Inventory Disclosure
Adjustment to Inventory: Conversion from LIFO to FIFO
Adjusted Financial Ratios: LIFO vs. FIFO (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

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	13,625)	12,153)	13,160)	10,248)	8,871)	8,415)
Canada	1,895)	1,579)	1,966)	1,456)	1,310)	1,123)
Other International	3,127)	2,919)	2,781)	2,511)	2,061)	1,857)
Merchandise inventories	18,647)	16,651)	17,907)	14,215)	12,242)	11,395)

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).

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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.

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
Adjustment to Merchandise Inventories
Merchandise inventories at LIFO (as reported)	18,647)	16,651)	17,907)	14,215)	12,242)	11,395)
Add: Inventory LIFO reserve	—)	—)	438)	—)	—)	—)
Merchandise inventories at FIFO (adjusted)	18,647)	16,651)	18,345)	14,215)	12,242)	11,395)
Adjustment to Current Assets
Current assets (as reported)	34,246)	35,879)	32,696)	29,505)	28,120)	23,485)
Add: Inventory LIFO reserve	—)	—)	438)	—)	—)	—)
Current assets (adjusted)	34,246)	35,879)	33,134)	29,505)	28,120)	23,485)
Adjustment to Total Assets
Total assets (as reported)	69,831)	68,994)	64,166)	59,268)	55,556)	45,400)
Add: Inventory LIFO reserve	—)	—)	438)	—)	—)	—)
Total assets (adjusted)	69,831)	68,994)	64,604)	59,268)	55,556)	45,400)
Adjustment to Total Costco Stockholders’ Equity
Total Costco stockholders’ equity (as reported)	23,622)	25,058)	20,642)	17,564)	18,284)	15,243)
Add: Inventory LIFO reserve	—)	—)	438)	—)	—)	—)
Total Costco stockholders’ equity (adjusted)	23,622)	25,058)	21,080)	17,564)	18,284)	15,243)
Adjustment to Net Income Attributable To Costco
Net income attributable to Costco (as reported)	7,367)	6,292)	5,844)	5,007)	4,002)	3,659)
Add: Increase (decrease) in inventory LIFO reserve	—)	(438)	438)	—)	—)	—)
Net income attributable to Costco (adjusted)	7,367)	5,854)	6,282)	5,007)	4,002)	3,659)

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

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Costco Wholesale Corp., adjusted financial ratios

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
Current Ratio
Reported current ratio (LIFO)	0.97	1.07	1.02	1.00	1.13	1.01
Adjusted current ratio (FIFO)	0.97	1.07	1.04	1.00	1.13	1.01
Net Profit Margin
Reported net profit margin (LIFO)	2.95%	2.65%	2.62%	2.61%	2.45%	2.45%
Adjusted net profit margin (FIFO)	2.95%	2.46%	2.82%	2.61%	2.45%	2.45%
Total Asset Turnover
Reported total asset turnover (LIFO)	3.57	3.45	3.47	3.24	2.94	3.29
Adjusted total asset turnover (FIFO)	3.57	3.45	3.45	3.24	2.94	3.29
Financial Leverage
Reported financial leverage (LIFO)	2.96	2.75	3.11	3.37	3.04	2.98
Adjusted financial leverage (FIFO)	2.96	2.75	3.06	3.37	3.04	2.98
Return on Equity (ROE)
Reported ROE (LIFO)	31.19%	25.11%	28.31%	28.51%	21.89%	24.00%
Adjusted ROE (FIFO)	31.19%	23.36%	29.80%	28.51%	21.89%	24.00%
Return on Assets (ROA)
Reported ROA (LIFO)	10.55%	9.12%	9.11%	8.45%	7.20%	8.06%
Adjusted ROA (FIFO)	10.55%	8.48%	9.72%	8.45%	7.20%	8.06%

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

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	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
As Reported
Selected Financial Data (US$ in millions)
Current assets	34,246)	35,879)	32,696)	29,505)	28,120)	23,485)
Current liabilities	35,464)	33,583)	31,998)	29,441)	24,844)	23,237)
Liquidity Ratio
Current ratio¹	0.97	1.07	1.02	1.00	1.13	1.01
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets	34,246)	35,879)	33,134)	29,505)	28,120)	23,485)
Current liabilities	35,464)	33,583)	31,998)	29,441)	24,844)	23,237)
Liquidity Ratio
Adjusted current ratio²	0.97	1.07	1.04	1.00	1.13	1.01

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
= 34,246 ÷ 35,464 = 0.97

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 34,246 ÷ 35,464 = 0.97

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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.

