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Profitability Analysis
Difficulty: Beginner
Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Costco Wholesale Corp., profitability ratios
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 |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Costco Wholesale Corp.'s gross profit margin deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Costco Wholesale Corp.'s operating profit margin improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Costco Wholesale Corp.'s net profit margin improved from 2016 to 2017 and from 2017 to 2018. |
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Costco Wholesale Corp.'s ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Costco Wholesale Corp.'s ROA improved from 2016 to 2017 and from 2017 to 2018. |
Gross Profit Margin
Costco Wholesale Corp., gross profit margin calculation
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 Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Costco Wholesale Corp.'s gross profit margin deteriorated from 2016 to 2017 and from 2017 to 2018. |
Operating Profit Margin
Costco Wholesale Corp., operating profit margin calculation, comparison to benchmarks
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 Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Costco Wholesale Corp.'s operating profit margin improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
Net Profit Margin
Costco Wholesale Corp., net profit margin calculation, comparison to benchmarks
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 Net profit margin = 100 × Net income attributable to Costco ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Costco Wholesale Corp.'s net profit margin improved from 2016 to 2017 and from 2017 to 2018. |
Return on Equity (ROE)
Costco Wholesale Corp., ROE calculation, comparison to benchmarks
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 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Costco Wholesale Corp.'s ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
Return on Assets (ROA)
Costco Wholesale Corp., ROA calculation, comparison to benchmarks
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 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Costco Wholesale Corp.'s ROA improved from 2016 to 2017 and from 2017 to 2018. |
