Costco Wholesale Corp. (NASDAQ:COST)

The financial data reflects the evolution of both reported and goodwill adjusted figures for total assets and stockholders’ equity over a six-year period ending in September 2024.

Total Assets

The reported total assets increase consistently each year, rising from $45,400 million in 2019 to $69,831 million in 2024. This represents an overall growth of approximately 54% over the six-year period. The growth appears steady, with notable increments each year, indicating ongoing asset acquisition or valuation improvements.

The adjusted total assets, which likely exclude goodwill, follow a similar upward trend, increasing from $45,347 million in 2019 to $68,837 million in 2024. The difference between reported and adjusted assets remains relatively stable across the years, implying that goodwill or similar intangible assets form a consistent but relatively small portion of total assets.

Stockholders’ Equity

Reported total stockholders’ equity shows growth from $15,243 million in 2019 to a peak of $25,058 million in 2023, before declining slightly to $23,622 million in 2024. This suggests generally positive equity growth over the period, possibly due to retained earnings and capital contributions, with a minor contraction in the latest year.

Adjusted total stockholders’ equity exhibits a nearly parallel pattern, starting at $15,190 million in 2019, peaking at $24,064 million in 2023, and decreasing to $22,628 million in 2024. The proximity of adjusted to reported equity figures indicates that adjustments for goodwill have limited impact on equity valuation.

Insights and Trends

Overall, both assets and equity have exhibited growth throughout the period, reflecting likely expansion and financial strengthening. The consistent gap between reported and adjusted figures suggests minimal fluctuation in goodwill over time. The slight decline in equity in the last year might indicate share buybacks, dividends exceeding earnings, or other factors affecting equity levels.

The steady asset growth without a proportional increase in equity hints at increasing liabilities, which merits further analysis to assess leverage and financial risk.

The analysis of the financial data over the reported periods reveals several notable trends in the company's operational efficiency and profitability metrics.

Total Asset Turnover

The reported total asset turnover ratio demonstrates some fluctuations but generally an upward trajectory, increasing from 3.29 in 2019 to 3.57 in 2024. The adjusted total asset turnover, which likely excludes goodwill effects, follows a similar pattern, showing a slight improvement over the years from 3.29 to 3.63. This suggests enhanced efficiency in generating sales from the asset base, particularly when adjustments are considered.

Financial Leverage

Reported financial leverage ratios exhibit variability, rising from 2.98 in 2019 to a peak of 3.37 in 2021, before declining to 2.75 in 2023 and rising again to 2.96 in 2024. The adjusted financial leverage reflects a similar pattern but with consistently higher values than reported figures, peaking at 3.52 in 2021 and decreasing to 3.04 in 2024. This indicates that, despite some volatility, the company’s reliance on debt relative to equity has generally remained within a moderate range, with some reduction in leverage after 2021.

Return on Equity (ROE)

ROE shows a general upward trend over the period, with reported figures increasing from 24% in 2019 to 31.19% in 2024, peaking at 28.51% in 2021. The adjusted ROE, accounting for goodwill adjustments, starts slightly higher than the reported ROE and rises more pronouncedly, reaching 32.56% in 2024. This indicates an improvement in shareholder returns over time, and the adjustments suggest the company's equity returns are even stronger when goodwill effects are removed.

Return on Assets (ROA)

Both reported and adjusted ROA figures show a clear upward trend throughout the entire period. Reported ROA increases from 8.06% in 2019 to 10.55% in 2024, while adjusted ROA rises from 8.07% to 10.7% in the same timeframe. This improvement indicates increased efficiency in asset utilization to generate net income, further underscored by the adjusted figures suggesting slightly better performance excluding goodwill.

Overall, the trends reflect improvements in asset turnover and profitability metrics, paired with fluctuating but generally moderate financial leverage. The adjustments for goodwill consistently yield slightly higher efficiency and profitability ratios, indicating that goodwill may be dilutive to some extent in the reported numbers. The data suggests a strengthening financial position with increased returns on equity and assets over the analysis period.

The analysis of the financial data over the six-year period reveals several noteworthy trends. The total assets, both reported and goodwill adjusted, have demonstrated a consistent upward trajectory. Reported total assets increased from US$ 45,400 million in 2019 to US$ 69,831 million in 2024, while adjusted total assets rose from US$ 45,347 million to US$ 68,837 million over the same period. This steady growth indicates ongoing asset accumulation or acquisition activities.

Examining the total asset turnover ratios, there is a clear pattern of initial decline followed by recovery and improvement. The reported total asset turnover decreased from 3.29 in 2019 to 2.94 in 2020, reflecting potential inefficiencies or challenges during that year. However, it rebounded in the subsequent years, reaching 3.57 in 2024, which surpasses the initial 2019 level. A similar pattern is observed in the adjusted total asset turnover ratio, which fell from 3.29 to 2.99 between 2019 and 2020 before improving to 3.63 by 2024.

The divergence in values between reported and adjusted figures remains minimal throughout the years, indicating that goodwill adjustments have a relatively small impact on total assets and turnover metrics. The improvement in asset turnover ratios alongside asset growth suggests enhanced operational efficiency or higher revenue generation relative to asset base.

Total Assets

Consistent increase from approximately US$ 45 billion in 2019 to nearly US$ 70 billion in 2024, indicating asset base expansion.

Asset Turnover Ratios

Initial decline in 2020 with subsequent recovery and growth, exceeding earlier levels by 2024, suggesting improvement in asset utilization efficiency.

Comparison of Reported vs Adjusted Figures

Minor differences highlight limited impact of goodwill adjustments on overall asset and turnover values.

