Costco Wholesale Corp (COST)

Debt-to-capital ratio

		Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020
Long-term debt	US$ in thousands	5,794,000	5,377,000	6,484,000	6,692,000	7,514,000
Total stockholders’ equity	US$ in thousands	23,622,000	25,058,000	20,642,000	17,564,000	18,284,000
Debt-to-capital ratio		0.20	0.18	0.24	0.28	0.29

September 1, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $5,794,000K ÷ ($5,794,000K + $23,622,000K)
= 0.20

The debt-to-capital ratio of Costco Wholesale Corp has shown a declining trend over the past five years, decreasing from 0.29 in 2020 to 0.20 in 2024. This indicates that the company has been reducing its reliance on debt to finance its operations and investments in relation to its total capital structure. A lower debt-to-capital ratio suggests that Costco's financial position has strengthened over the years, as a smaller portion of its capital is funded by debt.

The declining trend in the debt-to-capital ratio may be attributable to Costco's ability to generate sufficient internal funds to support its growth and operations, leading to reduced borrowing requirements. This trend can also reflect prudent financial management and a conservative approach to debt financing, which may help mitigate the company's financial risks.

Overall, Costco's decreasing debt-to-capital ratio indicates a healthier balance between debt and equity in its capital structure, which could enhance its financial stability and resilience to economic uncertainties. This trend may also be viewed positively by investors and creditors as it reflects Costco's improving financial health and efficient capital management.