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Costco	7,367)	6,292)	5,844)	5,007)	4,002)	3,659)
Net sales	249,625)	237,710)	222,730)	192,052)	163,220)	149,351)
Profitability Ratio
Net profit margin¹	2.95%	2.65%	2.62%	2.61%	2.45%	2.45%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Costco	7,367)	5,854)	6,282)	5,007)	4,002)	3,659)
Net sales	249,625)	237,710)	222,730)	192,052)	163,220)	149,351)
Profitability Ratio
Adjusted net profit margin²	2.95%	2.46%	2.82%	2.61%	2.45%	2.45%

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 × 7,367 ÷ 249,625 = 2.95%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Costco ÷ Net sales
= 100 × 7,367 ÷ 249,625 = 2.95%

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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.

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales	249,625)	237,710)	222,730)	192,052)	163,220)	149,351)
Total assets	69,831)	68,994)	64,166)	59,268)	55,556)	45,400)
Activity Ratio
Total asset turnover¹	3.57	3.45	3.47	3.24	2.94	3.29
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Net sales	249,625)	237,710)	222,730)	192,052)	163,220)	149,351)
Adjusted total assets	69,831)	68,994)	64,604)	59,268)	55,556)	45,400)
Activity Ratio
Adjusted total asset turnover²	3.57	3.45	3.45	3.24	2.94	3.29

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
= 249,625 ÷ 69,831 = 3.57

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 249,625 ÷ 69,831 = 3.57

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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.

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	69,831)	68,994)	64,166)	59,268)	55,556)	45,400)
Total Costco stockholders’ equity	23,622)	25,058)	20,642)	17,564)	18,284)	15,243)
Solvency Ratio
Financial leverage¹	2.96	2.75	3.11	3.37	3.04	2.98
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets	69,831)	68,994)	64,604)	59,268)	55,556)	45,400)
Adjusted total Costco stockholders’ equity	23,622)	25,058)	21,080)	17,564)	18,284)	15,243)
Solvency Ratio
Adjusted financial leverage²	2.96	2.75	3.06	3.37	3.04	2.98

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
= 69,831 ÷ 23,622 = 2.96

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Costco stockholders’ equity
= 69,831 ÷ 23,622 = 2.96

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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.

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Costco	7,367)	6,292)	5,844)	5,007)	4,002)	3,659)
Total Costco stockholders’ equity	23,622)	25,058)	20,642)	17,564)	18,284)	15,243)
Profitability Ratio
ROE¹	31.19%	25.11%	28.31%	28.51%	21.89%	24.00%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Costco	7,367)	5,854)	6,282)	5,007)	4,002)	3,659)
Adjusted total Costco stockholders’ equity	23,622)	25,058)	21,080)	17,564)	18,284)	15,243)
Profitability Ratio
Adjusted ROE²	31.19%	23.36%	29.80%	28.51%	21.89%	24.00%

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 × 7,367 ÷ 23,622 = 31.19%

² Adjusted ROE = 100 × Adjusted net income attributable to Costco ÷ Adjusted total Costco stockholders’ equity
= 100 × 7,367 ÷ 23,622 = 31.19%

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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.

	Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Costco	7,367)	6,292)	5,844)	5,007)	4,002)	3,659)
Total assets	69,831)	68,994)	64,166)	59,268)	55,556)	45,400)
Profitability Ratio
ROA¹	10.55%	9.12%	9.11%	8.45%	7.20%	8.06%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Costco	7,367)	5,854)	6,282)	5,007)	4,002)	3,659)
Adjusted total assets	69,831)	68,994)	64,604)	59,268)	55,556)	45,400)
Profitability Ratio
Adjusted ROA²	10.55%	8.48%	9.72%	8.45%	7.20%	8.06%

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 × 7,367 ÷ 69,831 = 10.55%

² Adjusted ROA = 100 × Adjusted net income attributable to Costco ÷ Adjusted total assets
= 100 × 7,367 ÷ 69,831 = 10.55%

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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.

Costco Wholesale Corp. (NASDAQ:COST)

Analysis of Inventory

Inventory Disclosure

Adjustment to Inventory: Conversion from LIFO to FIFO

Costco Wholesale Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Costco Wholesale Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)