Costco Wholesale Corp (COST)
Fixed asset turnover
| Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | Sep 1, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 242,290,000 | 226,954,000 | 195,929,000 | 166,761,000 | 152,703,000 |
| Property, plant and equipment | US$ in thousands | 26,684,000 | 24,646,000 | 23,492,000 | 21,807,000 | 20,890,000 |
| Fixed asset turnover | 9.08 | 9.21 | 8.34 | 7.65 | 7.31 |
September 3, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $242,290,000K ÷ $26,684,000K
= 9.08
Costco Wholesale Corp's fixed asset turnover ratio measures the company's efficiency in generating sales from its investments in fixed assets. The fixed asset turnover is calculated by dividing net sales by average fixed assets.
Looking at the trend over the past five years, there has been a consistent improvement in Costco's fixed asset turnover ratio. In fiscal year 2019, the ratio stood at 7.31 and has since increased steadily to reach 9.08 in the most recent period ending September 3, 2023.
This improvement indicates that Costco has been able to generate more sales from its fixed assets over the years. It suggests that the company has effectively managed and utilized its property, plant, and equipment to generate revenue.
A high fixed asset turnover ratio typically signifies that the company is efficiently utilizing its fixed assets to generate sales. This can be attributed to factors such as effective management of inventory, efficient production processes, and effective use of the company's physical assets.
Given the upward trajectory of the fixed asset turnover ratio, it indicates that Costco has been able to improve its operational efficiency and make better use of its fixed assets to drive sales. This trend is generally viewed positively by investors and indicates that the company is making good use of its investment in fixed assets.
Peer comparison
Sep 3, 2023