Costco Wholesale Corp., FCFF calculation

US$ in millions

12 months ended:	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019	Sep 2, 2018
Net income attributable to Costco	6,292)	5,844)	5,007)	4,002)	3,659)	3,134)
Net income attributable to noncontrolling interests	—)	71)	72)	57)	45)	45)
Net noncash charges	3,758)	3,040)	2,876)	2,604)	2,243)	1,926)
Changes in operating assets and liabilities	1,018)	(1,563)	1,003)	2,198)	409)	669)
Net cash provided by operating activities	11,068)	7,392)	8,958)	8,861)	6,356)	5,774)
Cash paid during the year for interest, net of tax¹	93)	109)	113)	94)	106)	103)
Additions to property and equipment	(4,323)	(3,891)	(3,588)	(2,810)	(2,998)	(2,969)
Financing lease assets obtained in exchange for new or modified leases	(100)	(794)	(399)	(317)	—)	—)
Free cash flow to the firm (FCFF)	6,738)	2,816)	5,084)	5,828)	3,464)	2,908)

Based on: 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01), 10-K (reporting date: 2018-09-02).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Costco Wholesale Corp. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Costco Wholesale Corp. FCFF decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Costco Wholesale Corp., interest paid, net of tax calculation

US$ in millions

12 months ended:	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019	Sep 2, 2018
Effective Income Tax Rate (EITR)
EITR¹	25.90%	24.60%	24.00%	24.40%	24.90%	28.00%
Interest Paid, Net of Tax
Cash paid during the year for interest, before tax	125)	145)	149)	124)	141)	143)
Less: Cash paid during the year for interest, tax²	32)	36)	36)	30)	35)	40)
Cash paid during the year for interest, net of tax	93)	109)	113)	94)	106)	103)

Based on: 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01), 10-K (reporting date: 2018-09-02).

¹ See details »

² 2023 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 125 × 25.90% = 32

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Costco Wholesale Corp., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	316,050)
Free cash flow to the firm (FCFF)	6,738)
Valuation Ratio
EV/FCFF	46.91
Benchmarks
EV/FCFF, Competitors¹
Target Corp.	20.98
Walmart Inc.	30.63
EV/FCFF, Sector
Consumer Staples Distribution & Retail	49.35
EV/FCFF, Industry
Consumer Staples	31.54

Based on: 10-K (reporting date: 2023-09-03).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Costco Wholesale Corp., historical EV/FCFF calculation, comparison to benchmarks

	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019	Sep 2, 2018
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	243,035)	209,733)	195,411)	155,588)	128,983)	95,632)
Free cash flow to the firm (FCFF)²	6,738)	2,816)	5,084)	5,828)	3,464)	2,908)
Valuation Ratio
EV/FCFF³	36.07	74.47	38.43	26.70	37.24	32.89
Benchmarks
EV/FCFF, Competitors⁴
Target Corp.	—	20.94	11.33	14.93	17.80	—
Walmart Inc.	30.99	33.26	14.86	22.39	17.27	—
EV/FCFF, Sector
Consumer Staples Distribution & Retail	39.69	35.73	17.09	22.18	19.99	—
EV/FCFF, Industry
Consumer Staples	28.47	29.57	20.78	22.85	23.31	—

Based on: 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30), 10-K (reporting date: 2019-09-01), 10-K (reporting date: 2018-09-02).

¹ See details »

² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 243,035 ÷ 6,738 = 36.07

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Costco Wholesale Corp. EV/FCFF ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Costco Wholesale Corp. (NASDAQ:COST)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical