Costco Wholesale Corp (COST)
Liquidity ratios
| Sep 1, 2024 | May 12, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.97 | 0.94 | 0.93 | 1.09 | 1.07 | 1.08 | 1.06 | 1.03 | 1.02 | 1.04 | 1.03 | 1.02 | 1.00 | 1.00 | 0.99 | 0.98 | 1.13 | 1.11 | 1.04 | 1.01 |
| Quick ratio | 0.39 | 0.40 | 0.38 | 0.55 | 0.52 | 0.51 | 0.50 | 0.42 | 0.42 | 0.43 | 0.46 | 0.46 | 0.47 | 0.45 | 0.42 | 0.49 | 0.60 | 0.58 | 0.47 | 0.45 |
| Cash ratio | 0.31 | 0.33 | 0.30 | 0.49 | 0.45 | 0.43 | 0.42 | 0.35 | 0.35 | 0.37 | 0.39 | 0.40 | 0.41 | 0.40 | 0.35 | 0.44 | 0.54 | 0.52 | 0.38 | 0.38 |
Costco Wholesale Corp's liquidity ratios show varying levels of short-term financial health over the past several quarters.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been fluctuating around 1. This indicates that Costco may have struggled with maintaining a comfortable level of liquidity to cover its short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows inconsistency, hovering around 0.5. This suggests that Costco's ability to quickly cover its current liabilities with its most liquid assets like cash and receivables has been moderately weak.
The cash ratio, which specifically focuses on the company's ability to cover its current liabilities with available cash and cash equivalents, has shown a similar trend to the quick ratio, with levels around 0.4. This indicates that Costco has had a relatively lower proportion of cash on hand to meet its short-term obligations.
Overall, the liquidity ratios of Costco Wholesale Corp point to some challenges in maintaining optimal levels of short-term liquidity, which may require closer monitoring and management of working capital to ensure the company's financial stability.
See also:
Costco Wholesale Corp Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Sep 1, 2024 | May 12, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 2.75 | 1.61 | 3.44 | 0.16 | 2.15 | 3.03 | 3.70 | 4.02 | 3.70 | 3.27 | 2.33 | -3.56 | -2.48 | -0.05 | 2.86 | -1.14 | -0.97 | 3.89 | 6.51 | 2.43 |
The cash conversion cycle of Costco Wholesale Corp has fluctuated over the periods analyzed. A positive cash conversion cycle indicates that the company is taking more time to convert its investments in inventory and receivables into cash, which may lead to liquidity challenges. The longest cash conversion cycle occurred on Feb 12, 2023, with 4.02 days, suggesting a slower turnover of inventory and receivables during that period. On the other hand, negative cash conversion cycles, like on Nov 21, 2021, and Feb 13, 2022, imply that the company is efficiently managing its working capital, potentially through quick inventory turnover and collection of receivables.
Overall, Costco's cash conversion cycle has exhibited variability, indicating fluctuations in inventory management and collection of receivables, which might be influenced by seasonal factors or operational adjustments. Monitoring and analyzing these trends can provide insights into the company's efficiency in managing its resources and potential cash flow challenges.