Costco Wholesale Corp. (NASDAQ:COST)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes has exhibited a generally increasing trend from 2020 through 2025. Starting at $4,254 million in 2020, it rose to $5,292 million in 2021 and further to $6,421 million in 2022. There was a decline to $5,694 million in 2023, followed by a notable recovery and increase to $7,032 million in 2024 and $7,834 million in 2025. This overall upward trajectory indicates improving operational profitability despite the temporary dip in 2023.

Invested Capital

Invested capital showed variability over the analyzed period. Initial investment stood at $29,043 million in 2020, which saw a slight decrease to $28,508 million in 2021. In the subsequent years, invested capital rose steadily, reaching $31,671 million in 2022, $34,903 million in 2023, before dipping slightly to $32,993 million in 2024 and then increasing again to $37,996 million in 2025. The overall trend suggests a growth in capital investment, highlighting ongoing commitment to asset expansion or capital projects.

Return on Invested Capital (ROIC)

Return on invested capital demonstrates strong performance with notable fluctuations. ROIC rose sharply from 14.65% in 2020 to 18.56% in 2021, continuing upward to 20.27% in 2022. In 2023, it dropped to 16.31%, coinciding with the decline in operating profit. However, the subsequent years show a recovery with ROIC increasing to 21.31% in 2024 and slightly adjusting to 20.62% in 2025. These figures indicate that although there was a brief decline, the company maintained a high level of efficiency in generating returns from its invested capital overall.

Summary Insights

Overall, the data reveals improvement in profitability and capital efficiency over the period analyzed. Despite some intermittent declines in both NOPAT and ROIC around 2023, the general pattern shows growing net operating profits and strong returns on invested capital. Invested capital levels also indicate an upward investment trend, supporting future growth potential. The combination of these factors points to effective capital allocation and operational performance, contributing to sustainable value creation.

The financial data over the years reveals several notable trends regarding profitability, efficiency, tax obligations, and returns on capital invested.

Operating Profit Margin (OPM)

The operating profit margin exhibits a general upward trend from 3.37% in 2020 to 3.92% in 2025, with a slight decline observed in 2023 to 3.28%. This suggests an overall improvement in operational efficiency and cost management, despite occasional short-term fluctuations.

Turnover of Capital (TO)

This ratio shows a consistent increase from 5.62 in 2020, reaching a peak of 7.57 in 2024, before slightly declining to 7.1 in 2025. The upward trajectory signifies enhanced effectiveness in utilizing capital to generate revenue, though the minor drop in the final year could indicate emerging challenges in capital deployment or market conditions.

1 – Effective Cash Tax Rate (CTR)

The effective cash tax rate decreased steadily from 77.35% in 2020 to a low of 72.96% in 2023. However, it rose marginally in subsequent years, stabilizing around the mid-70% range by 2025. This pattern may reflect tax planning strategies, changes in tax legislation, or shifts in profitability affecting the tax base.

Return on Invested Capital (ROIC)

ROIC saw a significant rise from 14.65% in 2020 to 20.62% in 2025, peaking at 21.31% in 2024 after a dip in 2023. This indicates improving returns generated from invested capital, highlighting effective investment decisions and the capacity to generate value over time, despite cyclical variances.

Overall, the data points toward strengthening profitability and capital efficiency, accompanied by a moderate decrease and stabilization in the effective cash tax rate. The observed fluctuations in some metrics during the middle of the period may suggest responses to external market factors or internal strategic shifts.

Net Operating Profit Before Taxes (NOPBT)

There is a consistent upward trend in net operating profit before taxes over the periods observed. Starting at 5,500 million US dollars in 2020, the figure increased steadily to 10,584 million US dollars by 2025. The growth indicates improving profitability at the operating level before tax considerations.

Net Sales

Net sales also show a strong and sustained increase throughout the years. Beginning with 163,220 million US dollars in 2020, net sales climbed to 269,912 million US dollars by 2025. This positive trajectory reflects expanding revenue generation and likely increased market demand or operational scale.

