TABLE OF CONTENTS

1. General Information
2. Vertical balance analysis
3. Horizontal balance analysis
4. Golden and silver rule
5. Vertical analysis of income statement
6. Horizontal analysis of income statement
7. Comparison of current assets with revenues
8. Analysis of cash balance
9. Profitability ratios
10. Debt ratios
11. Liquidity ratios
12. Productivity ratios
13. Cash flow ratios
14. Market ratios
15. Conclusions
 1. GENERAL INFORMATION
• Costco Wholesale Corporation is an American multinational corporation which operates a chain
of membership-only big-box retail stores.

• Its worldwide headquarters are in Issaquah, Washington, an eastern suburb of Seattle.

• Costco's corporate history dates back to 1976 and opened its first warehouse in Seattle in 1983.

• 804 warehouses   558 in the United States  16 in South Korea  1 in Iceland

 103 in Canada  14 in Taiwan  1 in mainland China.

 39 in Mexico  13 in Australia

 29 in the United Kingdom  4 in Spain

•  27
Membership Data: 113.1 million in Japan
(2021)  2 in France

• Number of employees: 288,000 (2021)

• Revenues: 163,932,031 EUR (2021)
• Competitors: Walmart, Target, Kroger, and Amazon
 2. VERTICAL BALANCE LIABILITIES 2021 2020 2019

ANALYSIS Total Current Liabilities 49.67% 44.72% 51.18%

Accounts Payable 27.47% 25.51% 25.72%
Accrued Expenses 10.09% 9.41% 9.59%
Current Port. of LT Debt/Capital Leases 1.47% 0.23% 3.80%
ASSETS 2021 2020 2019
Other Current liabilities, Total 10.64% 9.57% 12.06%
Total Current Assets 49.78% 50.62% 51.73%
Total Non-Current Liabilities 20.69% 22.37% 15.24%
Cash and Short Term Investments 20.54% 23.95% 20.80%
Total Long Term Debt 12.94% 14.71% 12.16%
Total Receivables, Net 3.04% 2.79% 3.38%
Deferred Income Tax 1.27% 1.20% 1.20%
Total Inventory 23.98% 22.04% 25.10%
Minority Interest 0.87% 0.76% 0.75%
Other Current Assets, Total 2.21% 1.84% 2.45%
Other Liabilities, Total 5.61% 5.71% 1.14%
Total Fixed Assets 50.22% 49.38% 48.27%
Total Liabilities 70.37% 67.09% 66.43%
Property/Plant/Equipment, Total - Net 46.20% 45.34% 46.01%
Common Stock, Total 0.01% 0.01% 0.01%
Goodwill, Net 1.68% 1.78% -
Additional Paid-In Capital 11.86% 12.06% 14.13%
Intangibles, Net 0.50% 0.51% - Retained Earnings (Accumulated
Other Long Term Assets, Total 1.84% 1.76% 2.26% Deficit) 19.68% 23.18% 22.59%
Total Assets 100.00% 100.00% 100.00% Other Equity, Total -1.92% -2.33% -3.16%
Total Equity 29.63% 32.91% 33.57%
Total Liabilities & Shareholders'
Equity 100.00% 100.00% 100.00%
 2. VERTICAL BALANCE ANALYSIS
Total Assets Total Liabilities and Equity
100.00% 100.00%

90.00% 90.00%
29.63%
32.91% 33.57%
80.00% 80.00%
50.22% 49.38% 48.27%

70.00% 70.00%

60.00% 60.00% 20.69% 15.24%

22.37%

50.00% 50.00%

40.00% 40.00%

30.00% 30.00%
49.78% 50.62% 51.73% 49.67% 51.18%
44.72%
20.00% 20.00%

10.00% 10.00%

0.00% 0.00%
2021 2020 2019 2021 2020 2019

Total Current Assets Total Fixed Assets Total Current Liabilities Total Non-Current Liabilities Total Equity
 3. HORIZONTAL BALANCE
LIABILITIES 2021/2020 2020/2019
ANALYSIS Total Current Liabilities 119.61% 98.71%
Accounts Payable 115.93% 112.03%
ASSETS 2021/2020 2020/2019 Accrued Expenses 115.49% 110.82%

