Costco Wholesale Corp (COST)

Activity ratios

Short-term

Turnover ratios

	Feb 18, 2024	Nov 26, 2023	Sep 3, 2023	May 7, 2023	Feb 12, 2023	Nov 20, 2022	Aug 28, 2022	May 8, 2022	Feb 13, 2022	Nov 21, 2021	Aug 29, 2021	May 9, 2021	Feb 14, 2021	Nov 22, 2020	Aug 30, 2020	May 10, 2020	Feb 16, 2020	Nov 24, 2019	Sep 1, 2019	May 12, 2019
Inventory turnover	10.62	6.95	7.33	7.50	10.78	12.03	12.25	8.50	8.65	8.02	9.07	12.90	12.46	11.22	13.18	13.83	12.42	10.19	11.96	12.11
Receivables turnover	89.54	96.64	106.04	94.10	86.36	99.93	101.27	109.26	94.18	105.12	108.67	117.01	92.36	105.06	107.59	106.75	79.65	90.40	99.48	87.80
Payables turnover	10.37	6.14	6.98	7.27	10.56	12.18	12.29	8.49	8.34	6.95	7.92	11.60	12.01	9.82	11.38	14.08	13.29	9.75	11.67	12.08
Working capital turnover	—	74.17	105.53	91.22	129.21	213.32	325.15	187.05	206.10	399.77	3,061.39	—	—	—	50.90	65.00	157.09	409.19	615.74	—

Costco Wholesale Corp has shown a fluctuation in its activity ratios over the periods indicated.

- Inventory turnover has ranged from a low of 6.95 to a high of 13.83. The higher inventory turnover ratios suggest that Costco is efficiently managing its inventory levels and selling goods at a quick pace.

- Receivables turnover has varied between 79.65 and 117.01. This indicates the speed at which Costco collects on credit sales, with higher ratios implying a more efficient collections process.

- Payables turnover has fluctuated between 6.14 and 14.08. A higher payables turnover ratio suggests that Costco is paying its suppliers quickly, which could indicate good relationships with suppliers but may also imply potential cash flow challenges.

- The working capital turnover has shown significant variability, with some periods showing negative values. A high working capital turnover ratio may indicate that Costco is efficiently using its working capital to generate sales, while negative values may require further investigation.

Overall, these activity ratios suggest that Costco Wholesale Corp has been effectively managing its inventory, receivables, payables, and working capital, albeit with some fluctuations in efficiency over the periods analyzed.

Average number of days

		Feb 18, 2024	Nov 26, 2023	Sep 3, 2023	May 7, 2023	Feb 12, 2023	Nov 20, 2022	Aug 28, 2022	May 8, 2022	Feb 13, 2022	Nov 21, 2021	Aug 29, 2021	May 9, 2021	Feb 14, 2021	Nov 22, 2020	Aug 30, 2020	May 10, 2020	Feb 16, 2020	Nov 24, 2019	Sep 1, 2019	May 12, 2019
Days of inventory on hand (DOH)	days	34.35	52.55	49.82	48.64	33.87	30.34	29.79	42.95	42.20	45.50	40.25	28.29	29.30	32.54	27.70	26.40	29.39	35.81	30.53	30.15
Days of sales outstanding (DSO)	days	4.08	3.78	3.44	3.88	4.23	3.65	3.60	3.34	3.88	3.47	3.36	3.12	3.95	3.47	3.39	3.42	4.58	4.04	3.67	4.16
Number of days of payables	days	35.20	59.43	52.31	50.21	34.55	29.98	29.69	43.02	43.75	52.53	46.09	31.46	30.39	37.16	32.06	25.92	27.46	37.42	31.29	30.22

Based on the activity ratios of Costco Wholesale Corp over the specified time periods, we observe the following trends:

1. Days of Inventory on Hand (DOH):
- Costco showed a fluctuating trend in the days of inventory on hand, with significant variations over time.
- In general, there was a mix of higher and lower DOH figures, indicating fluctuations in the efficiency of managing inventory levels.
- The most recent figure of 34.35 days (Feb 18, 2024) shows an increase in inventory days compared to the previous period (Nov 26, 2023), suggesting a potential buildup of inventory.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding for Costco remained relatively stable over the specified periods, indicating consistent credit management practices.
- The DSO figures were generally low, reflecting efficient collections processes and a strong customer base.
- The company managed to keep DSO below 5 days, demonstrating effective accounts receivable management.

3. Number of Days of Payables:
- Costco's number of days of payables also exhibited some fluctuations, but with a more consistent overall trend compared to inventory days.
- Payables were extended over a varying number of days, with some periods showing longer payable days than others.
- The company appeared to effectively manage its payable days to maintain a balance between cash flow optimization and supplier relationships.

Overall, Costco Wholesale Corp demonstrated efficiency in managing its inventory levels, maintaining a relatively stable collection period, and effectively managing its payables to support its operations and financial health.

Long-term

	Feb 18, 2024	Nov 26, 2023	Sep 3, 2023	May 7, 2023	Feb 12, 2023	Nov 20, 2022	Aug 28, 2022	May 8, 2022	Feb 13, 2022	Nov 21, 2021	Aug 29, 2021	May 9, 2021	Feb 14, 2021	Nov 22, 2020	Aug 30, 2020	May 10, 2020	Feb 16, 2020	Nov 24, 2019	Sep 1, 2019	May 12, 2019
Fixed asset turnover	9.02	9.04	9.08	9.08	9.11	9.19	9.21	9.01	8.74	8.50	8.34	8.05	7.93	7.76	7.65	7.47	7.37	7.28	7.31	7.31
Total asset turnover	3.75	3.33	3.51	3.53	3.51	3.50	3.54	3.41	3.33	3.17	3.31	3.26	3.25	2.87	3.00	3.11	3.25	3.01	3.36	3.42

Costco Wholesale Corp's fixed asset turnover has remained relatively stable over the past few quarters, ranging between 7.28 to 9.21. This indicates that the company generates a consistent level of sales revenue in relation to its fixed assets, reflecting efficient utilization of fixed assets to generate sales.

On the other hand, Costco's total asset turnover has shown more variability, ranging from 2.87 to 3.75. A higher total asset turnover implies better efficiency in generating sales from all assets, not just fixed assets. Despite some fluctuations, the general trend suggests that Costco has been effective in utilizing its total assets to generate revenue.

Overall, Costco Wholesale Corp's long-term activity ratios indicate strong operational efficiency in utilizing both fixed and total assets to generate sales revenue, with a consistent performance in fixed asset turnover and some variability in total asset turnover over the analyzed periods.