Analyst Adjustments: Removal of Goodwill
Adjusted Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Costco Wholesale Corp., adjustments to financial data

USD $ in millions

		Sep 2, 2018	Sep 3, 2017	Aug 28, 2016	Aug 30, 2015	Aug 31, 2014	Sep 1, 2013
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Goodwill, net
	Total assets (adjusted)
	Adjustment to Total Costco Stockholders’ Equity
	Total Costco stockholders’ equity (as reported)
	Less: Goodwill, net
	Total Costco stockholders’ equity (adjusted)

Based on: 10-K (filing date: 2018-10-26), 10-K (filing date: 2017-10-18), 10-K (filing date: 2016-10-12), 10-K (filing date: 2015-10-14), 10-K (filing date: 2014-10-15), 10-K (filing date: 2013-10-16).

Costco Wholesale Corp., Financial Data: Reported vs. Adjusted

Costco Wholesale Corp., adjusted ratios

		Sep 2, 2018	Sep 3, 2017	Aug 28, 2016	Aug 30, 2015	Aug 31, 2014	Sep 1, 2013
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-10-26), 10-K (filing date: 2017-10-18), 10-K (filing date: 2016-10-12), 10-K (filing date: 2015-10-14), 10-K (filing date: 2014-10-15), 10-K (filing date: 2013-10-16).

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Costco Wholesale Corp.’s adjusted total asset turnover deteriorated from 2016 to 2017 and from 2017 to 2018.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Costco Wholesale Corp.’s adjusted financial leverage increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Costco Wholesale Corp.’s adjusted ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Costco Wholesale Corp.’s adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

Costco Wholesale Corp., Ratios: Reported vs. Adjusted

		Sep 2, 2018	Sep 3, 2017	Aug 28, 2016	Aug 30, 2015	Aug 31, 2014	Sep 1, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net sales
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Goodwill
	Selected Financial Data (USD $ in millions)
	Net sales
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2018-10-26), 10-K (filing date: 2017-10-18), 10-K (filing date: 2016-10-12), 10-K (filing date: 2015-10-14), 10-K (filing date: 2014-10-15), 10-K (filing date: 2013-10-16).

2018 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Costco Wholesale Corp.’s adjusted total asset turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

		Sep 2, 2018	Sep 3, 2017	Aug 28, 2016	Aug 30, 2015	Aug 31, 2014	Sep 1, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Total assets
	Total Costco stockholders’ equity
	Ratio
	Financial leverage¹
	Adjusted for Goodwill
	Selected Financial Data (USD $ in millions)
	Adjusted total assets
	Adjusted total Costco stockholders’ equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2018-10-26), 10-K (filing date: 2017-10-18), 10-K (filing date: 2016-10-12), 10-K (filing date: 2015-10-14), 10-K (filing date: 2014-10-15), 10-K (filing date: 2013-10-16).

2018 Calculations

¹ Financial leverage = Total assets ÷ Total Costco stockholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Costco stockholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Costco Wholesale Corp.’s adjusted financial leverage increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

		Sep 2, 2018	Sep 3, 2017	Aug 28, 2016	Aug 30, 2015	Aug 31, 2014	Sep 1, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Costco
	Total Costco stockholders’ equity
	Ratio
	ROE¹
	Adjusted for Goodwill
	Selected Financial Data (USD $ in millions)
	Net income attributable to Costco
	Adjusted total Costco stockholders’ equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2018-10-26), 10-K (filing date: 2017-10-18), 10-K (filing date: 2016-10-12), 10-K (filing date: 2015-10-14), 10-K (filing date: 2014-10-15), 10-K (filing date: 2013-10-16).

2018 Calculations

¹ ROE = 100 × Net income attributable to Costco ÷ Total Costco stockholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Net income attributable to Costco ÷ Adjusted total Costco stockholders’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Costco Wholesale Corp.’s adjusted ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018.

		Sep 2, 2018	Sep 3, 2017	Aug 28, 2016	Aug 30, 2015	Aug 31, 2014	Sep 1, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Costco
	Total assets
	Ratio
	ROA¹
	Adjusted for Goodwill
	Selected Financial Data (USD $ in millions)
	Net income attributable to Costco
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2018-10-26), 10-K (filing date: 2017-10-18), 10-K (filing date: 2016-10-12), 10-K (filing date: 2015-10-14), 10-K (filing date: 2014-10-15), 10-K (filing date: 2013-10-16).

2018 Calculations

¹ ROA = 100 × Net income attributable to Costco ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Net income attributable to Costco ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Costco Wholesale Corp.’s adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

	Costco Wholesale Corp.	Other companies (not purchased previously)
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Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
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Long-term Trends
Analysis
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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Costco Wholesale Corp. (COST)

Analysis of Goodwill and Intangible Assets

Analyst Adjustments: Removal of Goodwill

Costco Wholesale Corp., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Goodwill (Summary)

Costco Wholesale Corp., Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)