Costco is a mass market retailer, focusing on a "warehouse club" business model. The company has a cost leadership strategy and this helps to characterize the firm's financial statements In terms of the critical ratios, the following table outlines the results for Costco for the 2012 and 2011 fiscal years:
Costco Financial Metrics
Liquidity Ratios
Formula
Current Ratio
current assets / current liabilities
Quick Ratio
(current assets - inventory) / current liabilities
Activity Ratios
Receivables turnover
Sales / Avg Accounts Receivable
Inventory turnover
COGS / Avg inventory
Debt Ratios
Debt ratio
Total liabilities / total assets
Long-Term debt to equity
Long-term debt / total equity
Profitability
Gross Margin
Gross profit / Revenue
Net Margin
Net profit / Revenue
Market ratios
P/E
Stock price / earnings
Price / Book
Price / shareholder's equity
These ratios tell the story of Costco. There are a number of aspects to this. The liquidity ratios...
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