Total Current Assets 105.90% 110.54% Current Port. of LT Debt/Capital Leases 697.72% 6.74%
Other Current liabilities, Total 119.76% 89.62%
Cash and Short Term Investments 92.36% 130.06%
Total Non-Current Liabilities 99.59% 165.80%
Total Receivables, Net 117.41% 93.22% Total Long Term Debt 94.77% 136.68%
Total Inventory 117.20% 99.18% Deferred Income Tax 114.44% 113.06%
Other Current Assets, Total 129.45% 85.01% Minority Interest 123.23% 113.98%
Other Liabilities, Total 105.77% 566.25%
Total Fixed Assets 109.49% 115.58%
Total Liabilities 112.94% 114.10%
Property/Plant/Equipment, Total - Net 109.73% 111.31%
Common Stock, Total 100.95% 92.31%
Goodwill, Net 101.75% -
Additional Paid-In Capital 105.95% 96.36%
Intangibles, Net 104.86% - Retained Earnings (Accumulated Deficit) 91.43% 115.91%
Other Long Term Assets, Total 112.60% 88.09% Other Equity, Total 88.48% 83.38%
Total Equity 96.96% 110.74%
Total Assets 107.68% 112.97%
Total Liabilities & Shareholders' Equity 107.68% 112.97%
120.00%
3. DYNAMICS OF HORIZONTAL ANALYSIS
115.00% 114.10%
112.97% 112.94%

110.74%
110.00%
107.68%

105.00%

100.00%

96.96%

95.00%

90.00%

85.00%
Total Assets Total Liabilities Total Equity

2021/2020 2020/2019
 4. GOLDEN AND SILVER RULE
1.000
0.940 0.929
0.900

0.815
0.800

0.696
0.700 0.666

0.600
0.590

0.500

0.400

0.300

0.200

0.100

0.000
2021 2020 2019

Golden Rule Silver Rule

120.00%
5. VERTICAL ANALYSIS OF INCOME STATEMENT

100.00%
0.00% 0.02% 0.00%
160,000,000

142,809,767
140,000,000
80.00% 130,154,840

120,000,000
117,332,890

100,000,000
60.00%

87.12% 86.85% 87.02%

80,000,000

40.00% 60,000,000

40,000,000

20.00% 15,008,563 14,191,749

20,000,000 13,315,022

27,859
9.16% 9.47% 9.88% - - -
2021 2020 2019
0.00% Selling/General/Admin. Expenses, Total Cost of Revenue, Total Depreciation/Amortization
2021 2020 2019

Selling/General/Admin. Expenses, Total Cost of Revenue, Total

Depreciation/Amortization
 6. HORIZONTAL ANALYSIS OF INCOME
112.00%
STATEMENT
110.93%
111.00% 110.97%

110.00%
109.72%

109.20%
109.00%

108.00%

107.00%
106.58%

106.00%
105.76%

105.00%

104.00%

103.00%
2021/2020 2020/2019

Selling/General/Admin. Expenses, Total Cost of Revenue, Total Total Operating Expense

 7. COMPARISON OF CURRENT ASSETS WITH REVENUES
112.00%

111.15%
111.00%

110.54%
110.00%
109.39%

109.00%

108.00%

107.00%

106.00%
105.90%

105.00%

104.00%

103.00%
2021/2020 2020/2019

Total Current Assets Total Revenues

10,000,000
8. ANALYSIS OF CASH BALANCE
7,963,088
8,000,000 7,495,078

6,000,000 5,612,087

4,000,000 3,498,511

2,056,412
2,000,000

-
2021 2020 2019

-852,588 -1,030,771 -1,012,754

-2,000,000

-2,529,678
-2,957,703
-4,000,000 -3,496,713

-6,000,000 -5,428,451

-8,000,000

Cash from Operating Activities Cash from Investing Activities Cash from Financing Activities Net Change in Cash
 9.PROFITABILITY RATIOS
30.00%
28.13%

25.00%
23.41% 23.29%

20.00%

15.00%

10.00%
8.34% 7.82%
7.71%

5.00%
3.42% 3.26% 3.10%

0.00%
2021 2020 2019

ROA ROE ROS

 10. DEBT RATIOS
0.710
0.704 2.500 2.374
0.700 2.039 1.978
2.000
0.690

0.680 1.500
0.671
0.670
0.664 1.000

0.660
0.500
0.650

0.640 0.000
2021 2020 2019 2021 2020 2019

Debt / Equity Ratio

Debt Ratio

45.000
39.228 0.500
40.000 0.447
0.450 0.437
35.000 33.969
31.580 0.400
0.362
30.000 0.350
25.000 0.300

20.000 0.250
0.200
15.000
0.150
10.000
0.100
5.000 0.050
0.000 0.000
2021 2020 2019 2021 2020 2019

