Financial statement analysis and common stock valuation

Income Statement

The income statement (statement of earnings) reports on the performance of Costco Wholesale Corp., the result of its operating activities.

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• FCFE Growth Rate (g)

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Costco Wholesale Corp. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to The Firm (FCFF)
• Interest Paid, Net of Tax
• EV to FCFF Ratio, Current
• EV to FCFF Ratio, Historical

Income Statement
Quarterly Data

The income statement (statement of earnings) reports on the performance of Costco Wholesale Corp., the result of its operating activities.

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Costco Wholesale Corp. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Costco Wholesale Corp. earnings.

• Balance-Sheet-Based Accruals Ratio
• Cash-Flow-Statement-Based Accruals Ratio

Analysis of Short-term (Operating) Activity Ratios

Evaluates revenues and output generated by the Costco Wholesale Corp. assets. Operating performance ratios describe the relationship between the Costco Wholesale Corp. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Costco Wholesale Corp. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to Equity (FCFE)
• P to FCFE Ratio, Current
• P to FCFE Ratio, Historical

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Costco Wholesale Corp. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Costco Wholesale Corp. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Costco Wholesale Corp. balance sheet.