costco company analysis

Costco Wholesale Corporation is the U.S. public corporation that I chose to do my Accounting 2 project on.

It is a Sunday afternoon, and your parents announce to you and your siblings that they are going shopping at Costco. You waste no time sprinting to get your shoes on and getting in the car. When you arrive at Costco you hurry out of the car and bound into the store straight to the food aisle where you see samples upon samples upon samples. You love trying all of the different foods that they have to offer. Costco is one of the companies that I know something about. However before I picked it as my stock, I needed to use Peter Lynch’s blended approach to help me validate that Costco had the right financials for me to their purchase stock.

The retail industry is one of the largest industries in the world, by business numbers and employees. Plunkett Research Ltd. As of 2011 Wal-Mart was still the giant of the retail market. As Wal-Mart nearest competitor Target heats up the market, Target seems to be gaining in customer loyalty and has picked up on Wal-Marts grocery strategy. According to the Plunkett report, recession ravaged consumers not only want dry goods at a discount, but they also want groceries discounted (PlunkettResearch.Com, 2012). Target also has been gaining customers who want stylish well organized stores that appeal to their senses.

Costco is the greatest wholesale mega store in today’s market opening its first store in 1983 in Seattle, Washington. Its mission statement is "Costco 's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: Obey the law, Take care of our members, Take care of our employees, and Respect our vendors. If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders."

Matured Customer Base, COST’s customer base is affluent and royal, but advancing in age. While Costco has a broad customer base, its customer base tends to be the more affluent baby boomers’ generation. Although the Baby Boomers generation make up most the affluent customer base, as these customers age, they will spend less. COST must try and attract younger customers, who are savvier e-commerce shoppers, which relates to the Website emphasis discussed above, but also hold the keys to the next generation of affluent

As the manager of an individual Costco store, I need different kinds of information than an outside investor who is considering lending money to the company or investing in common stock. I need information that can help me make a sound decision to either add or discontinue certain products (Freedman, 2016). I will also use activity based costing techniques to help determine to whom to sell products, so advertising to the targeted consumers will be cost effective. Controlling the cost is a very important part of my job (Callen, 1991). The information that I need affects the costs of day to day operations unlike the investors who only need an annual report to make an investment decision (Edmonds, Olds, & Tsay, 2008). Cost can be controlled by measuring the ex post performance within the department or in comparison to other departments in the same industry (Callen,

turnover, made possible by low prices and limited product selection among a widevariety of branded and private label products. This business model is appropriate for this chain and has many benefits. For one, by gearing the business approach to rapidlyturning over inventory, the company is often able to sell new merchandise and paysuppliers before the invoice is due, even when the company pays early to benefit fromearly payment discounts. This frees up capital, as Costco finances most new inventorypurchases with supplier payment terms. Fittingly, the company passes these

With 360 warehouses, located in the United States, Canada, Mexico, Japan, Taiwan, Korea, and the United Kingdom, Costco Wholesale Corporation is the largest and most profitable chain of its kind.

In terms of industry profitability, it appears that profit margins have a tendency to fall. This is because competition is high and customers tend to buy low-priced high-value items. The average gross margin and net profit margin is 37.1% and 14.3%, respectively (MSN Money, 2010).

Loblaw Companies Limited is the leader of Canada’s food and pharmacy, their independently-operated stores, food and household products as well as pharmacies can be found in every Canadian’s neighborhoods.

In the United States of America "fortune" magazine published 2011 Annual Global Fortune 500 rankings, WAL-MART, In the global top 500 enterprises once again won the top，with the business income is 421849 dollar, annual profit of 16389 million dollar. Also worth noting is, in March ten before the other enterprises in the vast majority of oil or electric power resource monopoly enterprises. Then, as a major in retail industry, WAL-MART 's tremendous achievements stunning!

The Net Profit Margin in 2012 was 10.5% while in 2013 it was 66.6%. This increase in the Net Profit Margin can be attributed to the increase in net profits after taxes despite the fact that there was a slight decrease in revenues.

Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor

The company that I am writing about is Starbucks, the international coffee shop chain. The company's financial statements for this analysis are from the FY2011 Annual Report and 10-K. The company has 10787 stores in the United States, of which 38% are franchised and the remainder are company-owned. The franchise model is more common when the company operates internationally. There are 6216 Starbucks stores internationally and of these 63% are franchises, with just 37% company-owned. The franchise model for international expansion has been utilized to help Starbucks expand quickly in foreign countries and to mitigate foreign political risk and to ensure that the product/service offering is tailored to local tastes (Thompson, 2012). The company is now in the process of buying back some overseas franchise stores in order to retain more profits for itself (Franchise Press, 2011). This paper will take a look at the company's most recent annual report to analyze the financial statements.

On 2/16/10 Burger King, the second largest U.S. hamburger chain after McDonald 's, said it would serve Starbuck’s “Seattle 's Best” coffee in about 7,250 U.S. outlets by September making it a direct challenge to McDonald’s strong sales of its new coffee items. On the other hand, TheStreet.com Ratings Investment Analyst Jake Lynch recently reported McDonald’s to be a top dividend-paying stock to buy because its fourth-quarter net income increased 23% to $1.2 billion, revenue jumped 7.3% to $6 billion, and its stock has increased 15% in the past year.