Short-term (Operating) Activity Analysis
Quarterly Data

Difficulty: Beginner


Ratios (Summary)

Costco Wholesale Corp., short-term (operating) activity ratios (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Turnover Ratios
Inventory turnover 11.40 11.06 10.27 11.38 10.97 11.02 9.66 11.47 11.46 11.44 9.76 11.35 11.39 11.79 10.37 11.64 11.30 11.41 9.97 11.65 12.02 11.90 10.87 12.24
Receivables turnover 85.61 66.45 83.27 88.11 82.45 74.19 78.05 92.71 88.72 78.94 83.89 92.86 94.92 87.91 89.77 96.00 96.17 84.84 90.95 85.65 90.50 77.63 84.33 94.60
Payables turnover 11.32 11.73 9.61 11.64 11.34 11.98 9.41 13.52 11.59 12.39 9.76 11.22 11.36 12.15 10.22 11.60 11.46 12.24 10.11 11.68 11.78 12.13 10.04 11.89
Working capital turnover 483.61 1,194.83 201.79 149.76 126.31 35.71 34.70 37.68 38.38 41.00 39.83 43.60 48.87 78.02 76.67
Average No. of Days
Average inventory processing period 32 33 36 32 33 33 38 32 32 32 37 32 32 31 35 31 32 32 37 31 30 31 34 30
Add: Average receivable collection period 4 5 4 4 4 5 5 4 4 5 4 4 4 4 4 4 4 4 4 4 4 5 4 4
Operating cycle 36 38 40 36 37 38 43 36 36 37 41 36 36 35 39 35 36 36 41 35 34 36 38 34
Less: Average payables payment period 32 31 38 31 32 30 39 27 31 29 37 33 32 30 36 31 32 30 36 31 31 30 36 31
Cash conversion cycle 4 7 2 5 5 8 4 9 5 8 4 3 4 5 3 4 4 6 5 4 3 6 2 3
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports
Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Costco Wholesale Corp.'s inventory turnover improved from Q1 2018 to Q2 2018 and from Q2 2018 to Q3 2018.
Receivables turnover An activity ratio equal to revenue divided by receivables. Costco Wholesale Corp.'s receivables turnover deteriorated from Q1 2018 to Q2 2018 but then improved from Q2 2018 to Q3 2018 exceeding Q1 2018 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Costco Wholesale Corp.'s payables turnover increased from Q1 2018 to Q2 2018 but then slightly declined from Q2 2018 to Q3 2018.
Working capital turnover An activity ratio calculated as revenue divided by working capital.
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Costco Wholesale Corp.'s average inventory processing period improved from Q1 2018 to Q2 2018 and from Q2 2018 to Q3 2018.
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. Costco Wholesale Corp.'s operating cycle improved from Q1 2018 to Q2 2018 and from Q2 2018 to Q3 2018.
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 declined from Q1 2018 to Q2 2018 but then slightly increased from Q2 2018 to Q3 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 deteriorated from Q1 2018 to Q2 2018 but then improved from Q2 2018 to Q3 2018 not reaching Q1 2018 level.

Inventory Turnover

Costco Wholesale Corp., inventory turnover calculation (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data (USD $ in millions)
Merchandise costs 28,131  28,733  27,617  36,697  24,970  25,927  24,288  31,649  23,162  24,469  23,621  31,096  22,687  23,897  23,385  31,037  22,554  23,043  21,824  28,418  21,038  21,766  20,726  28,210  19,543  20,139  18,931 
Merchandise inventories 10,626  10,671  11,213  9,834  9,736  9,530  10,721  8,969  8,927  8,908  10,382  8,908  8,869  8,558  9,644  8,456  8,483  8,267  9,337  7,894  7,635  7,582  8,152  7,096  7,044  6,934  7,618 
Ratio
Inventory turnover1 11.40 11.06 10.27 11.38 10.97 11.02 9.66 11.47 11.46 11.44 9.76 11.35 11.39 11.79 10.37 11.64 11.30 11.41 9.97 11.65 12.02 11.90 10.87 12.24
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Inventory turnover = (Merchandise costsQ3 2018 + Merchandise costsQ2 2018 + Merchandise costsQ1 2018 + Merchandise costsQ4 2017) ÷ Merchandise inventories
= (28,131 + 28,733 + 27,617 + 36,697) ÷ 10,626 = 11.40

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Costco Wholesale Corp.'s inventory turnover improved from Q1 2018 to Q2 2018 and from Q2 2018 to Q3 2018.

