Costco Wholesale Corp (COST)
Solvency ratios
| 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 | Sep 1, 2019 | May 12, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.09 | 0.08 | 0.08 | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | 0.11 | 0.10 | 0.11 | 0.13 | 0.14 | 0.13 | 0.14 | 0.15 | 0.10 | 0.10 | 0.11 | 0.11 |
| Debt-to-capital ratio | 0.22 | 0.18 | 0.18 | 0.22 | 0.22 | 0.23 | 0.24 | 0.25 | 0.26 | 0.27 | 0.28 | 0.31 | 0.32 | 0.34 | 0.29 | 0.31 | 0.23 | 0.24 | 0.25 | 0.25 |
| Debt-to-equity ratio | 0.28 | 0.22 | 0.21 | 0.28 | 0.29 | 0.30 | 0.31 | 0.33 | 0.34 | 0.36 | 0.38 | 0.45 | 0.48 | 0.51 | 0.41 | 0.45 | 0.31 | 0.32 | 0.34 | 0.33 |
| Financial leverage ratio | 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 | 2.98 | 3.02 |
Costco Wholesale Corp's solvency ratios show a consistent trend of maintaining a low level of debt relative to its total assets over the periods analyzed. The debt-to-assets ratio ranged between 0.08 and 0.15, indicating that, on average, only around 8% to 15% of the company's assets were financed by debt.
The debt-to-capital ratio, which considers both debt and equity in the capital structure, ranged from 0.18 to 0.34. This ratio suggests that debt constituted around 18% to 34% of the company's total capital, with equity making up the remainder.
The debt-to-equity ratio ranged from 0.21 to 0.51, indicating that Costco relied more on equity financing compared to debt. This ratio highlights how much debt the company is using to finance its operations in relation to shareholders' equity.
The financial leverage ratio, which reflects the company's total assets relative to equity, ranged between 2.75 and 4.05. This ratio demonstrates Costco's ability to generate higher returns on equity through leverage but also signals a moderate level of financial risk.
Overall, Costco's solvency ratios indicate a prudent approach to managing debt and capital structure, maintaining a healthy balance between debt and equity to support its operations and growth.
Coverage ratios
| 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 | Sep 1, 2019 | May 12, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 54.08 | 54.80 | 54.04 | 53.83 | 54.42 | 52.40 | 50.17 | 47.48 | 45.07 | 41.22 | 39.64 | 37.44 | 35.17 | 36.21 | 34.19 | 33.05 | 33.23 | 32.85 | 32.47 | 31.59 |
Costco Wholesale Corp's interest coverage ratio has remained relatively stable and strong over the past few quarters, ranging from 31.59 to 54.80. This indicates that the company has consistently generated a sufficient amount of operating income to cover its interest expenses. The higher the interest coverage ratio, the better, as it suggests the company has a lower risk of defaulting on its debt obligations.
Costco's interest coverage ratio peaked at 54.80 in November 2023 and has generally trended downwards since then, with the latest ratio standing at 54.08 in February 2024. While the slight decline in the ratio could potentially signal a slight decrease in the company's ability to cover interest expenses with operating income, the overall level of coverage remains strong and indicates that Costco is well-equipped to manage its debt obligations.
Investors and creditors generally view a consistently high interest coverage ratio positively, as it demonstrates the company's ability to meet its debt obligations and indicates financial stability. However, it is essential for Costco to continue monitoring and maintaining a healthy interest coverage ratio to ensure its long-term financial health and sustainability.