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Costco Wholesale Corp  (NAS:COST) EBIT: $3,378 Mil (TTM As of May. 2019)

Costco Wholesale Corp's earnings before interest and taxes (EBIT) for the three months ended in May. 2019 was $1,158 Mil. Its earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in May. 2019 was $3,378 Mil.

EBIT or Operating Income is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Costco Wholesale Corp's annualized ROC % for the quarter that ended in May. 2019 was 28.56%. Costco Wholesale Corp's annualized ROC (Joel Greenblatt) % for the quarter that ended in May. 2019 was 22.62%.

EBIT is also linked to Joel Greenblatt's definition of earnings yield. Costco Wholesale Corp's Earnings Yield (Joel Greenblatt) % for the quarter that ended in May. 2019 was 3.23%.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Costco Wholesale Corp Annual Data

Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18
EBIT Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3,310.00 3,728.00 3,752.00 4,173.00 4,601.00

Costco Wholesale Corp Quarterly Data

Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 Apr19 May19
EBIT Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1,497.00 971.00 1,249.00 0.00 1,158.00

Calculation

EBIT, sometimes also called Earnings Before Interest and Taxes, is a measure of a firm's profit that includes all expenses except interest and income tax expenses. It is the difference between operating revenues and operating expenses. When a firm does not have non-operating income, then operating income is sometimes used as a synonym for EBIT and operating profit.

EBIT for the trailing twelve months (TTM) ended in May. 2019 was 971 (Nov. 2018 ) + 1249 (Feb. 2019 ) + 0 (Apr. 2019 ) + 1158 (May. 2019 ) = $3,378 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

1. EBIT or Operating Income is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Costco Wholesale Corp's annualized ROC % for the quarter that ended in May. 2019 is calculated as:

ROC %(Q: May. 2019 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (Q: Apr. 2019 ) + Invested Capital (Q: May. 2019 ))/2)
=4488 * ( 1 - 18.43% )/( (12817 + 12817)/2)
=3660.8616/12817
=28.56 %

where

Invested Capital(Q: Apr. 2019 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Stockholders Equity - Cash
=4799 + 1699 + 14486 - 8167
=12817

Invested Capital(Q: May. 2019 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Stockholders Equity - Cash
=4799 + 1699 + 14486 - 8167
=12817

Note: The Operating Income data used here is four times the quarterly (May. 2019) operating income data.

2. Joel Greenblatt's definition of Return on Capital:

Costco Wholesale Corp's annualized ROC (Joel Greenblatt) % for the quarter that ended in May. 2019 is calculated as:

ROC (Joel Greenblatt) %(Q: May. 2019 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Apr. 2019  Q: May. 2019
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/2 )
=4632/( ( (20475 + max(-8719, 0)) + (20475 + max(-8719, 0)) )/2 )
=4632/( ( 20475 + 20475 )/2 )
=4632/20475
=22.62 %

where Working Capital is:

Working Capital(Q: Apr. 2019 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(0 + 11304 + 1110) - (15379 + 1761 + 3993)
=-8719

Working Capital(Q: May. 2019 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(0 + 11304 + 1110) - (15379 + 1761 + 3993)
=-8719

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (May. 2019) EBIT data.

3. It is also linked to Joel Greenblatt's definition of Earnings Yield:

Costco Wholesale Corp's Earnings Yield (Joel Greenblatt) %for the quarter that ended in May. 2019 is calculated as:

Earnings Yield (Joel Greenblatt) %=EBIT (TTM)/Enterprise Value (Q: May. 2019 )
=3378/104713.17036
=3.23 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


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