The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Costco Wholesale's current ratio for the quarter that ended in Feb. 2024 was 0.93.
Costco Wholesale has a current ratio of 0.93. It indicates that the company may have difficulty meeting its current obligations. Low values, however, do not indicate a critical problem. If Costco Wholesale has good long-term prospects, it may be able to borrow against those prospects to meet current obligations.
The historical rank and industry rank for Costco Wholesale's Current Ratio or its related term are showing as below:
BSP:COWC34'
s Current Ratio Range Over the Past 10 Years
Min: 0.81 Med: 1.01 Max: 1.22
Current: 0.93
During the past 13 years, Costco Wholesale's highest Current Ratio was 1.22. The lowest was 0.81. And the median was 1.01.
BSP:COWC34's Current Ratio is ranked worse than 73.02% of 315
companies
in the Retail - Defensive industry
Industry Median: 1.29
vs BSP:COWC34: 0.93
Costco Wholesale Current Ratio Historical Data
The historical data trend for Costco Wholesale's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
Costco Wholesale Annual Data
Trend
Aug14
Aug15
Aug16
Aug17
Aug18
Aug19
Aug20
Aug21
Aug22
Aug23
Current Ratio
1.01
1.13
1.00
1.02
1.07
Costco Wholesale Quarterly Data
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
May23
Aug23
Nov23
Feb24
Current Ratio
1.06
1.08
1.07
1.09
0.93
Competitive Comparison
For the Discount Stores subindustry, Costco Wholesale's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
Costco Wholesale Current Ratio Distribution
For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's Current Ratio distribution charts can be found below:
* The bar in red indicates where Costco Wholesale's Current Ratio falls into.
Costco Wholesale Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Costco Wholesale's Current Ratio for the fiscal year that ended in Aug. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Costco Wholesale (BSP:COWC34) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Costco Wholesale Current Ratio Related Terms
Thank you for viewing the detailed overview of Costco Wholesale's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Costco Wholesale (BSP:COWC34) Business Description
Costco operates a membership-based, no-frills retail model, predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given Costco's frugal cost structure, the firm is able to price its merchandise below competing retailers, driving high sales volume per warehouse and allowing the retailer to generate strong profits on thin margins. Costco operates nearly 600 warehouses in the United States and boasts over 60% market share in the domestic warehouse club industry. Internationally, Costco operates another 270 warehouses, primarily in markets such as Canada, Mexico, Japan, and the U.K.
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