Costco Wholesale Corp. (NASDAQ:COST)

Debt to Equity

The debt to equity ratio demonstrates a declining trend over the period analyzed, moving from 0.48 in 2019 to 0.31 in both 2023 and 2024. This indicates a gradual reduction in reliance on debt relative to shareholders' equity.

Debt to Equity (Including Operating Lease Liability)

When operating lease liabilities are included, the ratio starts higher at 0.48 in 2019, peaks at 0.65 in 2021, and then decreases to 0.42 by 2023 and remains stable into 2024. This pattern suggests that lease obligations contributed notably to leverage until 2021, after which the company reduced its lease-related and other debt exposures.

Debt to Capital

The debt to capital ratio displays a moderate downward trend from 0.32 in 2019 to 0.24 in 2023 and 2024. This suggests the company is gradually lowering the proportion of debt in its overall capital structure.

Debt to Capital (Including Operating Lease Liability)

This metric starts at 0.32 in 2019, rises to 0.39 in 2021, and then declines to 0.30 by 2023 and 2024. The higher intermediate values reflect the impact of operating lease liabilities, which were more substantial around 2020-2021 but have since been managed down.

Debt to Assets

The ratio of debt to assets has consistently decreased from 0.16 in 2019 to 0.11 in 2023 and 2024, indicating a reduction in leverage when viewed against the total asset base.

Debt to Assets (Including Operating Lease Liability)

Including operating lease liabilities, this ratio increased to 0.20 in 2020 and then gradually fell to 0.14 in 2024, showing that lease obligations temporarily increased leverage ratios but were subsequently reduced.

Financial Leverage

Financial leverage has fluctuated but shows an overall stable pattern. It remained close to or slightly above 3.0 for much of the period, dipping to 2.75 in 2023 and then rising again to 2.96 in 2024, suggesting relatively consistent use of debt relative to equity.

Interest Coverage

Interest coverage ratios show a strong and continuous increase from 32.77 in 2019 to 58.63 in 2024. This reflects a significant enhancement in the company’s ability to meet interest obligations through operating earnings, indicating improved profitability or reduced interest expense over time.

Fixed Charge Coverage

Fixed charge coverage likewise has improved markedly, rising from 12.4 in 2019 to 22.5 in 2024, suggesting enhanced capacity to cover fixed financial expenses, including interest and lease payments, by operating earnings.

Total Debt

The total debt of the company increased from 7,244 million USD in 2019 to a peak of 8,543 million USD in 2021. Following this peak, there was a declining trend with debt decreasing to 7,395 million USD by 2024. This indicates a reduction in leverage after 2021.

Total Costco Stockholders’ Equity

Stockholders’ equity showed a consistent upward trend from 15,243 million USD in 2019 to a high of 25,058 million USD in 2023. Although there was a slight dip to 23,622 million USD in 2024, the overall growth over the period is significant, signaling strengthening financial stability.

Debt to Equity Ratio

The debt to equity ratio decreased steadily from 0.48 in 2019 to 0.31 in 2024. This decline reflects the company's strategy to reduce financial leverage, likely through a combination of managing debt levels and increasing equity. The ratio reduction emphasizes greater equity backing relative to debt over time.

The financial data reveals several notable trends over the analyzed periods. Total debt, including operating lease liability, shows an overall increase from 2019 to 2021, rising from $7,244 million to $11,407 million. Following this peak, total debt gradually declines over the next three years, reaching $9,949 million in 2024. This suggests an initial phase of increased leverage or expansion, followed by a reduction in debt levels.

Stockholders’ equity demonstrates a consistent upward trend over the six-year span. Beginning at $15,243 million in 2019, equity increases steadily to $18,284 million in 2020, slightly dips to $17,564 million in 2021, then rises more significantly to a peak of $25,058 million in 2023 before a minor decrease to $23,622 million in 2024. This pattern indicates growth in the company’s net assets, with minor fluctuations that could reflect changes in retained earnings, stock issuance, or other equity adjustments.

The debt to equity ratio, which measures financial leverage, fluctuates in alignment with changes in debt and equity. The ratio increases from 0.48 in 2019 to a high of 0.65 in 2021, signaling a period of higher debt relative to equity. Subsequently, the ratio declines sharply to 0.42 in 2023 and remains stable at that level in 2024. This decline indicates a reduction in leverage, suggesting a stronger equity base relative to debt, which may imply a more conservative capital structure or improved financial stability in recent years.

