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Costco Wholesale (FRA:CTO) Piotroski F-Score

: 7 (As of Today)
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Good Sign:

Piotroski F-Score is 7, indicates a very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Costco Wholesale has an F-score of 5 indicating the company's financial situation is typical for a stable company.

The historical rank and industry rank for Costco Wholesale's Piotroski F-Score or its related term are showing as below:

FRA:CTO' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Med: 6   Max: 9
Current: 7

During the past 13 years, the highest Piotroski F-Score of Costco Wholesale was 9. The lowest was 4. And the median was 6.


Costco Wholesale Piotroski F-Score Historical Data

The historical data trend for Costco Wholesale's Piotroski F-Score 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
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.00 5.00 5.00 7.00 7.00

Costco Wholesale Quarterly Data
May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24
Piotroski F-Score 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 6.00 6.00 7.00 9.00 7.00

Competitive Comparison

For the Discount Stores subindustry, Costco Wholesale's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score 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 Piotroski F-Score Distribution

For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Costco Wholesale's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* 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.

This Year (Feb24) TTM:Last Year (Feb23) TTM:
Net Income was 1197.84 + 1980.72 + 1468.236 + 1615.761 = €6,263 Mil.
Cash Flow from Operations was 1417.72 + 3415.825 + 4297.524 + 677.637 = €9,809 Mil.
Revenue was 49356.16 + 72387.063 + 53406.276 + 54175.734 = €229,325 Mil.
Gross Profit was 5955.16 + 8913.24 + 6784.008 + 6768.954 = €28,421 Mil.
Average Total Assets from the begining of this year (Feb23)
to the end of this year (Feb24) was
(62436.032 + 61411.84 + 63267.498 + 68120.052 + 61481.421) / 5 = €63343.3686 Mil.
Total Assets at the begining of this year (Feb23) was €62,436 Mil.
Long-Term Debt & Capital Lease Obligation was €7,743 Mil.
Total Current Assets was €29,799 Mil.
Total Current Liabilities was €32,156 Mil.
Net Income was 1279.938 + 1843.716 + 1338.084 + 1369.244 = €5,831 Mil.

Revenue was 49755.816 + 71153.817 + 53402.697 + 51618.444 = €225,931 Mil.
Gross Profit was 5903.986 + 8422.071 + 6541.308 + 6391.362 = €27,259 Mil.
Average Total Assets from the begining of last year (Feb22)
to the end of last year (Feb23) was
(55571.718 + 60403.992 + 63331.842 + 64772.487 + 62436.032) / 5 = €61303.2142 Mil.
Total Assets at the begining of last year (Feb22) was €55,572 Mil.
Long-Term Debt & Capital Lease Obligation was €8,465 Mil.
Total Current Assets was €32,064 Mil.
Total Current Liabilities was €30,370 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Costco Wholesale's current Net Income (TTM) was 6,263. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Costco Wholesale's current Cash Flow from Operations (TTM) was 9,809. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Feb23)
=6262.557/62436.032
=0.10030357

ROA (Last Year)=Net Income/Total Assets (Feb22)
=5830.982/55571.718
=0.10492715

Costco Wholesale's return on assets of this year was 0.10030357. Costco Wholesale's return on assets of last year was 0.10492715. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Costco Wholesale's current Net Income (TTM) was 6,263. Costco Wholesale's current Cash Flow from Operations (TTM) was 9,809. ==> 9,809 > 6,263 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Feb24)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Feb23 to Feb24
=7743.231/63343.3686
=0.12224217

Gearing (Last Year: Feb23)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Feb22 to Feb23
=8464.842/61303.2142
=0.13808154

Costco Wholesale's gearing of this year was 0.12224217. Costco Wholesale's gearing of last year was 0.13808154. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Feb24)=Total Current Assets/Total Current Liabilities
=29799.342/32155.776
=0.92671817

Current Ratio (Last Year: Feb23)=Total Current Assets/Total Current Liabilities
=32064.22/30369.944
=1.05578792

Costco Wholesale's current ratio of this year was 0.92671817. Costco Wholesale's current ratio of last year was 1.05578792. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Costco Wholesale's number of shares in issue this year was 444.754. Costco Wholesale's number of shares in issue last year was 444.475. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=28421.362/229325.233
=0.12393474

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=27258.727/225930.774
=0.12065079

Costco Wholesale's gross margin of this year was 0.12393474. Costco Wholesale's gross margin of last year was 0.12065079. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Feb23)
=229325.233/62436.032
=3.67296296

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Feb22)
=225930.774/55571.718
=4.06557116

Costco Wholesale's asset turnover of this year was 3.67296296. Costco Wholesale's asset turnover of last year was 4.06557116. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+1+0+0+1+0
=5

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Costco Wholesale has an F-score of 5 indicating the company's financial situation is typical for a stable company.

Costco Wholesale  (FRA:CTO) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Costco Wholesale Piotroski F-Score Related Terms

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Costco Wholesale (FRA:CTO) Business Description

Address
999 Lake Drive, Issaquah, WA, USA, 98027
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.