Analysis of Inventory
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Costco Wholesale Corp. pages available for free this week:
- Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Inventory Disclosure
Costco Wholesale Corp., balance sheet: inventory
US$ in millions
| Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | Sep 1, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| United States | |||||||||||||
| Canada | |||||||||||||
| Other International | |||||||||||||
| Merchandise inventories |
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
| Item | Description | The company |
|---|---|---|
| Merchandise inventories | Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. | Costco Wholesale Corp. merchandise inventories decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level. |
Adjustment to Inventory: Conversion from LIFO to FIFO
Adjusting LIFO Inventory to FIFO (Current) Cost
US$ in millions
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
Costco Wholesale Corp. inventory value on Sep 1, 2024 would be $18,647) (in millions) if the FIFO inventory method was used instead of LIFO. Costco Wholesale Corp. inventories, valued on a LIFO basis, on Sep 1, 2024 were $18,647). Costco Wholesale Corp. inventories would have been $—) higher than reported on Sep 1, 2024 if the FIFO method had been used instead.
Costco Wholesale Corp., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios: LIFO vs. FIFO (Summary)
Costco Wholesale Corp., adjusted financial ratios
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Costco Wholesale Corp. adjusted current ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024. |
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Costco Wholesale Corp. adjusted net profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Costco Wholesale Corp. adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Costco Wholesale Corp. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. | Costco Wholesale Corp. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Costco Wholesale Corp. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
Costco Wholesale Corp., Financial Ratios: Reported vs. Adjusted
Adjusted Current Ratio
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
2024 Calculations
1 Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= ÷ =
| Liquidity ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Costco Wholesale Corp. adjusted current ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024. |
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
2024 Calculations
1 Net profit margin = 100 × Net income attributable to Costco ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Costco ÷ Net sales
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Costco Wholesale Corp. adjusted net profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
2024 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Costco Wholesale Corp. adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
Adjusted Financial Leverage
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
2024 Calculations
1 Financial leverage = Total assets ÷ Total Costco stockholders’ equity
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Costco stockholders’ equity
= ÷ =
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Costco Wholesale Corp. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level. |
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
2024 Calculations
1 ROE = 100 × Net income attributable to Costco ÷ Total Costco stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Costco ÷ Adjusted total Costco stockholders’ equity
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. | Costco Wholesale Corp. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01).
2024 Calculations
1 ROA = 100 × Net income attributable to Costco ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Costco ÷ Adjusted total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Costco Wholesale Corp. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |