As a distinctive characteristic, solvency tells more about long-term heath where a stable company is deemed stronger than an unstable one. For Costco Wholesale profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Costco Wholesale to generate income relative to revenue, assets, Costco's long-term debt-to-equity ratio is high, but it is reasonable as the company's time-interest earned ratio is high. Based on Costco Wholesales balance sheet as of June 4, 2020, long-term debt is at $7.60 billion and current debt is at $1.50 billion, amounting to $9.10 billion in total debt. Investing-$1.0B. Costco Wholesale has a twelve month low of $375.50 and a twelve month high of $612.27. 3.04. Operating. Because Target is depending largely on debt as you will see in our ratios 4. Long term debt can be defined as the sum of all long term debt fields. The company has a current ratio of 1.04, a quick ratio of 0.48 and a debt-to-equity ratio of 0.32. Financing-$676.0M. A debt ratio of more than 1 means the company actually has more debt than the company is worth. Ignoring the impact of negative FX and gas price deflation, the comparable sales were positive 6%. Costco has been able to generate the most stable returns on its capital expenditures in the last 3 years and plans to invest $2.8-3 billion through FY16-18, opening new warehouses. Latest report. Walmart (WMT) has a mix of debt and equity in its capital structure. Capital structure ratios include debt to equity and debt to asset ratios, and liquidity ratios include coverage ratios and solvency ratios. Source: Financials are provided by Nasdaq Data Link and sourced from the audited annual ( 10-K) and quarterly ( 10-Q) reports submitted to the Costco long term debt for the quarter This COST page provides a table containing critical financial ratios such as P/E Ratio, EPS, ROI, and others. Costco's D/E ratio stands at an impressive 47.5%. Costco Wholesale PEG Ratio as of today (July 06, 2022) is 3.66. Best Mutual Funds; Debt-to-equity ratio (most recent) Average. 100% free, no signups. The EV/EBITDA NTM ratio of Costco Wholesale Corporation is significantly higher than the average of its sector (Broadline Retailers): 7.92. A D/E ratio of 1 means its debt is equivalent to its common equity. 0.65%. 1/31/2021 (filed 3/10/2021) Revenue. Now lets take one more to understand formula of interest expense and cost of debt. The company has a debt-to-equity ratio of 0.32, a current ratio of 1.04 and a quick ratio of 0.48. In the same fiscal year, Walmart Inc. had a ROE of 30.05%, a ROA of 15.20%, and a book value of equity of $1.8 Billion. a) Use this data to compute Costco's ROE using the DuPont Identity. Target might have the highest debt-to-equity ratio of the three, but it's still healthy and it has managed to reduce stock was originally listed at a price of $22.32 in Dec 31, 1997. Costco. The long-term debt-to-equity ratio increased significantly from 19% in 2000 to 45% in 2015, as shown in Table 1. The firm owned 68,172 shares of the retailers stock after selling 473 shares during the period. Investing. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. As of the second quarter of fiscal 2022, The company's $11.8 billion cash position exceeds its $9.2 billion in debt. A D/E ratio greater than 1 indicates that a company has more debt than equity. This is a simple example, but after calculating this ratio, we would be able to know how much assets are financed by equity and how much assets are financed by debt. The cost of equity is higher than the cost of debt because the cost associated with borrowing debt (interest expense) is tax deductible, creating a tax shield. Additionally, the cost of equity is typically higher because unlike lenders, equity investors are not guaranteed fixed payments, and are last in line at liquidation. Upgrade. Costco market cap is $214.8 b, and annual revenue was $195.93 b in FY 2021. Share Holder Equity. Healthy Debt to Equity Financials. 0.93. 2.16. Calculated as: Total Long-Term Debt / (Total Long-Term Debt + Shareholders Equity) Costco Wholesale Corporation (COST) had Debt to Capital Ratio of 0.27 for the most Its total equity is $20,000. This ratio indicates that as Costco has grown and expanded, so has its debt. School New York University; Course Title TCHT1-UC 1010; Uploaded By rosetti; Pages 20 Ratings 88% (8) 7 out of 8 people found this As of 2021 they employed 288.00k people. Debt Coverage : COST's debt is well covered by operating cash flow Costco Wholesale Corporation directly competes with Wal-Mart stores and its subsidiary Sams Club, Target Stores, Kroger, BJ's Wholesale Club, and indirectly competes with e-commerce businesses such as Amazon.com etc. 20.45. Comparison analysis based on SEC data. Liquidity Ratios; Current Ratio : 1.03. The Investor Relations website contains information about Costco Wholesale Corporation's business for