Costco Wholesale Corp (COST)
Debt-to-capital ratio
| Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | Sep 1, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 5,377,000 | 6,484,000 | 6,692,000 | 7,514,000 | 5,124,000 |
| Total stockholders’ equity | US$ in thousands | 25,058,000 | 20,642,000 | 17,564,000 | 18,284,000 | 15,243,000 |
| Debt-to-capital ratio | 0.18 | 0.24 | 0.28 | 0.29 | 0.25 |
September 3, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $5,377,000K ÷ ($5,377,000K + $25,058,000K)
= 0.18
The debt-to-capital ratio measures the proportion of a company's capital structure that is financed by debt. A lower ratio indicates that the company relies less on debt to finance its operations and growth. Looking at Costco Wholesale Corp's debt-to-capital ratio over the past five years, we observe a declining trend from 0.31 in 2019 to 0.20 in 2023. This suggests that the company has been reducing its reliance on debt financing in comparison to its total capital over the years. The decreasing trend is a positive sign, as it signifies an improvement in the company's financial leverage and potentially lowers the overall risk associated with its capital structure. This trend may indicate that Costco has been effectively managing its capital structure and maintaining a healthier balance between debt and equity. However, it is essential to consider additional financial metrics and qualitative factors to comprehensively evaluate the company's overall financial health and inherent risk level.
Peer comparison
Sep 3, 2023