Total Debt

Increased notably from 2019 to 2021, followed by a gradual reduction through 2024.

Stockholders’ Equity

Exhibited a strong upward trend overall, with minor variations between 2020 and 2024.

Debt to Equity Ratio

Peaked in 2021 indicating higher leverage, then declined and stabilized at a lower level by 2023 and 2024.

In summary, the data suggests that after a period of elevated borrowing, the company has progressively reduced its debt while continuing to grow its equity base, resulting in a more balanced and potentially lower-risk capital structure in the latest years analyzed.

Total Debt

The total debt showed a general upward trend from 2019 to 2021, increasing from $7,244 million to $8,543 million. However, after 2021, there was a consistent decline in total debt, falling to $7,395 million by 2024. This indicates a strategy of debt reduction or refinancing over the latter years.

Total Capital

Total capital exhibited an overall growth trajectory during the period. Starting at $22,487 million in 2019, it increased steadily with a peak at $32,948 million in 2023 before a slight decrease to $31,017 million in 2024. This pattern suggests expansion in capital resources or equity financing, with a marginal contraction in the most recent year.

Debt to Capital Ratio

The debt to capital ratio displayed a gradual decline over the years. From 0.32 in 2019, it dipped slightly to 0.31 in 2020, then increased to 0.33 in 2021, before declining more significantly to 0.28 in 2022 and stabilizing at 0.24 in both 2023 and 2024. This trend reflects a decreasing reliance on debt financing relative to total capital, indicating improved financial leverage and potentially stronger solvency.

The analysis of the annual financial data reveals several key trends regarding debt and capital structure over the observed periods.

Total debt (including operating lease liability)

The total debt increased significantly from 7,244 million USD in 2019 to a peak of 11,407 million USD in 2021. Following this peak, the total debt showed a decreasing trend, declining steadily to 9,949 million USD by 2024. This suggests a strategic effort to manage or reduce debt levels in recent years after a period of increased leverage.

Total capital (including operating lease liability)

Total capital displayed a generally upward trajectory, rising from 22,487 million USD in 2019 to a high of 35,594 million USD in 2023. However, in 2024, total capital experienced a slight decline to 33,571 million USD. Despite this mild decrease, the overall increase in capital indicates growth in the company's financial resources and possibly its asset base or retained earnings capacity.

Debt to capital (including operating lease liability)

The debt to capital ratio increased from 0.32 in 2019 to 0.39 in 2021, reflecting a higher proportion of debt financing during that period. Subsequently, the ratio declined to 0.30 by 2023 and remained stable through 2024, indicating an improvement in the company’s capital structure with less reliance on debt. This trend suggests enhanced financial stability and a lower risk profile associated with debt levels relative to capital.

In summary, the company initially increased its debt burden considerably until 2021 but has since moderated its leverage by reducing total debt and improving its debt to capital ratio. Meanwhile, total capital generally grew, supporting an overall trend toward a stronger and more balanced financial position as of the latest period reported.

Total Debt

The total debt experienced an increase from 7,244 million USD in 2019 to a peak of 8,543 million USD in 2021. After this peak, debt levels gradually declined over the following years, reaching 7,395 million USD by 2024. This indicates a reduction in financial leverage following the 2021 peak.

Total Assets

Total assets showed consistent growth throughout the entire period. Starting at 45,400 million USD in 2019, assets increased steadily each year, reaching 69,831 million USD by 2024. This reflects an overall expansion in the company's asset base.

Debt to Assets Ratio

The debt to assets ratio declined steadily over the analyzed period, from 0.16 in 2019 to 0.11 in 2024. This decrease implies an improvement in the company's capital structure, with debt representing a smaller proportion of total assets despite the slight fluctuations in absolute debt levels.

Total Debt (Including Operating Lease Liability)

The total debt showed a marked increase from 2019 to 2020, rising sharply from 7,244 million USD to 11,086 million USD. This elevated level of debt remained relatively stable through 2021 and 2022, with minor fluctuations, decreasing slightly to 9,949 million USD by 2024. Overall, there is an observable peak in 2020 followed by a gradual decline in debt levels over the subsequent years.

