Costco Wholesale Corp. (NASDAQ:COST)

Current Ratio

The current ratio exhibits a generally stable trend slightly above 1.0 over the observed periods, indicating a consistent capability to cover short-term liabilities with current assets. Starting at 0.98, the ratio gradually increased to peak around 1.09 in early 2024 before experiencing a minor decline but recovering above 1.0 towards mid-2025. This stability suggests effective management of working capital, with occasional improvements possibly linked to seasonal or operational factors.

Quick Ratio

The quick ratio shows more variability but remains below 0.6 throughout the periods, reflecting a more conservative liquidity position when inventory is excluded. Initial values near 0.49 dipped to around 0.38-0.4 during early to mid-2024, the lowest observed, before recovering steadily to approximately 0.5 by mid-2025. This pattern may imply fluctuations in liquid assets or changes in current liabilities, with cautious liquidity management excluding less liquid inventory assets.

Cash Ratio

The cash ratio remains the lowest among the liquidity measures, mostly fluctuating between 0.3 and 0.5. Beginning near 0.44, it declined to a low of about 0.3 in early 2024, mirroring trends observed in the quick ratio, before climbing back to near 0.41 by the end of the period. This indicates that immediate cash and cash equivalents provide partial coverage for current liabilities, with periods of lower cash reserves potentially reflecting operational spend or investment activities, followed by replenishments.

Current Assets

Current assets showed fluctuations over the observed periods, initially decreasing from approximately 32,096 million USD to 26,308 million USD in early 2021 before generally increasing, reaching a peak of about 40,080 million USD near the end of 2023. However, after this peak, there was a notable decline observed in early 2024, with assets dropping back to around 32,146 million USD, followed by a steady upward trend through mid-2025, ending close to 38,380 million USD.

Current Liabilities

Current liabilities exhibited a pattern similar to current assets, with an initial drop from approximately 32,667 million USD to 26,564 million USD followed by a general increase. These liabilities peaked at about 36,768 million USD around late 2023. Subsequently, they showed some volatility but overall declined slightly through the first half of 2025, ending near 37,108 million USD.

Current Ratio

The current ratio remained relatively stable throughout the periods, hovering around 1.00 with only minor variations. It started near 0.98, gradually improved to levels just above 1.08 during late 2022 and early 2023, indicating a strengthening short-term liquidity position. However, a dip occurred in early 2024, with the ratio falling below 1.00 to approximately 0.93, suggesting a momentary tightening in liquidity. Following this dip, the ratio recovered steadily, reaching about 1.03 by mid-2025, denoting improved ability to cover current liabilities with current assets.

Overall Analysis

The financial data indicates that both current assets and current liabilities increased over the medium term, with peaks observed near the end of 2023, followed by a period of reduction and subsequent stabilization and growth into 2025. The current ratio’s fluctuations suggest that although liquidity experienced periods of tightening and improvement, the company maintained a generally balanced position between assets and liabilities. The brief decline in the current ratio below 1.00 in early 2024 could suggest temporary pressure on short-term liquidity, but the subsequent recovery indicates effective management of working capital.

The analysis of the quarterly financial data reveals several notable trends related to liquidity and short-term financial position.

Total Quick Assets

Total quick assets displayed an overall fluctuating but gradually increasing pattern over the reported quarters. Starting at 16,069 million USD in November 2020, values generally increased with some intermittent decreases, reaching a peak of 20,406 million USD in November 2023. Following this peak, there was a marked decline to 13,100 million USD by February 2024, after which the figure stabilized and rose again, ending at 18,487 million USD by August 2025.

Current Liabilities

The current liabilities showed a consistent upward trend across the periods. The amount increased from 32,667 million USD at the end of 2020 to a high of 38,289 million USD in November 2024, with some minor fluctuations. Toward the latest quarters, the liabilities slightly declined, finishing at 37,108 million USD in August 2025. This trend suggests a growing short-term obligation load over time.

Quick Ratio

The quick ratio, which measures the ability to cover current liabilities with the most liquid assets, exhibited variability throughout the periods. It started at 0.49, declined to as low as 0.38 in February 2024, coinciding with the dip in quick assets, and then showed improvement toward the later quarters, reaching 0.5 in August 2025. Most values hovered below 0.6, indicating that liquid assets consistently remained less than current liabilities by a notable margin.

Overall, while quick assets have experienced ups and downs, the steady increase in current liabilities suggests increasing short-term financial obligations. The quick ratio's fluctuations reflect this dynamic, with periods indicating tighter liquidity positions. The recent improvement in the quick ratio suggests measures toward restoring liquidity balance, although the ratio still implies reliance on other sources beyond quick assets to meet short-term liabilities.

The analysis of the quarterly financial data reveals several notable trends for the company over the examined periods.

Total Cash Assets

Total cash assets show a fluctuating but generally increasing pattern from November 2020 through September 2023, peaking notably at 17,864 million USD in November 2023. However, after this peak, there is a significant decline recorded in February 2024 to 10,321 million USD. Following this sharp drop, cash assets recover gradually, reaching 15,284 million USD by August 2025. This volatility suggests periods of both strong liquidity accumulation and substantial cash outflows or investments.

Current Liabilities

Current liabilities demonstrate a consistent upward trend across the entire time frame, beginning at 32,667 million USD in November 2020 and rising steadily to a peak of 38,289 million USD in November 2024, followed by a slight decrease to 37,108 million USD by August 2025. The general increase in current liabilities may indicate higher short-term obligations, possibly tied to increased operational scale or financing needs.

Cash Ratio

The cash ratio exhibits a somewhat cyclical behavior with values fluctuating between 0.3 and 0.49. Initially, the ratio decreases from 0.44 in November 2020 to a low near 0.35 by August 2022, reflecting relatively lower liquidity compared to current liabilities. This is followed by a notable improvement, peaking at 0.49 in November 2023, coinciding with the peak in total cash assets. Subsequently, the ratio falls sharply to 0.3 in February 2024 alongside the decline in cash assets, before gradually recovering to 0.41 by August 2025. This indicates periods of strengthening and weakening liquidity relative to short-term obligations.

Overall, the data suggests that while current liabilities have steadily increased, the company has managed periods of robust liquidity as seen in rising cash assets and corresponding higher cash ratios. The significant cash asset decline and cash ratio drop in early 2024 may warrant further investigation to understand the underlying causes, such as large expenditures or changes in operational strategy. The gradual recovery afterward points toward regained liquidity strength. Maintaining or improving the cash ratio amid growing current liabilities remains important for sustaining short-term financial health.