stockholders, potential investors, and financial analysts. This ratio is calculated by dividing the firms total long-term debt by its total available capital. Debt-To-Capital Ratio = Debt / (Debt + Shareholders Equity) 0.099: 0.33: 0.29: Operating Margin Ratio = Operating Income / Net Sales: 2.78%: 3.16%: Costcos Brand Equity from 2017 to 2021 Appendix E Customer demographics of Costco vs other major competitors Appendix F Costcos Business Model Canvas Costco Wholesale Corporation key financial stats and ratios. A performance evaluation will be conveyed through ratio analysis; Costcos profitability, liquidity and solvency, efficiency, and effectiveness will be viewed. The debt to equity ratio measures Cost of Debt = Interest Expense (1- Tax Rate) Cost of Debt = $16,000 (1-30%) Cost of Debt = $16000 (0.7) Cost of Debt = $11,200. Total Debt to Total Equity 64.95: Total Debt to Total Capital 39.37: Total Debt to Total Assets 19.25: Interest Coverage 42.68: Long-Term Debt to Equity 58.72: Long-Term Debt to Total $1.2B. Return on Investment Ratios The return on investment ratios are strong for Costco and show a Surprise! This gives Costco the option to incorporate further debt in its capital structure, thereby reducing the total cost of capital. Get average debt to equity ratio charts for Costco Wholesale (COST). For FY 2017, Costco's debt-to-capital was 0.38, debt-to equity 0.62. Costco Wholesale Corporation-Brief Overview Introuduction of Costco Wholesale Corporation Corporate History Affects of sub-prime mortgage crisis of 2007-2008 5. Start with the parts that you identified in Step 1 and plug them into this formula: Debt to Equity Ratio = Total Debt Total Equity. Current and historical debt to equity ratio values for Costco (COST) over the last 10 years. Costco Wholesale Corp. company facts, information and financial ratios from MarketWatch. The company has an Enterprise Value to EBITDA ratio of 21.71. Ideally, it As evident from the calculation above, the DE ratio of Walmart is 0.68 times. Cash flow. Debt-to-equity ratio : 2.16. Take note that some businesses are more capital intensive than others. In order to calculate a company's long term debt to capitalization ratio, you can use the following equation: LT Debt to Capitalization Ratio = Long-term Debt / Total Available Capital. The long-term debt-to-equity ratio increased significantly from 19% in 2000 to 45% in 2015, as shown in Table 1. Debt-To-Capital Ratio = Debt / (Debt + Shareholders Equity) 0.099: 0.33: 0.29: Operating Margin Ratio = Operating Income / Net Sales: 2.78%: 3.16%: Costcos Brand Or, Multiplier = $100,000 / $20,000 = 5. Costco Wholesale has a twelve month low of $375.50 and a twelve The shareholder equity ratio is calculated by dividing the shareholders equity by the total assets (current and non-current assets) of the company. What this indicates is that for each dollar of Equity, the company has Debt of $0.68. Recovered in 2014 Stock prices fell down by 54% in 2008 FY. A debt ratio of less than 1 means the company has more assets than the debt it owes. The financial strengths were found at the Costcos debt to equity ratio, return on assets ratio, return on equity ratio, return on capital employed ratio, interest coverage ratio, days sales A company's income, or the lack of it, affects its ability to obtain debt and equity financing, its liquidity position, and its ability to grow. Asset Advisors Investment Management LLC cut its holdings in shares of Costco Wholesale Co. (NASDAQ:COST Get Rating) by 0.7% in the first quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). What Is Costco Wholesale's Debt? WMT Debt to Equity Ratio (Annual) data by YCharts. COST 463.31 -8.74(-1.85%) The ratio for Costco in 2017 was 0.70 and only slightly decreased to 0.68 in 2018. Shareholders equity is the companys book value or the value of the assets minus its liabilities from shareholders contributions of capital. Costcos debt to equity to its competitors it can be. Costco is doing well by keeping the long-term debt ratio (average) around 0. Disclaimer 3; Forward 4; Company Follow Costco's earnings. Follow Costco's earnings. Discover details on Costco Wholesale Corps annual and quarterly financial performance covering key metrics like revenue, net income, growth ratios, equity ratios, profitability ratios, cost ratios, liquidity ratios, leverage ratios and so on. 1.25. In depth view into COST Debt-to-Equity explanation, calculation, historical data and more Costco Wholesale Debt-to In depth view into COST PEG Ratio explanation, calculation, historical data and more Rankings and Tools. A debt to income ratio less than 1 indicates that a company has more equity than debt. The company has a current ratio of 1.04, a quick ratio of 0.48 and a debt-to-equity ratio of 0.32. Cost of debt of the company is $11,200. Some financial ratio that investor might use are profitability ratio and debt to equity ratio. Compare the average debt to equity ratio of Costco Wholesale COST and Home Depot HD. The debt to equity ratio of Costco is 0.34. Table of Contents. The debt ratio tells you what percentage of a companys total assets were funded by incurring debt. Based on Money. View Costco stock / share price, financial statements, key ratios and more at Craft. By comparison, Target's D/E ratio of 118.1% indicates its debt load has overtaken the value of its equity. Debt to Equity thus makes a valuable metrics that The debt to equity ratio can be calculated by dividing the present total liabilities of a company by shareholders equity. 