Interest Coverage Ratio Long-term debt to equity ratio

 11. LIQUIDITY RATIOS
0.700
0.639 1.150
1.132
0.600
0.519 0.520
1.100
0.500

0.400 1.050

0.300 1.011
1.002
1.000
0.200

0.950
0.100

0.000 0.900
2021 2020 2019 2021 2020 2019

Quick ratio Current ratio

0.600
0.536 3,000,000
2,752,233
0.500
2,500,000
0.414 0.406
0.400
2,000,000

0.300
1,500,000

0.200 1,000,000

0.100 500,000
225,680
54,270
0.000 -
2021 2020 2019 2021 2020 2019

Cash assets ratio Working capital

 12. PRODUCTIVITY RATIOS
3.270 30.000
3.262 3.264
3.260
28.970
29.000
3.250

3.240 28.000 27.789

3.230
27.000
3.220
3.211 25.893
3.210 26.000

3.200
25.000
3.190

3.180 24.000
2021 2020 2019 2021 2020 2019

Total Assets Turnover Inventory Turnover

58.000 4.000
57.244

56.000 55.585 3.800 3.781

54.000 3.600

3.404
52.000 3.400
50.835

50.000 3.200 3.172

48.000 3.000

46.000 2.800
2021 2020 2019 2021 2020 2019

Liabilities Turnover Receivables Turnover

0.060
13. CASH FLOW RATIOS
0.450
0.053
0.400 0.382
0.050
0.046 0.350
0.042 0.300
0.040 0.300
0.265
0.250
0.030 0.200

0.150
0.020
0.100

0.010 0.050

0.000
2021 2020 2019
0.000
2021 2020 2019
Short-term debt coverage
Operating Cash Flow / Sales Revenue Ratio
3.500
3.153 7.000

3.000 5.991 6.123

6.000
2.497
2.500
5.000
2.120
2.000
4.000

1.500
3.000

1.000
2.000 1.558
0.500
1.000

0.000
2021 2020 2019 0.000
2021 2020 2019
Capital Expenditure Coverage
Dividend Coverage
 14. MARKET RATIOS
41.00

40.00
39.97

39.00

38.00
37.65

37.00

35.98
36.00

35.00

34.00

33.00
2021 2020 2019

Price-to-Earnings (P/E) Ratio

 16. CONCLUSIONS (1/3)
 In general we can say that COSTCO Wholesale Corp. has a positive corporate condition for all three years,
certainly the year 2020 in some ways was more prosperous, followed by 2019 and then 2021 which was not a bad
year for the company but still there was place to improve.

 The success of Costco Wholesale , which has been evident during the pandemic, is based on a membership
model, low prices, quality goods, limited selection, a treasure-hunt environment, and motivated employees.

 The COVID-19 pandemic led to Costco Wholesale Corp.’s biggest annual growth in profit and sales since the
1990s. Costco “has so often showed that it can be a winner in different environments (during the financial crisis,
during a pro-consumer discretionary period, during a pandemic.

 Costco applies the low-price strategy, which has helped the company strengthen its position as a retail giant in the
industry. The company focuses on stocking high-quality products and selling them in bulk at low prices.

 Costco is known for allotting no budgets to advertising. Compared to Walmart’s and Target’s advertising budget
in billion, this shows that the company saves billions and redirects its profit into internal operations
 16. CONCLUSIONS (2/3)
 Based on the analysis of debt ratios, we conclude that Costco has increased its level od debt from 2019 to 2021.
There is more liabilities than equity in the balance sheet, which reflects also in debt/equity ratio especially during
2021. The higher IC ratio is more favorable because it shows how many times a company can pay the interest with
its before-tax income, and Costco can afford to pay additional interest expenses. In this case, Costco is less risky
and the bank won't have any problem accepting its loan.

 Based on the analysis of liquidity ratios, the financial weaknesses are found at the Costco’s current ratio which
even though it was higher than 1 and that means that the company has enough resources to meet its short-term
obligations, but the values are very close to 1 which isn’t very stable. Also, the quick ratio is also a financial
weaknesses because it is less than 1 for all three years, which shows that it has no liquid assets to pay its current
liabilities and should be treated with caution.

 In fine, based on the analysis of productivity ratios, the financial strengths are found at the Costco’s receivables
turnover ratio, inventory turnover ratio, and asset turnover ratio.
 16. CONCLUSIONS (3/3)
From the point of view of profitability we can certainly say that it is not a very positive situation, because ROE>ROA>ROS in 2019,
2020, and 2021, which means that the company has high debts and is quite depended in it. The company takes on financial leverage
because its ROE is higher than its ROA in all 3 years. By taking on debt, Costco increases its assets thanks to the cash that comes in.

----

To conclude the financial analysis of COSTCO Wholesale Corporation:

• More than 70% of revenues come from the United States operations, while 14% of revenues comes from Canadian Operations and the
other part comes from other international operations.

• Costco needs to further expand its market because the market value of Costco is found significantly lower than that of his other
competitors, such as Walmart.

• he financial condition of Costco Wholesale Corporation in 2021 is about the same as the financial condition typical of the companies
engaged in the same activity.

• The average ratios for this industry are slightly better than the averages for all industries. For that reason, in comparison with all
businesses, the Costco has a higher result.

• The financial position of Costco Wholesale Corporation is better than that of most listed companies that submit financial statements to
the U.S. Securities and Exchange Commission.
 THANK YOU
FOR YOUR ATTENTION!