Receivables Turnover

Costco Wholesale Corp., receivables turnover calculation (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data (USD $ in millions)
Net sales 31,624  32,279  31,117  41,357  28,216  29,130  27,469  35,728  26,151  27,567  26,627  34,993  25,517  26,872  26,284  34,755  25,233  25,756  24,468  31,771  23,552  24,343  23,204  31,524  21,849  22,508  21,181 
Receivables, net 1,593  2,001  1,559  1,432  1,462  1,597  1,498  1,252  1,300  1,453  1,359  1,224  1,195  1,287  1,248  1,148  1,115  1,244  1,145  1,201  1,134  1,300  1,175  1,026  1,018  1,092  982 
Ratio
Receivables turnover1 85.61 66.45 83.27 88.11 82.45 74.19 78.05 92.71 88.72 78.94 83.89 92.86 94.92 87.91 89.77 96.00 96.17 84.84 90.95 85.65 90.50 77.63 84.33 94.60
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Receivables turnover = (Net salesQ3 2018 + Net salesQ2 2018 + Net salesQ1 2018 + Net salesQ4 2017) ÷ Receivables, net
= (31,624 + 32,279 + 31,117 + 41,357) ÷ 1,593 = 85.61

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Costco Wholesale Corp.'s receivables turnover deteriorated from Q1 2018 to Q2 2018 but then improved from Q2 2018 to Q3 2018 exceeding Q1 2018 level.

Payables Turnover

Costco Wholesale Corp., payables turnover calculation (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data (USD $ in millions)
Merchandise costs 28,131  28,733  27,617  36,697  24,970  25,927  24,288  31,649  23,162  24,469  23,621  31,096  22,687  23,897  23,385  31,037  22,554  23,043  21,824  28,418  21,038  21,766  20,726  28,210  19,543  20,139  18,931 
Accounts payable 10,705  10,061  11,992  9,608  9,425  8,764  11,003  7,612  8,828  8,222  10,378  9,011  8,895  8,302  9,783  8,491  8,361  7,707  9,199  7,872  7,788  7,441  8,825  7,303  7,302  6,334  7,576 
Ratio
Payables turnover1 11.32 11.73 9.61 11.64 11.34 11.98 9.41 13.52 11.59 12.39 9.76 11.22 11.36 12.15 10.22 11.60 11.46 12.24 10.11 11.68 11.78 12.13 10.04 11.89
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Payables turnover = (Merchandise costsQ3 2018 + Merchandise costsQ2 2018 + Merchandise costsQ1 2018 + Merchandise costsQ4 2017) ÷ Accounts payable
= (28,131 + 28,733 + 27,617 + 36,697) ÷ 10,705 = 11.32

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Costco Wholesale Corp.'s payables turnover increased from Q1 2018 to Q2 2018 but then slightly declined from Q2 2018 to Q3 2018.

Working Capital Turnover

Costco Wholesale Corp., working capital turnover calculation (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data (USD $ in millions)
Current assets 19,693  18,899  19,897  17,317  17,256  17,460  18,570  15,218  16,542  15,529  18,858  17,299  17,634  18,058  19,156  17,588  17,533  16,634  17,473  15,840  15,863  15,110  15,405  13,526  14,591  14,360  14,993 
Less: Current liabilities 19,411  18,913  20,360  17,495  21,394  18,860  19,161  15,575  16,999  15,433  18,293  16,540  16,736  18,249  16,019  14,412  14,687  13,884  14,933  13,257  13,509  13,045  14,135  12,260  12,366  12,409  13,311 
Working capital 282  (14) (463) (178) (4,138) (1,400) (591) (357) (457) 96  565  759  898  (191) 3,137  3,176  2,846  2,750  2,540  2,583  2,354  2,065  1,270  1,266  2,225  1,951  1,682 
Net sales 31,624  32,279  31,117  41,357  28,216  29,130  27,469  35,728  26,151  27,567  26,627  34,993  25,517  26,872  26,284  34,755  25,233  25,756  24,468  31,771  23,552  24,343  23,204  31,524  21,849  22,508  21,181 
Ratio
Working capital turnover1 483.61 1,194.83 201.79 149.76 126.31 35.71 34.70 37.68 38.38 41.00 39.83 43.60 48.87 78.02 76.67
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Working capital turnover = (Net salesQ3 2018 + Net salesQ2 2018 + Net salesQ1 2018 + Net salesQ4 2017) ÷ Working capital
= (31,624 + 32,279 + 31,117 + 41,357) ÷ 282 = 483.61