08, which means its assets See charts, data and financials for Costco Wholesale Corp COST. = $54,170 /$ 79,634 = 0.68 times. Costco Wholesale Debt-to-Equity as of today (July 02, 2022) is 0.45. The result is the debt-to-equity ratio. Costco Wholesale PEG Ratio as of today (July 06, 2022) is 3.66. While a debt-to-equity ratio of 60% is not bad for a company of Costcos size, I would start to be concerned if the ratio gets above 100%. Costco Wholesale [] Controladora Comercial Mexicana, Total Liabilities. The net worth of the corporation or enterprise represents its equity, or what the entity owns less what the entity owes. The lender converts a loan amount or a loan amount represented by outstanding bonds into equity shares when it's converting debt to equity. No actual cash is exchanged in the debt-to-equity swap. Popular Course in this category. Costco Wholesale has $51.73 billion in total assets, therefore making the debt-ratio 0.18. The company has a current ratio of 1.03, a quick ratio of 0.51 and a debt-to-equity ratio of 0.33. Ratio between above two values = (Total Debt / Total Shareholder Equity) = 0.43. Costcos Debt Ratios 48; Debt Ratio 48; Debt to Equity Ratio 49; Times Interest Earned 50; Costco 2020 Financial Report. The company has a debt-to-equity ratio of 0.32, a current ratio of 1.04 and a quick ratio of 0.48. Over the past 5-year time, the total debt compound annual growth rate was Both these stocks have fared better than the broader S&P, which declined by 20% since early February. This COST page provides a table containing critical financial ratios such as P/E Ratio, EPS, ROI, and others. The debt to equity ratio can be calculated by dividing the present total liabilities of a company by shareholders equity. Get comparison charts for value investors! This is the combination of total debts and total equity. COST price-to-sales ratio is 0.98. Debt to Equity ratio = Total Debt/ Total Equity. In depth view into Costco Wholesale Debt to Equity Ratio (Annual) including historical data from 1982, charts and stats. Costco Wholesale Co. has a 1 year low of $397.11 and a 1 year high of The debt to equity ratio is calculated by dividing the total long-term debt of the business by the book value of the shareholders equity of the business or, in the case of a sole proprietorship, the owners investment: Debt to Equity = (Total Long-Term Debt)/Shareholders Equity. Total Debt to Equity MRQ: 32.97%: 107.52: Tons of For Costco Wholesale profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Costco Wholesale to generate income relative to revenue, assets, Interest coverage ratio : 45.54. 15 Cash Debt Coverage Costcos free cash flow, current cash debt coverage, and cash debt coverage can be seen in the table below (42). The retailers (XRT) total debt, both short and long-term, is ~$56.6 billion. Total debt of Costco significantly grew from USD 5.5 Billion in 2016 to USD 7.6 Billion in 2020. Debt to Equity Ratio for Costco Wholesale is calculated as follows: Total Debt [ $10.115 B] (/) Total Common Equity [ $18.463 B ] (=) Debt / Equity Ratio [ 54.8% ] The tables below summarizes the trend in Costco Wholesales debt to equity ratio over the last five years: Controladora Comercial Mexicana, when Costco acquired its 50% equity interest in Costco Mexico (22). As you can see below, at the end of February 2021, Costco Wholesale had US$7.36b of debt, up from US$5.60b a year ago. Industry (SIC) 5331 - Variety Stores. If you To calculate this ratio, we simply divide the companys net sales by its average shareholders equity. All values USD Millions. Costco Wholesale Co. has a 1 year low of $397.11 and a 1 year high of $612.27. 2.03. Get comparison charts for value investors! Costco's quick and current ratios slightly increased therefore its liquidity has declined. Reducing Debt: COST's debt to equity ratio has reduced from 39.5% to 32.1% over the past 5 years. Equity Multiplier Examples. 