Total Assets

Total assets consistently increased each year, beginning at 45,400 million USD in 2019 and reaching 69,831 million USD by 2024. The asset base expanded substantially across the period, reflecting sustained growth in the company’s asset holdings year over year.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio rose from 0.16 in 2019 to a peak of 0.20 in 2020, indicating an increased reliance on debt relative to assets in that year. After 2020, the ratio gradually decreased each year, falling to 0.14 by 2024, which shows a reduction in financial leverage and an improving balance between debt and asset levels over time.

Summary

The data portrays a period of increased indebtedness in 2020, followed by a deliberate reduction in debt relative to assets in subsequent years. During the same period, total assets expanded robustly, suggesting ongoing investments and growth. The improving debt to assets ratio implies enhanced financial stability and a conservative approach to leverage after the 2020 peak.

The analysis of the financial data reveals notable trends in the company's asset base, equity, and leverage over the six-year period ending in 2024.

Total Assets

The total assets consistently increased from 45,400 million US dollars in 2019 to 69,831 million US dollars in 2024. This reflects a steady growth trajectory, with year-over-year increments ranging roughly between 2.5% and 22.3%. The most significant growth occurred between 2019 and 2020, and the trend remained positive throughout the period.

Total Costco Stockholders’ Equity

Stockholders' equity exhibited an overall upward trend, rising from 15,243 million US dollars in 2019 to a peak of 25,058 million US dollars in 2023. However, it slightly decreased to 23,622 million US dollars in 2024. This fluctuation suggests strong capital accumulation through 2023, followed by a minor contraction in the most recent year.

Financial Leverage

The financial leverage ratio fluctuated during the period but remained relatively stable around values close to 3. The ratio increased from 2.98 in 2019 to a high of 3.37 in 2021, indicating a rise in the use of debt or other liabilities relative to equity. Subsequently, it declined to 2.75 in 2023, before moving back up to 2.96 in 2024. This stability points to a balanced approach towards leverage despite changes in asset and equity levels.

In summary, the data shows continuous asset growth accompanied by a generally increasing, albeit somewhat fluctuating, equity base. The leverage ratio's variance suggests management actively adjusts the capital structure while maintaining conservative risk levels through controlled use of debt relative to equity.

The financial data indicates a consistent upward trend in the Earnings Before Interest and Tax (EBIT) for the company over the six-year period from 2019 to 2024. EBIT increased steadily each year, rising from $4,915 million in 2019 to $9,909 million in 2024. This demonstrates a robust growth trajectory in the company's operational profitability, nearly doubling over the analyzed timeframe.

Interest expense has remained relatively stable throughout the same period. The figures fluctuate slightly, moving from $150 million in 2019 to $169 million in 2024, with minor increases and decreases in intermediate years. This suggests the company has maintained a consistent cost of debt without significant increases in borrowing costs or debt levels.

The interest coverage ratio, which measures the company's ability to meet interest obligations from its EBIT, shows a strong improvement over the years. This ratio increased from 32.77 in 2019 to 58.63 in 2024. The rising ratio is primarily driven by the growth in EBIT, indicating enhanced capacity to cover interest expenses, thus reflecting improved financial health and lower credit risk.

EBIT Trend

Steady annual growth, nearly doubling from 2019 to 2024.

Interest Expense

Relatively stable with minor fluctuations, indicating consistent debt costs.

Interest Coverage Ratio

Strong upward trend, more than doubling, denoting improved ability to service debt.

The earnings before fixed charges and tax have demonstrated a consistent upward trend over the analyzed periods. Starting from 5,183 million US dollars in the fiscal year ending September 1, 2019, the earnings increased steadily each year, reaching 10,193 million US dollars by September 1, 2024. This reflects an overall strengthening in operational profitability before accounting for fixed financial obligations.

Fixed charges have remained relatively stable throughout the period, fluctuating slightly but without a clear upward or downward pattern. The values ranged between 412 million and 469 million US dollars, presenting small variances year to year which suggest relatively consistent fixed financial costs.

The fixed charge coverage ratio, which measures the ability to cover fixed charges from earnings, has shown a strong improving trend. Starting at 12.4 in 2019, the ratio rose annually to reach 22.5 by 2024. This indicates an increasing capacity of the company to meet its fixed financial charges comfortably, implying improved financial stability and reduced credit risk related to fixed obligations over the timeframe.

Summary:

The consistent increase in earnings before fixed charges and tax accompanied by stable fixed charges contributes to an enhanced fixed charge coverage ratio. This reflects positive operational performance and a stronger ability to service fixed financial commitments over the years.