Costco Competitive Analysis
|Costco |
|ESC-Accounting and Finance |
| |
|This case analysis will analyze the efficiency and health of the organization. This |
|case analysis was created using the textbook and the Stanford Graduate School of |
|Business. Costco Wholesale Corporation Financial Statement Analysis (A) Case A-186A.|
|19 June 2003. |
| |
|
I. Executive Summary
• Market expansion efforts have allowed Costco to add to its number of store locations. A continual focus on keeping costs low control have allowed Costco to offer products at prices that continue to attract customers despite rising membership fees over the years.
• Costco financial results overall are positive with favorable trends noted by their revenue and membership fees, decreases in operating expenses, market expansion efforts, increase in EBIT, increase in retained earnings and interest income, decrease in inventory on hand, decrease noted in long term debt, favorable current ratio, competitive average receivables at 3 days coupled with competitive payables period of 33 days.
• Costco remains an attractive investment option for Margarita Torres based on strong fundamentals and a continued focus on expense control. Initial concerns may exist regarding the amount of time it may take for the investment in newer stores to add positive financial results, but Costco has proven that their past market expansion efforts have been successful. As long as the company continues to do so in the same fashion as previously, all indications are that Costco will continue to add to its net sales/membership fees, maintain a
|ESC-Accounting and Finance |
| |
|This case analysis will analyze the efficiency and health of the organization. This |
|case analysis was created using the textbook and the Stanford Graduate School of |
|Business. Costco Wholesale Corporation Financial Statement Analysis (A) Case A-186A.|
|19 June 2003. |
| |
|
I. Executive Summary
• Market expansion efforts have allowed Costco to add to its number of store locations. A continual focus on keeping costs low control have allowed Costco to offer products at prices that continue to attract customers despite rising membership fees over the years.
• Costco financial results overall are positive with favorable trends noted by their revenue and membership fees, decreases in operating expenses, market expansion efforts, increase in EBIT, increase in retained earnings and interest income, decrease in inventory on hand, decrease noted in long term debt, favorable current ratio, competitive average receivables at 3 days coupled with competitive payables period of 33 days.
• Costco remains an attractive investment option for Margarita Torres based on strong fundamentals and a continued focus on expense control. Initial concerns may exist regarding the amount of time it may take for the investment in newer stores to add positive financial results, but Costco has proven that their past market expansion efforts have been successful. As long as the company continues to do so in the same fashion as previously, all indications are that Costco will continue to add to its net sales/membership fees, maintain a
Cited: Boyle, M. (2006, October 25). Why Costco is so addictive, CNNMoney, http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391725/index.htm Brigham, E Chambers, E. (2004, August 18). Costco: Coffins in aisle 9. Bloomberg Businessweek, http://www.businessweek.com/bwdaily/dnflash/aug2004/nf20040818_7779_db016.htm CNN Money HHC Publishing. (2010). Selling a warehouse club:costco. http://www.hhcpublishing.com/warehouse_club_industry/2010_selling_costco_history.pdf Miller, M Opsitnik, L. (2011 , November 8). Gm selling trucks, suvs at costco. US News, http://usnews.rankingsandreviews.com/cars-trucks/best-cars-blog/2011/11/GM_Selling_Trucks_SUVs_at_Costco/ Samsclub.com