Costco Wholesale Corp. (NASDAQ:COST)

The analysis of the financial ratios over multiple quarters reveals several notable trends in asset efficiency and equity turnover.

Net Fixed Asset Turnover

This ratio exhibits a gradual upward trend from a value of 7.6 to a peak just above 9.0 in late 2022, indicating an improving ability to generate sales from fixed assets over that period. Subsequently, the figure stabilizes around 8.9 and then shows a modest decline towards the later quarters, suggesting a slight reduction in efficiency or possibly increased asset base without proportional sales growth.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

Similar to the net fixed asset turnover, this ratio rises steadily from 6.75 to approximately 8.12 before experiencing a small decline and fluctuations thereafter. The values consistently remain below the standard net fixed asset turnover ratio, reflecting the broader asset base when including lease-related assets. This indicates that when lease assets are accounted for, asset utilization is somewhat less efficient but follows the same general trend of initial growth followed by a plateau and mild decline.

Total Asset Turnover

The total asset turnover ratio shows an overall positive trend with slight fluctuations, increasing from 2.81 to levels around 3.5. This suggests an improving efficiency in using the entire asset base to generate sales, reaching its highest in early 2024 before showing minor decreases and stabilization around 3.5. The pattern reflects effective asset management contributing to consistent sales generation across periods.

Equity Turnover

Equity turnover displays a downward trend from an initial value of 11.4 to below 9.5 by mid-2023, indicating a reduction in sales generated per unit of equity during this timeframe. However, there is a notable peak in early 2024 reaching approximately 11.76, followed by a subsequent steady decline towards 9.25 in the latest periods. This variability might reflect changes in capital structure, equity base, or sales performance affecting the rate at which equity is utilized to drive revenues.

Overall, asset turnover ratios suggest improved efficiency in utilizing both fixed and total assets over the majority of the period, followed by stabilization or slight decline in recent quarters. Equity turnover shows greater volatility and a general downward tendency after early 2024, implying potential shifts in equity management or sales relative to investor capital. These patterns may warrant further investigation into the underlying business operations, asset investment strategies, and capital structure management to sustain or enhance operational efficiency going forward.

The analysis of the quarterly financial data reveals several key trends in the company's operational and asset management performance over the observed periods.

Net Sales

Net sales display a cyclical pattern with noticeable spikes during certain quarters, suggesting potential seasonality in revenue. Starting at approximately 42.3 billion USD, sales peak substantially in some quarters, such as reaching around 77.4 billion USD in September 2023 and 84.4 billion USD in August 2025. Despite fluctuations, the general trajectory of net sales is upward, indicating growth in the company’s revenue generation capacity over time.

Property and Equipment, Net

The net value of property and equipment shows a steady incremental increase throughout the periods. Beginning near 22.3 billion USD, it gradually rises to approximately 31.9 billion USD by the last quarter of the data. This steady augmentation in fixed assets suggests ongoing investments in physical infrastructure or capital expenditures, reflecting continued commitment to expanding or maintaining operational capacity.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which measures revenue generated per unit of fixed asset investment, exhibits an overall high level with moderate fluctuations. Initial values start at 7.6 and progressively increase to a peak above 9.0 in late 2021 and mid-2022, signaling improved efficiency in using fixed assets to generate sales. However, there is a gradual decline observed after this peak, with the ratio settling around 8.4 to 8.6 in more recent quarters. This decline may indicate that while fixed assets continue to grow, sales growth has not proportionally increased to sustain the highest turnover levels achieved previously.

Overall, the data suggest that the company has experienced steady growth in both its revenue and fixed assets. The efficiency in the utilization of fixed assets improved notably in the middle periods before showing signs of a modest decrease recently. The marked seasonal peaks in net sales could be a factor to consider for operational planning and resource allocation.

Net Sales

The net sales demonstrate a generally increasing trend over the periods analyzed, with some fluctuations. Initial values near 42,000 to 44,000 million US dollars rise sharply in the third and fourth quarters of 2021, reaching a peak above 77,000 million US dollars in multiple quarters including August 2021, September 2023, and September 2024. There are intermittent declines following these peaks, typically returning to the 50,000 to 60,000 million range before rising again, indicating seasonal or cyclical sales behavior. The overall pattern shows growth in net sales, with peaks roughly corresponding to late summer or early autumn periods, suggesting strong quarterly performance with a repeating seasonal component.

