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 highlight the degree to which the company can meet its financial obligations for the upcoming period. Firms that are in retail tend to have significant spreads between their current ratio and their quick ratio, because they have high inventory levels. Thus, the quick ratio is probably more important than the current ratio. The quick ratio for Costco is healthy, at 0.53. There is some concern that the trend is declining even while the current ratio is increasing, because that probably reflects inventory levels increasing. However, the inventory turnover ratio does not support that theory. However, it is good to know that Costco is a liquid company.
The activity ratios highlight how well the company is run. The receivables turnover and the inventory turnover figures are both healthy. The receivables turnover ratio is particularly healthy because it implies payment on sales in...
The strategy outlines clearly the ethical position of the organization in relation to interactions between consumers and various stakeholders. This is essential in the enhancement of service and products provisions. The organization focuses on the adherence to the law through development and implementation this marketing strategy. This enhances effectiveness and efficiency of the legal interaction between consumers, shareholders, and stakeholders. The organization also pledges to take quality care of
This means that while the business is profitable, it is in a state of constant, intense competition. Firms such as Costco must develop a competitive culture, and constantly benchmark against themselves in order to stay ahead of the myriad of different competitors. The future of this business is only good if competitive advantages and strong brand equity have been established, as is the case for Costco. For them, the industry's
Carrefour Expansion and Entry Plan into the Bangladesh MarketExecutive summaryThe increase in globalization has increased market opportunities for large companies and organizations, making them go international. Carrefour is one of these organizations that have been sought to increase their market share by venturing into the global market. This expansion plan is for the organization�s expansion and entry into the Bangladeshi retail market. PESTLE Analysis of the Bangladesh market shows that
We will use gap analysis to determine where the actual result deviates the most from the desired result, and focus on what we can do to improve those metrics. We will gather some information from the customers as to specific things that would compel them to purchase more. For example, we would ask about the price point or the quality of the wine. Ideally, there would be some identifiable
Merger, Acquisition, And International Strategies Google, Inc.: From a humble beginning in 1998 of responding to about 10,000 queries by offering search engine services, Google, Inc. has grown to a gigantic multinational corporation providing immense and widely used, actually over 30, services with a search engine capacity that responds to more than 200 million queries daily. Using a combination of personal logging information and other information gathered from its spectrum of services and
correctly identify opportunities and threats to the products of soap and laundry detergent. Specifically, three marketing environment forces will be identified that impact this type of products. These include environmental quality factors such as sewage treatment and other environmental pollution issues in the detergent manufacturing plants, allergies to chemicals or other ingredients in the products themselves and product changes dictated by various changes in washing machines. In the essay,
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now