2.16. The debt-to-equity ratio illustrates how much of the company's financing comes from creditors and investors. Long Term Debt Maturing within 1 Year: 800.00 95.00 90.00 86.00 0.00 0.00 0.00 Long Term Debt Maturing in Year 2: 91.00 800.00 91.00 0.00 0.00 Long Term Debt Maturing in Year 3: quarterly yearly. Want to continue viewing company data? Get 20 years of historical debt to equity ratio charts for COST stock and other companies. The company also has $1,000,000 of total equity. The company has a current ratio of 1.03, a quick ratio of 0.51 and a debt-to-equity ratio of 0.33. Price to earnings ratio. 100% free, no signups. Get debt to equity ratio charts for Costco Wholesale (COST). The interest-bearing debt ratio, or debt to equity ratio, is calculated by dividing the total long-term, interest-bearing debt of the company by the equity value. Get 20 years of historical average debt to equity ratio charts for COST stock and other 1.90%. Costco long term debt from 2010 to 2022. The ratio does this by calculating the proportion of the companys debts as part of the companys total assets. Debt to Equity Ratio for Costco Wholesale is calculated as follows: Total Debt [ $10.115 B] (/) Total Common Equity [ $18.463 B ] (=) Debt / Equity Ratio [ 54.8% ] The tables below 1.03. It indicates that Costco has less than half liabilities in comparison with its equity or it can be said that the creditors provide A ratio of 68% means that creditors have provided financing sufficient to cover 68% of the Additionally, the added debt has eaten away at the equity value of the company, which has Costco's liabilities-to-equity ratio increased during 2016 thus its solvency has improved. Transcribed image text: For fiscal year 2017, Costco Wholesale Corporation (COST) had a net profit margin of 2.08%, asset turnover of 3.55, and a book equity multiplier of 3.37. In depth view into COST PEG Ratio explanation, calculation, historical data and more upit nije izvrsen zbog: broj greske=1054; greska=Unknown column 'balance.shdebt' in 'field list' upit=CREATE TEMPORARY TABLE t1 SELECT (100 * ((balance.shdebt + balance.longdebt Using debt to equity ratio as an expression of solvency, Costco reflected 0.98, 0.88, 0.91 and 1.27 for the years 2004, 2005, 2006 and 2007 respectively or a four-year average of 1.01. Costco Wholesale Debt to Equity Ratio: 0.3297 for May 31, 2022. Formula. A higher result signifies that more creditor financing (bank loans) is used versus investor financing (shareholders). Despite the fact that COST's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs. The businesss 50 day simple moving average is $477.95 and its two-hundred Compare the average debt to equity ratio of Costco Wholesale COST and Home Depot HD. Quick Ratio (MRQ) 0.48: Quick Ratio (FY) 0.52: Current Ratio (MRQ) 1.04: LT Debt to Equity (MRQ) (%) 32.59: LT Debt to Equity (MRQ) (%) 32.59: LT Debt to Equity (FY) (%) 43.68: Total Debt to equity (including operating lease liability) = Total debt (including operating lease liability) Total Costco stockholders equity = = 2 Click competitor name to see Current Ratio Lets say that Company Z has total assets of $100,000. Debt to equity (including operating lease liability) = Total debt (including operating lease liability) Total Costco stockholders equity = = 2 Click competitor name to see calculations. 15 Cash Debt Coverage Costcos free cash flow, current cash debt coverage, and cash debt coverage can be seen in the table below (42). Costco's times interest earned is high thus there is concern for Costco's solvency. Quick Ratio : 0.46. A higher debt-to-equity ratio indicates that a company has higher debt, while a lower debt-to-equity ratio signals fewer debts. Generally, a good debt-to-equity ratio is less than 1.0, while a risky debt-to-equity ratio is greater than 2.0. What is the ideal debt-to-equity ratio? Generally, a good debt-to-equity ratio is around 1 to 1.5. Company Name. In COSTs case, the ratio of 59.71x 44.87. Debt ratio is a measurement that indicates how much leverage a company uses to finance its operation by using debt instead of its truly owned capital or equity. The lower long-term debt is the better ability a firm has to pay its debt. Costco Wholesale Corporation. This ratio indicates that as Costco has grown and expanded, so has its 45.54. In order to calculate the sales to equity ratio, you can use the following formula: Sales to Equity Ratio = Net Sales / Average Shareholders Equity. Calculate equity multiplier. We 2021 2020 2019 2018 2017 5-year trend; ST Debt & Current Portion LT Debt: 1,093: 357: 1,725: 97: 93 For example, suppose a company has $300,000 of long-term interest bearing debt. The financial strengths were found at the Costco's debt to equity ratio, return on assets ratio, return on equity ratio, return on capital employed ratio, interest coverage ratio, The figures required to calculate the shareholder equity ratio are available on the companys balance sheet. Generally speaking, a debt-ratio more than 1 means that a large portion of debt is Long-Term Debt to Equity: 58.72: Long-Term 7.03%. $178,626 million (ranked #2 out of 15 companies in the industry)