Operating Profit Margin (OPM)

The operating profit margin exhibits moderate fluctuations while maintaining an overall upward tendency. It increased from 3.37% in 2020 to a peak of 3.79% in 2022, then experienced a dip to 3.28% in 2023, followed by recovery and growth reaching 3.92% in 2025. This suggests periods of varied operational efficiency but ultimately improving profitability relative to sales.

Summary

The financial data indicates an overall improvement in both scale and profitability. Net sales and net operating profit before taxes both approximately doubled over the examined periods, demonstrating robust growth. Operating profit margin variation suggests some operational challenges or strategic adjustments, yet final margins are higher than at the start. The combination of rising sales, increasing operating profits, and improving margins points to strengthened operational performance and enhanced financial health over time.

The financial data exhibits a consistent and positive growth trend in net sales over the observed periods. Starting from US$163,220 million, net sales have increased steadily each year, reaching US$269,912 million in the last recorded period. This illustrates a strong upward trajectory in revenue generation.

In terms of invested capital, there is a generally increasing trend with some fluctuations. The investment started at US$29,043 million and grew to US$37,996 million by the final period. However, there is a slight decline noticeable in the middle periods (from 34,903 million down to 32,993 million), indicating potential optimization or divestment before increasing again toward the end.

The turnover of capital ratio, which measures net sales relative to invested capital, reflects the efficiency of asset use. It fluctuates throughout the periods but remains mostly strong. Initial turnover was 5.62 times, increasing to a peak of 7.57 in one of the later periods before settling at 7.1. This suggests that despite variations in invested capital, the company has generally improved or maintained its ability to generate sales from its capital employed.

Net Sales

Steady growth year-over-year, indicating expanding revenue streams and possibly market share.

Invested Capital

Rising trend with intermediate dips, suggesting periods of capital adjustment or efficiency measures.

Turnover of Capital (TO)

Maintains a high level overall, with peaks and minor declines, showing effective utilization of capital to maximize net sales.

Overall, the data reflects a robust financial performance characterized by expanding sales and reasonable growth in invested capital, supported by consistently efficient capital turnover. This pattern indicates positive operational dynamics and effective asset management across the reported periods.

The financial data reveals a consistent increase in both cash operating taxes and net operating profit before taxes over the six-year period. Cash operating taxes rose steadily from $1,246 million in 2020 to $2,750 million in 2025, more than doubling over this timeframe. This upward trajectory indicates an increasing tax burden, likely associated with higher profitability.

Net operating profit before taxes (NOPBT) demonstrates overall growth from $5,500 million in 2020 to $10,584 million in 2025. Despite a slight decline noted between 2022 and 2023, where the NOPBT dropped from $8,436 million to $7,804 million, the subsequent years show a recovery and continuation of the upward trend. This pattern suggests that the company experienced a temporary slowdown in profitability but managed to regain and surpass previous profit levels by 2025.

The effective cash tax rate (CTR) fluctuates within a relatively narrow band, ranging from 22.65% in 2020 to a peak of 27.04% in 2023, followed by a slight decrease to around 26% in the two subsequent years. The gradual increase in the tax rate up to 2023 may reflect changes in tax regulations or company-specific factors affecting taxable income. The subsequent minor decline indicates some stabilization or tax planning effectiveness in the later periods.

Cash Operating Taxes

Increased consistently each year, more than doubling from 2020 to 2025, signaling higher tax payments associated with growing earnings.

Net Operating Profit Before Taxes (NOPBT)

Exhibited strong growth overall, despite a temporary dip in 2023, indicating resilience and recovery in operational profitability.

Effective Cash Tax Rate (CTR)

Displayed modest variability with a peak in 2023, suggesting fluctuating tax conditions but remained within a stable range around 23-27%.