Overall Insights

The company's ability to grow assets while improving turnover ratios reflects a strengthening operational performance and asset management over the analyzed period.

The analysis of the available financial data reveals several key trends over the examined periods that reflect changes in both asset base and equity structure as well as financial leverage.

Total Assets

Reported total assets have shown a consistent year-over-year increase from 45,400 million US dollars in 2019 to 69,831 million US dollars in 2024, indicating steady growth in the company's asset base. The adjusted total assets follow a very similar trend, slightly lower in magnitude but increasing from 45,347 million US dollars in 2019 to 68,837 million US dollars in 2024. This parallel movement suggests minimal impact from goodwill adjustments on total assets over the observed timeframe.

Stockholders' Equity

Reported stockholders’ equity has generally increased from 15,243 million US dollars in 2019 to a peak of 25,058 million US dollars in 2023, followed by a slight decline to 23,622 million US dollars in 2024. Adjusted equity figures present a comparable trend, rising from 15,190 million US dollars in 2019 to 24,064 million US dollars in 2023, and then decreasing to 22,628 million US dollars in 2024. The decreasing equity in the last year may imply either dividend payouts, share buybacks, or other adjustments affecting equity.

Financial Leverage

Financial leverage ratios exhibit some fluctuation over the period. Reported financial leverage increased from approximately 2.98 in 2019 to a peak of 3.37 in 2021, indicating a rise in debt relative to equity during that period. However, this was followed by a decline to 2.75 in 2023, suggesting a reduction in leverage or increase in equity. In 2024, the ratio somewhat increased again to 2.96. Adjusted financial leverage shows a similar pattern with slightly higher peaks and troughs: peaking at 3.52 in 2021, decreasing to 2.83 in 2023, and rising again to 3.04 in 2024. This behavior indicates some variability in the company’s financing structure but generally a moderate leverage ratio around 3 times equity.

Overall, the trends point to consistent asset growth, supported by increasing equity but with some recent reduction in equity noted in 2024. The financial leverage trends suggest the company manages its debt levels actively, with leverage ratios shifting moderately but remaining within a range indicating balanced use of debt and equity financing. The close alignment between reported and adjusted metrics signifies that goodwill adjustments have a limited impact on the overall financial position and leverage assessments across the observed years.

The analysis of the reported and goodwill adjusted financial data over the six-year period shows several notable trends and variations in the company's equity and profitability metrics.

Total Stockholders’ Equity (Reported and Adjusted)

Reported total stockholders' equity demonstrates a general upward trend from 15,243 million US dollars in 2019 to a peak of 25,058 million US dollars in 2023, followed by a slight decline to 23,622 million US dollars in 2024. The adjusted total stockholders’ equity follows a similar pattern, increasing from 15,190 million US dollars in 2019 to a high of 24,064 million US dollars in 2023, before decreasing to 22,628 million US dollars in 2024. This pattern indicates consistent growth in equity with a minor contraction in the most recent year.

Return on Equity (ROE) – Reported

The reported ROE starts at 24% in 2019, decreases to approximately 21.89% in 2020, and then rises significantly to 28.51% in 2021. It remains relatively stable at 28.31% in 2022 before declining to 25.11% in 2023. In 2024, it increases again to a notable 31.19%. This fluctuation suggests variability in profitability efficiency, with a generally strong performance particularly in the most recent year.

Return on Equity (ROE) – Adjusted

The adjusted ROE closely tracks the reported ROE but exhibits slightly higher values throughout the period. It begins at 24.09% in 2019 and rises to 30.22% in 2021. Following this, it remains at a high level of 29.74% in 2022, dips marginally to 26.15% in 2023, and then climbs to 32.56% in 2024. These adjusted figures suggest a slightly improved return on equity when goodwill adjustments are considered, highlighting consistent underlying profitability strengths.

Overall, the data reveals steady growth in stockholders’ equity over the examined years with a peak in 2023 and a slight decline in 2024. Profitability, as measured by ROE, experienced some fluctuations but remained robust, achieving its highest point in 2024 on both a reported and adjusted basis. The adjusted metrics indicate that goodwill considerations have a positive impact on the perceived return on equity, signaling strong underlying financial performance despite the slight equity contraction in the latest year.

The analysis of the reported and goodwill adjusted financial data over the indicated years reveals consistent growth and improving profitability metrics for the company.

Total Assets

The reported total assets show a steady upward trend from US$ 45,400 million in 2019 to US$ 69,831 million in 2024. This indicates continuous asset growth, with an increase of approximately 53.8% over the period. The adjusted total assets, which exclude goodwill, follow a very similar path, increasing from US$ 45,347 million in 2019 to US$ 68,837 million in 2024. The close alignment between reported and adjusted total assets suggests that goodwill makes up a relatively minor proportion of total assets, and asset growth is primarily driven by tangible or identifiable investments.

Return on Assets (ROA)

The reported ROA exhibits some fluctuations but overall shows a positive trend from 8.06% in 2019 to 10.55% in 2024. There is a noticeable dip in 2020 to 7.2%, likely reflecting external challenges during that year, but a recovery occurs from 2021 onward. The adjusted ROA, which likely accounts for asset base adjusted for goodwill, follows a similar but slightly higher trend, moving from 8.07% in 2019 to 10.7% in 2024. The convergence of reported and adjusted ROA over time indicates improving efficiency in utilizing assets to generate earnings, with the company's core operations becoming increasingly productive.

Overall, the data suggests a company with a steadily expanding asset base and a strengthening capacity to convert those assets into profits. The consistent growth in both reported and adjusted total assets alongside the upward trend in ROA metrics points to effective asset management and operational improvement throughout the reporting periods.