Costco Wholesale Corp (COST)
Profitability ratios
Return on sales
| Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 3.61% | 3.28% | 3.33% | 3.40% | 3.24% |
| Operating profit margin | 3.65% | 3.35% | 3.43% | 3.42% | 3.26% |
| Pretax margin | 3.83% | 3.50% | 3.42% | 3.37% | 3.18% |
| Net profit margin | 2.90% | 2.60% | 2.57% | 2.56% | 2.40% |
Costco Wholesale Corp's profitability ratios have shown a generally positive trend over the past five years. The gross profit margin, which measures the percentage of revenue that exceeds the cost of goods sold, has exhibited improvement, reaching 3.61% in September 2024 compared to 3.24% in August 2020.
Similarly, the operating profit margin, which indicates how much of each dollar of revenue is left over after operating expenses are deducted, has also increased steadily, with a figure of 3.65% in September 2024, up from 3.26% in August 2020.
The pretax margin, reflecting the percentage of each dollar of sales that results in pretax profit, has seen a positive trajectory as well, hitting 3.83% in September 2024 compared to 3.18% in August 2020.
Lastly, the net profit margin, depicting the portion of revenue that translates into net income, has also displayed growth, standing at 2.90% in September 2024 versus 2.40% in August 2020.
Overall, Costco Wholesale Corp's profitability ratios indicate an upward trend, showcasing improved efficiency in managing costs and generating profit over the analyzed period.
Return on investment
| Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.30% | 11.76% | 12.15% | 11.32% | 9.78% |
| Return on assets (ROA) | 10.55% | 9.12% | 9.11% | 8.45% | 7.20% |
| Return on total capital | 33.69% | 28.41% | 29.22% | 27.95% | 21.20% |
| Return on equity (ROE) | 31.19% | 25.11% | 28.31% | 28.51% | 21.89% |
Costco Wholesale Corp's profitability ratios have shown a positive trend over the past five years, indicating strong operational efficiency and financial performance.
1. Operating return on assets (Operating ROA) has increased consistently from 9.78% in August 2020 to 13.30% in September 2024. This ratio measures how efficiently the company generates operating income from its assets, and the upward trend suggests that Costco is effectively utilizing its assets to generate profits.
2. Return on assets (ROA) has also shown a consistent improvement, increasing from 7.20% in August 2020 to 10.55% in September 2024. This ratio reflects the overall profitability of the company relative to its total assets, indicating that Costco is generating a higher level of income per dollar of assets held.
3. Return on total capital has demonstrated significant growth, rising from 21.20% in August 2020 to 33.69% in September 2024. This ratio highlights the company's ability to generate returns for both its equity and debt holders, showing that Costco is effectively leveraging its capital structure to drive profitability.
4. Return on equity (ROE) has also exhibited a positive trend, increasing from 21.89% in August 2020 to 31.19% in September 2024. This ratio measures the return generated on shareholders' equity investment, indicating that Costco is delivering strong returns to its shareholders.
Overall, Costco's profitability ratios reflect a consistent improvement in operational efficiency and financial performance, demonstrating the company's ability to generate higher returns on assets, capital, and equity over the past five years.