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Costco Wholesale Corp. (COST)
Short-term (Operating) Activity Analysis
Difficulty: Beginner
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
Costco Wholesale Corp., short-term (operating) activity 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 |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Costco Wholesale Corp.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Costco Wholesale Corp.’s receivables turnover deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Costco Wholesale Corp.’s payables turnover declined from 2016 to 2017 and from 2017 to 2018. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. |
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Costco Wholesale Corp.’s average payables payment period increased from 2016 to 2017 and from 2017 to 2018. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Costco Wholesale Corp.’s cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018. |
Inventory Turnover
Costco Wholesale Corp., inventory turnover calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Merchandise costs | |
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| Merchandise inventories | |
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| Ratio | |||||||
| Inventory turnover1 | |
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| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |
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| Home Depot Inc. | |
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| Lowe’s Cos. Inc. | |
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| Target Corp. | |
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| TJX Cos. Inc. | |
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| Walmart Inc. | |
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| Inventory Turnover, Sector | |||||||
| General Retailers | |
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| Inventory Turnover, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Inventory turnover = Merchandise costs ÷ Merchandise inventories
= ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Costco Wholesale Corp.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018. |
Receivables Turnover
Costco Wholesale Corp., receivables turnover calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net sales | |
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| Receivables, net | |
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| Ratio | |||||||
| Receivables turnover1 | |
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| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |
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| eBay Inc. | |
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| Home Depot Inc. | |
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| Lowe’s Cos. Inc. | |
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| Netflix Inc. | |
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| Target Corp. | |
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| TJX Cos. Inc. | |
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| Walmart Inc. | |
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| Receivables Turnover, Sector | |||||||
| General Retailers | |
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| Receivables Turnover, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Receivables turnover = Net sales ÷ Receivables, net
= ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Costco Wholesale Corp.’s receivables turnover deteriorated from 2016 to 2017 and from 2017 to 2018. |
Payables Turnover
Costco Wholesale Corp., payables turnover calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Merchandise costs | |
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| Accounts payable | |
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| Ratio | |||||||
| Payables turnover1 | |
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| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |
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| eBay Inc. | |
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| Home Depot Inc. | |
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| Lowe’s Cos. Inc. | |
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| Netflix Inc. | |
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| Target Corp. | |
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| TJX Cos. Inc. | |
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| Walmart Inc. | |
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| Payables Turnover, Sector | |||||||
| General Retailers | |
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| Payables Turnover, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Payables turnover = Merchandise costs ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Costco Wholesale Corp.’s payables turnover declined from 2016 to 2017 and from 2017 to 2018. |
Working Capital Turnover
Costco Wholesale Corp., working capital turnover calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Current assets | |
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| Less: Current liabilities | |
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| Working capital | |
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| Net sales | |
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| Ratio | |||||||
| Working capital turnover1 | |
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| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |
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| eBay Inc. | |
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| Home Depot Inc. | |
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| Lowe’s Cos. Inc. | |
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| Netflix Inc. | |
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| Target Corp. | |
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| TJX Cos. Inc. | |
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| Walmart Inc. | |
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| Working Capital Turnover, Sector | |||||||
| General Retailers | |
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| Working Capital Turnover, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Working capital turnover = Net sales ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. |
Average Inventory Processing Period
Costco Wholesale Corp., average inventory processing period calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | |
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| Ratio (no. of days) | |||||||
| Average inventory processing period1 | |
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| Benchmarks (no. of days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Amazon.com Inc. | |
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| Home Depot Inc. | |
|
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|
|
|
|
| Lowe’s Cos. Inc. | |
|
|
|
|
|
|
| Target Corp. | |
|
|
|
|
|
|
| TJX Cos. Inc. | |
|
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|
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|
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| Walmart Inc. | |
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| Average Inventory Processing Period, Sector | |||||||
| General Retailers | |
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| Average Inventory Processing Period, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Average Receivable Collection Period
Costco Wholesale Corp., average receivable collection period calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | |
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| Ratio (no. of days) | |||||||
| Average receivable collection period1 | |
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| Benchmarks (no. of days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Amazon.com Inc. | |
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| eBay Inc. | |
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|
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| Home Depot Inc. | |
|
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|
|
|
|
| Lowe’s Cos. Inc. | |
|
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|
|
|
|
| Netflix Inc. | |
|
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|
|
|
|
| Target Corp. | |
|
|
|
|
|
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| TJX Cos. Inc. | |
|
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|
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| Walmart Inc. | |
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| Average Receivable Collection Period, Sector | |||||||
| General Retailers | |
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| Average Receivable Collection Period, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. |
Operating Cycle
Costco Wholesale Corp., operating cycle calculation, comparison to benchmarks
No. of days
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | |
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| Average receivable collection period | |
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| Ratio | |||||||
| Operating cycle1 | |
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| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Amazon.com Inc. | |
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| Home Depot Inc. | |
|
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|
|
|
| Lowe’s Cos. Inc. | |
|
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|
|
|
|
| Target Corp. | |
|
|
|
|
|
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| TJX Cos. Inc. | |
|
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| Walmart Inc. | |
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| Operating Cycle, Sector | |||||||
| General Retailers | |
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| Operating Cycle, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. |
Average Payables Payment Period
Costco Wholesale Corp., average payables payment period calculation, comparison to benchmarks
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | |
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| Ratio (no. of days) | |||||||
| Average payables payment period1 | |
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| Benchmarks (no. of days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Amazon.com Inc. | |
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|
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| eBay Inc. | |
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|
|
| Home Depot Inc. | |
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|
|
|
|
| Lowe’s Cos. Inc. | |
|
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|
|
|
|
| Netflix Inc. | |
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|
|
|
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| Target Corp. | |
|
|
|
|
|
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| TJX Cos. Inc. | |
|
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|
|
|
|
| Walmart Inc. | |
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|
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| Average Payables Payment Period, Sector | |||||||
| General Retailers | |
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| Average Payables Payment Period, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Costco Wholesale Corp.’s average payables payment period increased from 2016 to 2017 and from 2017 to 2018. |
Cash Conversion Cycle
Costco Wholesale Corp., cash conversion cycle calculation, comparison to benchmarks
No. of days
| Sep 2, 2018 | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | |
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| Average receivable collection period | |
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| Average payables payment period | |
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| Ratio | |||||||
| Cash conversion cycle1 | |
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| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Amazon.com Inc. | |
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| Home Depot Inc. | |
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|
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| Lowe’s Cos. Inc. | |
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|
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| Target Corp. | |
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| TJX Cos. Inc. | |
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| Walmart Inc. | |
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| Cash Conversion Cycle, Sector | |||||||
| General Retailers | |
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| Cash Conversion Cycle, Industry | |||||||
| Consumer Services | |
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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).
1 2018 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Costco Wholesale Corp.’s cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018. |