Calculate the gross profit margin ratio for costco

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Reference no: EM132043060

Using the financial ratios provided in the Appendix and the financial statement information for Costco Wholesale Corporation, Inc., below, calculate the following ratios for Costco for both 2013 and 2014.

1. Gross profit margin

2. Operating profit margin

3. Net profit margin

4. Times interest earned coverage

5. Page 85 Return on shareholders' equity

6. Return on assets

7. Debt-to-equity ratio

8. Days of inventory

9. Inventory turnover ratio

10. Average collection period

Based on these ratios, did Costco's financial performance improve, weaken, or remain about the same from 2013 to 2014?

Consolidated Statements of Income for Costco Wholesale Corporation, Inc., 2013-2014 (in millions, except per share data)

	2014	2013
Net sales	$110,212	$102,870
Membership fees	2,428	2,286
Total revenue	112,640	105,156
Operating Expenses
Merchandise costs	98,458	91,948
Selling, general and administrative	10,899	10,104
Operating income	3,220	3,053
Other Income (Expense)
Interest expense	(113)	(99)
Interest income and other, net	90	97
Income before income taxes	3,197	3,051
Provision for income taxes	1,109	990
Net income including noncontrolling interests	2,088	2,061
Net income attributable to noncontrolling interests	(30)	(22)
Net income	$2,058	$2,039
Basic earnings per share	$ 4.69	$ 4.68
Diluted earnings per share	$ 4.65	$ 4.63

Consolidated Balance Sheets for Costco Wholesale Corporation, 2013-2014 (in millions, except per share data)

ASSETS	AUGUST 31, 2014	SEPTEMBER 1, 2014
Current Assets
Cash and cash equivalents	$ 5,738	$ 4,644
Short-term investments	1,577	1,480
Receivables, net	1,148	1,201
Merchandise inventories	8,456	7,894
Deferred income taxes and other current assets	669	621
Total current assets	17,588	15,7840
Property and Equipment
Land	4,716	4,409
Buildings and improvements	12,522	11,556
Equipment and fixtures	4,845	4,472
Construction in progress	592	585
Less accumulated depreciation and amortization	(7,845)	(7,141)
Net property and equipment	14,830	13,881
Other assets	606	562
Total assets	$ 33,024	$ 30,283
Liabilities and Equity
Current Liabilities
Accounts payable	$8,491	$7,872
Accrued salaries and benefits	2,231	2,037
Accrued member rewards	773	710
Accrued sales and other taxes	442	382
Deferred membership fees	1,254	1,167
Other current liabilities	1,221	1,089
Total current liabilities	14,412	13,257
Long-term debt	5,093	4,998
Deferred income taxes and other liabilities	1,004	1,016
Total liabilities	20,509	19,271
Equity
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock $.005 par value; 900,000,000 shares authorized; 437,683,000 and 436,839,000 shares issued and outstanding	2	2
Additional paid-in capital	4,919	4,670
Accumulated other comprehensive loss	(76)	(122)
Retained earnings	7,458	6,283
Total Costco stockholders' equity	12,303	10,833
Noncontrolling interests	212	179
Total equity	12,515	11,012
Total liabilities and equity	$ 33,024	$30,283

Source: Costco Wholesale Corporation, 2014 10-K.

Reference no: EM132043060

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