Property and Equipment, Net (Including Operating Lease, Right-of-Use Asset)

The net value of property and equipment exhibits a steady and gradual increase throughout the time period reviewed. Starting slightly above 25,000 million US dollars, the figure climbs consistently each quarter, reaching over 34,000 million US dollars by the final reported date. This steady growth reflects ongoing investment in fixed assets and leased properties, contributing to the company’s operational capacity expansion or maintenance. The lack of sharp fluctuations implies a controlled and planned capital expenditure strategy with sustained asset base growth.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

This ratio, which measures efficiency in generating sales from net fixed assets, shows a rising trend initially, climbing from approximately 6.75 to around 8.12 over the first several quarters. After reaching this higher level, the ratio stabilizes somewhat, fluctuating narrowly between approximately 7.79 and 8.11 in later periods. This suggests an improvement in asset utilization efficiency through the initial periods, followed by a phase of maintained but slightly declining turnover efficiency. The stability in this ratio despite growth in assets and sales may indicate balanced expansion where asset growth aligns closely with sales growth.

Overall Analysis

The data reflects sustained sales growth with marked seasonal spikes, a stable increase in asset investment, and improved asset turnover efficiency that plateaus in the later periods. Together, these trends suggest the company is expanding its operational infrastructure while managing to maintain efficient use of its fixed assets in generating revenue. The seasonal variability in net sales, coupled with consistent asset increase, points to strategic capacity management aligned with anticipated demand cycles.

Net Sales

Net sales demonstrate a clear upward trend over the observed periods, increasing from approximately 42.3 billion USD in the earliest quarter to a peak exceeding 84.4 billion USD by the last quarter. Despite some fluctuations, notably sharp rises in third quarters of 2021, 2022, and 2024, the overall trajectory is positive, reflecting sustained revenue growth. Periodic drops occur sporadically, yet the magnitude of subsequent increases generally surpasses prior lows, indicating resilience and expanding market activity.

Total Assets

Total assets exhibit a gradual but steady increase, moving from roughly 60.2 billion USD in the initial period to above 77 billion USD by the end of the timeframe. While minor declines appear at various points, such as between early 2024 and mid-2024, the asset base broadly expands, suggesting ongoing investment in physical or financial resources supporting operations. The growth in assets appears somewhat more moderated compared to net sales, implying potential efficiency improvements.

Total Asset Turnover

The total asset turnover ratio remains consistently high throughout the periods, predominantly fluctuating in a narrow range around 3.2 to 3.7. This ratio reflects efficient utilization of assets to generate sales. Noteworthy peaks occur in early 2024 (approaching 3.68), potentially driven by exceptionally strong sales relative to asset levels in that quarter. Despite the gradual increase in total assets, the turnover remains robust, indicating effective asset management and operational productivity across all periods.

Overall Analysis

The dataset reveals strong revenue growth accompanied by steady asset accumulation, with asset utilization efficiency maintained at a high level. Sales volatility within certain quarters suggests possible seasonality or promotional activity impacting revenue streams. The consistent increase in net sales outpaces asset growth, supporting improved operational leverage. Together, these trends imply a company enhancing its sales volume while maintaining control over asset expansion and usage efficiency.

Net Sales

The net sales demonstrate a generally increasing trend over the observed periods, with seasonal fluctuations apparent. There are significant increases in the second and fourth quarters of each fiscal year, aligning with typical retail cycles. For instance, sales peaked around August and November periods, with a notable rise to approximately 78 billion US dollars in August 2024 and 84 billion US dollars in August 2025. Conversely, lower sales figures are observed around February and May quarters, reflecting possibly less consumer activity during these times.

Total Costco Stockholders’ Equity

The stockholders’ equity exhibits steady growth throughout the timeline. The equity increased from around 14.9 billion US dollars in late 2020 to nearly 29.2 billion US dollars by mid-2025. This consistent expansion suggests that the company has been improving its net asset base, likely supported by retained earnings and capital contributions. Despite some fluctuations, there are no significant declines, indicating financial stability and an accumulation of shareholder value over time.

Equity Turnover Ratio

The equity turnover ratio has been on a gradual decline from approximately 11.4 in November 2020 to around 9.25 by August 2025. This decreasing ratio indicates that each dollar of stockholders’ equity is generating fewer sales over time. Although this could reflect a growing equity base, which is consistent with the increasing stockholders’ equity, it also suggests that net sales growth is not keeping pace proportionally with equity growth. Notably, the ratio experienced a temporary increase in early 2024, reaching about 11.76, possibly due to a spike in net sales during that period.

Overall Insights

The data reflects a pattern of strong, seasonally influenced sales performance, with net sales peaking during typical high-demand retail periods. The steady rise in stockholders’ equity indicates robust financial health and effective capital management. The downward trend in equity turnover highlights a relative slowdown in the efficiency of equity usage to generate sales, which could warrant further investigation to ensure sustainable growth. The temporary fluctuations in the equity turnover may be attributable to market conditions or strategic initiatives impacting sales volumes or equity levels.