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 (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data
Inventory turnover 11.40 11.06 10.27 11.38 10.97 11.02 9.66 11.47 11.46 11.44 9.76 11.35 11.39 11.79 10.37 11.64 11.30 11.41 9.97 11.65 12.02 11.90 10.87 12.24
Ratio (no. of days)
Average inventory processing period1 32 33 36 32 33 33 38 32 32 32 37 32 32 31 35 31 32 32 37 31 30 31 34 30
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 11.40 = 32

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. Costco Wholesale Corp.'s average inventory processing period improved from Q1 2018 to Q2 2018 and from Q2 2018 to Q3 2018.

Average Receivable Collection Period

Costco Wholesale Corp., average receivable collection period calculation (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data
Receivables turnover 85.61 66.45 83.27 88.11 82.45 74.19 78.05 92.71 88.72 78.94 83.89 92.86 94.92 87.91 89.77 96.00 96.17 84.84 90.95 85.65 90.50 77.63 84.33 94.60
Ratio (no. of days)
Average receivable collection period1 4 5 4 4 4 5 5 4 4 5 4 4 4 4 4 4 4 4 4 4 4 5 4 4
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 85.61 = 4

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 (quarterly data)

No. of days

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data
Average inventory processing period 32 33 36 32 33 33 38 32 32 32 37 32 32 31 35 31 32 32 37 31 30 31 34 30
Average receivable collection period 4 5 4 4 4 5 5 4 4 5 4 4 4 4 4 4 4 4 4 4 4 5 4 4
Ratio
Operating cycle1 36 38 40 36 37 38 43 36 36 37 41 36 36 35 39 35 36 36 41 35 34 36 38 34
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 32 + 4 = 36

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Costco Wholesale Corp.'s operating cycle improved from Q1 2018 to Q2 2018 and from Q2 2018 to Q3 2018.

Average Payables Payment Period

Costco Wholesale Corp., average payables payment period calculation (quarterly data)

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data
Payables turnover 11.32 11.73 9.61 11.64 11.34 11.98 9.41 13.52 11.59 12.39 9.76 11.22 11.36 12.15 10.22 11.60 11.46 12.24 10.11 11.68 11.78 12.13 10.04 11.89
Ratio (no. of days)
Average payables payment period1 32 31 38 31 32 30 39 27 31 29 37 33 32 30 36 31 32 30 36 31 31 30 36 31
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 11.32 = 32

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 declined from Q1 2018 to Q2 2018 but then slightly increased from Q2 2018 to Q3 2018.

Cash Conversion Cycle

Costco Wholesale Corp., cash conversion cycle calculation (quarterly data)

No. of days

Microsoft Excel LibreOffice Calc
May 13, 2018 Feb 18, 2018 Nov 26, 2017 Sep 3, 2017 May 7, 2017 Feb 12, 2017 Nov 20, 2016 Aug 28, 2016 May 8, 2016 Feb 14, 2016 Nov 22, 2015 Aug 30, 2015 May 10, 2015 Feb 15, 2015 Nov 23, 2014 Aug 31, 2014 May 11, 2014 Feb 16, 2014 Nov 24, 2013 Sep 1, 2013 May 12, 2013 Feb 17, 2013 Nov 25, 2012 Sep 2, 2012 May 6, 2012 Feb 12, 2012 Nov 20, 2011
Selected Financial Data
Average inventory processing period 32 33 36 32 33 33 38 32 32 32 37 32 32 31 35 31 32 32 37 31 30 31 34 30
Average receivable collection period 4 5 4 4 4 5 5 4 4 5 4 4 4 4 4 4 4 4 4 4 4 5 4 4
Average payables payment period 32 31 38 31 32 30 39 27 31 29 37 33 32 30 36 31 32 30 36 31 31 30 36 31
Ratio
Cash conversion cycle1 4 7 2 5 5 8 4 9 5 8 4 3 4 5 3 4 4 6 5 4 3 6 2 3
Source: Based on data from Costco Wholesale Corp. Quarterly and Annual Reports

Q3 2018 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 32 + 432 = 4

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 deteriorated from Q1 2018 to Q2 2018 but then improved from Q2 2018 to Q3 2018 not reaching Q1 2018 level.