases markedly from approximately $18.3 billion in 2020 to nearly $29.2 billion in 2025, reflecting strong capital growth over the six-year period. Adjusted stockholders’ equity, which accounts for goodwill adjustments, follows a similar trajectory, rising from about $17.3 billion in 2020 to approximately $28.2 billion in 2025. Although both measures generally trend upwards, the reported equity consistently exceeds the adjusted equity by a modest margin each year.

Return on Equity (ROE)

The reported ROE demonstrates considerable fluctuations but maintains a generally high level over the periods. It starts at roughly 21.9% in 2020, peaking near 31.2% in 2024 before slightly declining to approximately 27.8% in 2025. The adjusted ROE, which reflects the profitability net of goodwill impacts, exhibits a parallel pattern, starting at about 23.1% in 2020 and reaching a maximum of roughly 32.6% in 2024, then moderately decreasing to 28.8% in 2025. Notably, the adjusted ROE consistently remains above the reported ROE, suggesting that the goodwill adjustments yield a more favorable portrayal of equity profitability across the years.

In summary, the data indicate sustained growth in equity capital combined with consistently strong, albeit slightly variable, profitability as measured by ROE. The adjusted figures, accounting for goodwill, provide a perspective that generally portrays higher returns compared to reported figures, implying that the underlying business performance may be stronger than what the unadjusted numbers suggest. The peak observed in 2024 followed by a mild decrease in 2025 merits close monitoring for understanding changes in operational efficiency or capital structure.

Total Assets

The reported total assets have exhibited a consistent upward trend over the six-year period, growing from $55,556 million in 2020 to $77,099 million in 2025. This reflects steady asset accumulation. The adjusted total assets, which exclude goodwill, follow a similar growth pattern, increasing from $54,568 million to $76,105 million during the same timeframe. The proximity between reported and adjusted figures suggests that goodwill represents a relatively small portion of total assets, and the asset base expansion is largely organic.

Return on Assets (ROA)

Both reported and adjusted ROA have experienced a positive trajectory, indicating improving efficiency in asset utilization. Reported ROA increased from 7.2% in 2020 to a peak of 10.55% in 2024 before slightly declining to 10.5% in 2025. Adjusted ROA mirrors this pattern closely, advancing from 7.33% to 10.7% and then marginally decreasing to 10.64% over the same years. The consistent alignment of reported and adjusted ROA underlines stable profitability unaffected by goodwill adjustments. The growth in ROA over the period signals enhanced profitability relative to the asset base.