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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Costco Wholesale's Sloan Ratio for the quarter that ended in May. 2026 was -0.04%.
As of May. 2026, Costco Wholesale has a Sloan Ratio of -0.04%, indicating the company is in the safe zone and there is no funny business with accruals.
Costco Wholesale (NAS:COST) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of May. 2026, Costco Wholesale has a Sloan Ratio of -0.04%, indicating the company is in the safe zone and there is no funny business with accruals.
Costco Wholesale Sloan Ratio % Related Terms
Costco Wholesale Sloan Ratio % Historical Data
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The historical data trend for Costco Wholesale's Sloan 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.
For the Discount Stores subindustry, Costco Wholesale's Sloan Ratio %, along with its competitors' market caps and Sloan 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 Sloan Ratio % vs Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Costco Wholesale's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Costco Wholesale's Sloan Ratio for the fiscal year that ended in Aug. 2025 is calculated as
Costco Wholesale's Net Income for the trailing twelve months (TTM) ended in May. 2026 was 2610 (Aug. 2025 ) + 2001 (Nov. 2025 ) + 2035 (Feb. 2026 ) + 2192 (May. 2026 ) = $8,838 Mil.
Costco Wholesale's Cash Flow from Operations for the trailing twelve months (TTM) ended in May. 2026 was 3867 (Aug. 2025 ) + 4688 (Nov. 2025 ) + 2996 (Feb. 2026 ) + 3449 (May. 2026 ) = $15,000 Mil.
Costco Wholesale's Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2026 was -1968 (Aug. 2025 ) + -1398 (Nov. 2025 ) + -1170 (Feb. 2026 ) + -1592 (May. 2026 ) = $-6,128 Mil.
* 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 (COST) has a Sloan Ratio % of -0.04% as of May. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Costco Wholesale and its competitors.
Is Costco Wholesale's Sloan Ratio % too high?
Costco Wholesale's current Sloan Ratio % is -0.04%. Overall, Costco Wholesale has a GF Score™ of 96/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Costco Wholesale's Sloan Ratio % compare to TGT and DG?
Costco Wholesale's Sloan Ratio % of -0.04% can be compared against companies in the Retail - Defensive industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Retail - Defensive company?
A good Sloan Ratio % depends on the Retail - Defensive industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Costco Wholesale and its competitors. Costco Wholesale's current Sloan Ratio % is -0.04%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Costco Wholesale stock overvalued right now?
Based on GuruFocus' analysis, Costco Wholesale (COST) is currently considered Fairly Valued. The stock's GF Value™ is $1,023.16, compared to a current price of $940.87 — trading 8% below its estimated fair value. The current Sloan Ratio % is -0.04%. Costco Wholesale's overall GF Score™ is 96/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Costco Wholesale (COST), the current Sloan Ratio % is -0.04% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Costco Wholesale (COST) Overvalued in 2026?
Based on GuruFocus' analysis, Costco Wholesale stock appears to be undervalued.
The current stock price of $940.87 is trading 8% below its estimated GF Value™ of $1,023.16.
GuruFocus considers Costco Wholesale to be Fairly Valued.
Key valuation signals for COST:
Sloan Ratio %: -0.04%
GF Value™: $1,023.16 vs. price of $940.87 (8% below fair value)
No single metric tells the full story. See the COST stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Founded in 1983, Costco Wholesale now operates a global chain of membership-based warehouse clubs, delivering high-quality goods and services at consistently low prices. As of its most recent fiscal year, Costco operated approximately 910 warehouses, serving more than 80 million members across its three geographic segments: Costco US (approximately 73% of total revenue), Costco Canada (13%), and Costco International (14%).Costco's core value proposition—quality products at unbeatable prices—has yielded consistently strong member renewal rates (93% in the US and Canada and nearly 90% internationally). About 55% of Costco's fiscal 2025 revenue came from its grocery offerings, and another 25% from general merchandise.
96GF Score
Get the complete analysis for COST
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