ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Costco Wholesale's annualizedNet Income for the quarter that ended in Aug. 2024 was ARS8,775,712 Mil.
Costco Wholesale's average Total Assets over the quarter that ended in Aug. 2024 was ARS62,303,241 Mil. Therefore, Costco Wholesale's annualized ROA % for the quarter that ended in Aug. 2024 was 14.09%.
The historical rank and industry rank for Costco Wholesale's ROA % or its related term are showing as below:
BUE:COST'
s ROA % Range Over the Past 10 Years
Min: 7.1 Med: 8.31 Max: 10.62
Current: 10.62
During the past 13 years, Costco Wholesale's highest ROA % was 10.62%. The lowest was 7.10%. And the median was 8.31%.
BUE:COST's ROA % is ranked better than 89.59% of 317
companies
in the Retail - Defensive industry
Industry Median: 3.84
vs BUE:COST: 10.62
Costco Wholesale ROA % Historical Data
The historical data trend for Costco Wholesale's ROA % 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.
Competitive Comparison of Costco Wholesale's ROA %
For the Discount Stores subindustry, Costco Wholesale's ROA %, along with its competitors' market caps and ROA % 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's ROA % Distribution in the Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's ROA % distribution charts can be found below:
* The bar in red indicates where Costco Wholesale's ROA % falls into.
Costco Wholesale ROA % Calculation
Costco Wholesale's annualized ROA % for the fiscal year that ended in Aug. 2024 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.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Aug. 2024) net income data.
ROA % is displayed in the 30-year financial page.
Costco Wholesale (BUE:COST) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Aug. 2024) net income data. The Revenue data used here is four times the quarterly (Aug. 2024) revenue data.
* 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.
Be Aware
Like ROE, ROA % 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. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % 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 ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Costco Wholesale ROA % Related Terms
Thank you for viewing the detailed overview of Costco Wholesale's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.
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 over 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 UK.
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