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Costco Wholesale Piotroski F-Score

: 4 (As of Today)
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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 4 indicating the company's financial situation is typical for a stable company.

NAS:COST' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Med: 6   Max: 8
Current: 4

1
8

During the past 13 years, the highest Piotroski F-Score of Costco Wholesale was 8. The lowest was 1. And the median was 6.


Costco Wholesale Piotroski F-Score 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
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 7.00 6.00 7.00 5.00

Costco Wholesale Quarterly Data
May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20
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 5.00 5.00 5.00 5.00 4.00

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 Piotroski F-Score Distribution

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


How is the Piotroski F-Score calculated?

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

This Year (Feb20) TTM:Last Year (Feb19) TTM:
Net Income was 906 + 1097 + 844 + 931 = $3,778 Mil.
Cash Flow from Operations was 2105 + 2293 + 2102 + 619 = $7,119 Mil.
Revenue was 34740 + 47498 + 37040 + 39072 = $158,350 Mil.
Gross Profit was 4507 + 6188 + 4807 + 5016 = $20,518 Mil.
Average Total Assets from the begining of this year (Feb19)
to the end of this year (Feb20) was
(42799 + 43752 + 45400 + 51431 + 48782) / 5 = $46432.8 Mil.
Total Assets at the begining of this year (Feb19) was $42,799 Mil.
Long-Term Debt & Capital Lease Obligation was $7,545 Mil.
Total Current Assets was $23,703 Mil.
Total Current Liabilities was $22,695 Mil.
Net Income was 750 + 1043 + 767 + 889 = $3,449 Mil.

Revenue was 32361 + 44411 + 35069 + 35396 = $147,237 Mil.
Gross Profit was 4230 + 5740 + 4446 + 4676 = $19,092 Mil.
Average Net Income from the begining of last year (Feb18)
to the end of last year (Feb19) was
(38703 + 39605 + 40830 + 43814 + 42799) / 5 = $41150.2 Mil.
Total Assets at the begining of last year (Feb18) was $38,703 Mil.
Long-Term Debt & Capital Lease Obligation was $4,794 Mil.
Total Current Assets was $21,648 Mil.
Total Current Liabilities was $22,450 Mil.

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 3,778. ==> 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 7,119. ==> 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(Feb19)
=3778/42799
=0.08827309

ROA (Last Year)=Net Income/Total Assets(Feb18)
=3449/38703
=0.08911454

Costco Wholesale's return on assets of this year was 0.08827309. Costco Wholesale's return on assets of last year was 0.08911454. ==> 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 3,778. Costco Wholesale's current Cash Flow from Operations (TTM) was 7,119. ==> 7,119 > 3,778 ==> 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: Feb20)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Feb19 to Feb20
=7545/46432.8
=0.16249289

Gearing (Last Year: Feb19)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Feb18 to Feb19
=4794/41150.2
=0.11650004

Costco Wholesale's gearing of this year was 0.16249289. Costco Wholesale's gearing of last year was 0.11650004. ==> Last year is lower than this year ==> Score 0.

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: Feb20)=Total Current Assets/Total Current Liabilities
=23703/22695
=1.04441507

Current Ratio (Last Year: Feb19)=Total Current Assets/Total Current Liabilities
=21648/22450
=0.96427617

Costco Wholesale's current ratio of this year was 1.04441507. Costco Wholesale's current ratio of last year was 0.96427617. ==> This year's current ratio is higher. ==> Score 1.

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 443.7. Costco Wholesale's number of shares in issue last year was 442.3. ==> 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
=20518/158350
=0.12957373

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=19092/147237
=0.12966849

Costco Wholesale's gross margin of this year was 0.12957373. Costco Wholesale's gross margin of last year was 0.12966849. ==> Last year's gross margin is higher ==> Score 0.

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 (Feb19)
=158350/42799
=3.6998528

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Feb18)
=147237/38703
=3.80427874

Costco Wholesale's asset turnover of this year was 3.6998528. Costco Wholesale's asset turnover of last year was 3.80427874. ==> 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+0+1+0+0+0
=4

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

Costco Wholesale has an F-score of 4 indicating the company's financial situation is typical for a stable company.

Costco Wholesale  (NAS:COST) 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.


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