Costco Wholesale Corp (COST)
Financial leverage ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 69,831,000 | 67,911,000 | 66,323,000 | 73,723,000 | 68,994,000 | 66,752,000 | 66,848,000 | 66,027,000 | 64,166,000 | 63,852,000 | 63,078,000 | 64,149,000 | 59,268,000 | 57,274,000 | 54,918,000 | 60,217,000 | 55,556,000 | 51,732,000 | 48,782,000 | 51,431,000 |
| Total stockholders’ equity | US$ in thousands | 23,622,000 | 21,771,000 | 20,760,000 | 26,147,000 | 25,058,000 | 23,568,000 | 22,794,000 | 21,471,000 | 20,642,000 | 19,968,000 | 19,418,000 | 18,463,000 | 17,564,000 | 16,482,000 | 15,652,000 | 14,860,000 | 18,284,000 | 16,802,000 | 16,614,000 | 15,861,000 |
| Financial leverage ratio | 2.96 | 3.12 | 3.19 | 2.82 | 2.75 | 2.83 | 2.93 | 3.08 | 3.11 | 3.20 | 3.25 | 3.47 | 3.37 | 3.47 | 3.51 | 4.05 | 3.04 | 3.08 | 2.94 | 3.24 |
September 1, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $69,831,000K ÷ $23,622,000K
= 2.96
Costco Wholesale Corp's financial leverage ratio has shown some fluctuations over the past several quarters, ranging from 2.75 to 4.05. The ratio measures the extent to which the company is utilizing debt to finance its operations and investments, with higher ratios indicating a higher level of financial leverage.
The trend indicates that Costco has been gradually increasing its financial leverage over the periods analyzed, reaching a peak of 4.05 in the most recent quarter. This could suggest that the company has been relying more on debt to fund its growth and expansion initiatives.
A high financial leverage ratio can be beneficial as it allows a company to benefit from the tax-deductibility of interest expenses and potentially amplify returns for shareholders. However, it also increases the financial risk as higher debt levels mean increased interest payments and potential challenges in meeting debt obligations, particularly during economic downturns or periods of financial stress.
Investors and analysts should closely monitor Costco's financial leverage ratio along with other financial metrics to assess the company's overall financial health and risk profile.
Peer comparison
Sep 1, 2024