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Costco Wholesale Return-on-Tangible-Asset

: 9.84% (As of Aug. 2019)
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Return on tangible assets is calculated as Net Income divided by its average total tangible assets. Total tangible assets equals to Total Assets minus Intangible Assets. Costco Wholesale's annualized Net Income for the quarter that ended in Aug. 2019 was USD 4,388 Mil. Costco Wholesale's average total tangible assets for the quarter that ended in Aug. 2019 was USD 44,576 Mil. Therefore, Costco Wholesale's annualized return on tangible assests (ROTA) for the quarter that ended in Aug. 2019 was 9.84%.

NAS:COST' s Return-on-Tangible-Asset Range Over the Past 10 Years
Min: 5.69   Max: 8.49
Current: 6.59

5.69
8.49

During the past 13 years, Costco Wholesale's highest Return on Tangible Assets (ROTA) was 8.49%. The lowest was 5.69%. And the median was 7.11%.

NAS:COST's Return-on-Tangible-Asset is ranked higher than
82% of the 369 Companies
in the Retail - Defensive industry.

( Industry Median: 3.25 vs. NAS:COST: 6.59 )

Costco Wholesale Return-on-Tangible-Asset 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 Annual Data
Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18 Aug19
Return-on-Tangible-Asset Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.20 7.10 7.71 8.12 8.49

Costco Wholesale Quarterly Data
Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 Apr19 May19 Aug19
Return-on-Tangible-Asset 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 7.25 8.21 0.00 8.28 9.84

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Costco Wholesale Return-on-Tangible-Asset Distribution

* The bar in red indicates where Costco Wholesale's Return-on-Tangible-Asset falls into.



Costco Wholesale Return-on-Tangible-Asset Calculation

Costco Wholesale's annualized Return on Tangible Assets (ROTA) for the fiscal year that ended in Aug. 2019 is calculated as:

ROTA=Net Income/( (Total Tangible Assets+Total Tangible Assets)/ 2 )
(A: Aug. 2019 )  (A: Aug. 2018 )(A: Aug. 2019 )
=Net Income/( (Total Assets - Intangible Assets+Total Assets - Intangible Assets)/ 2 )
(A: Aug. 2019 )  (A: Aug. 2018 )(A: Aug. 2019 )
=3659/( (40830+45400)/ 2 )
=3659/43115
=8.49 %

Costco Wholesale's annualized Return on Tangible Assets (ROTA) for the quarter that ended in Aug. 2019 is calculated as:

ROTA=Net Income/( (Total Tangible Assets+Total Tangible Assets)/ 2 )
(Q: Aug. 2019 )  (Q: May. 2019 )(Q: Aug. 2019 )
=Net Income/( (Total Assets - Intangible Assets+Total Assets - Intangible Assets)/ 2 )
(Q: Aug. 2019 )  (Q: May. 2019 )(Q: Aug. 2019 )
=4388/( (43752+45400)/ 2 )
=4388/44576
=9.84 %

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

In the calculation of annual return on tangible assets, the net income of the last fiscal year and the average total tangible assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Aug. 2019) net income data.


Costco Wholesale  (NAS:COST) Return-on-Tangible-Asset Explanation

Return on tangible assets (ROTA) measures the rate of return on the average total tangible assets (total assets minus intangible assets). Tangible means physical in nature. Intangible Assets are assets that are not physical in nature, and typically "derive their value from legal or intellectual rights." ROTA measures a firm's efficiency at generating profits from its tangible assets. ROTA shows how well a company uses what it has to generate earnings. ROTAs can vary drastically across industries. Therefore, return on tangible assets should not be used to compare companies in different industries.


Be Aware

Like ROE and ROA, ROTA is calculated with only 12 months data. Fluctuations in the company’s earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROTA can be affected by events such as stock buyback or issuance, and by a company’s tax rate and its interest payment. ROTA may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROTA may indicate vulnerability in the durability of the competitive advantage.


Costco Wholesale Return-on-Tangible-Asset Related Terms

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