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Costco Wholesale Financial Strength

: 8 (As of May. 2022)
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Costco Wholesale has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

Good Sign:

Costco Wholesale Corp shows strong financial strength.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Costco Wholesale's Interest Coverage for the quarter that ended in May. 2022 was 51.17. Costco Wholesale's debt to revenue ratio for the quarter that ended in May. 2022 was 0.04. As of today, Costco Wholesale's Altman Z-Score is 7.56.


Competitive Comparison

For the Discount Stores subindustry, Costco Wholesale's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength Distribution

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

* The bar in red indicates where Costco Wholesale's Financial Strength falls into.



Costco Wholesale Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Costco Wholesale's Interest Expense for the months ended in May. 2022 was $-35 Mil. Its Operating Income for the months ended in May. 2022 was $1,791 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in May. 2022 was $8,959 Mil.

Costco Wholesale's Interest Coverage for the quarter that ended in May. 2022 is

Interest Coverage=-1*Operating Income (Q: May. 2022 )/Interest Expense (Q: May. 2022 )
=-1*1791/-35
=51.17

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Costco Wholesale's Debt to Revenue Ratio for the quarter that ended in May. 2022 is

Debt to Revenue Ratio=Total Debt (Q: May. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(77 + 8959) / 210384
=0.04

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Costco Wholesale has a Z-score of 7.56, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 7.56 is strong.

* 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  (NAS:COST) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Costco Wholesale has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.


Costco Wholesale Financial Strength Related Terms

Thank you for viewing the detailed overview of Costco Wholesale's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Costco Wholesale Business Description

Costco Wholesale logo
Address
999 Lake Drive, Issaquah, WA, USA, 98027
The leading warehouse club, Costco has 815 stores worldwide (at the end of fiscal 2021), with most sales derived in the United States (72%) and Canada (14%). It sells memberships that allow customers to shop in its warehouses, which feature low prices on a limited product assortment. Costco mainly caters to individual shoppers, but roughly 20% of paid members carry business memberships. Food and sundries accounted for 40% of fiscal 2021 sales, with non-food merchandise 29%, warehouse ancillary and other businesses (such as fuel and pharmacy) nearly 17%, and fresh food 14%. Costco's warehouses average around 146,000 square feet; over 75% of its locations offer fuel. About 7% of Costco's global sales come from e-commerce (excluding same-day grocery and various other services).
Executives
Frates Caton officer: Executive Vice President 999 LAKE DRIVE ISSAQUAH WA 98027
Riel Pierre officer: EVP 999 LAKE DRIVE ISSAQUAH WA 98027
Adamo Claudine officer: Executive Vice President 999 LAKE DRIVE ISSAQUAH WA 98027
Sullivan John Christopher officer: Executive VP 999 LAKE DRIVE ISSAQUAH WA 98027
Rubananko Yoram officer: Executive VP 999 LAKE DRIVE ISSAQUAH WA 98027
Jewell Sarah Mr Sally director 1411 E MISSION AVE SPOKANE WA 99202
Callans Patrick J officer: Executive VP 999 LAKE DRIVE ISSAQUAH WA 98027
Miller Russell D officer: Executive Vice President 999 LAKE DRIVE ISSAQUAH WA 98027
Klauer James C officer: Executive Vice President 999 LAKE DRIVE ISSAQUAH WA 98027
Denman Kenneth D director
Hines Daniel M. other: Principal Acctg Officer 999 LAKE DRIVE ISSAQUAH WA 98027
Vachris Roland Michael officer: Executive VP 999 LAKE DRIVE ISSAQUAH WA 98027
Stanton John W director 3650 131ST AVE SE #400 WESTERN WIRELESS CORP BELLEVUE WA 98006
Wilderotter Mary Agnes director 115 ALPINE TERRACE OAKLAND CA 94618
Rose Timothy L. officer: Executive VP 999 LAKE DRIVE ISSAQUAH WA 98027

Costco Wholesale Headlines

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