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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