The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as a company's Total Current Assets excludes Total Inventories divides by its Total Current Liabilities. Costco Wholesale's quick ratio for the quarter that ended in Feb. 2024 was 0.43.
Costco Wholesale has a quick ratio of 0.43. It indicates that the company cannot currently fully pay back its current liabilities.
The historical rank and industry rank for Costco Wholesale's Quick Ratio or its related term are showing as below:
COST'
s Quick Ratio Range Over the Past 10 Years
Min: 0.35 Med: 0.48 Max: 0.64
Current: 0.43
During the past 13 years, Costco Wholesale's highest Quick Ratio was 0.64. The lowest was 0.35. And the median was 0.48.
COST's Quick Ratio is ranked worse than 80.63% of 315
companies
in the Retail - Defensive industry
Industry Median: 0.89
vs COST: 0.43
Costco Wholesale Quick Ratio Historical Data
The historical data trend for Costco Wholesale's Quick Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
Costco Wholesale Annual Data
Trend
Aug14
Aug15
Aug16
Aug17
Aug18
Aug19
Aug20
Aug21
Aug22
Aug23
Quick Ratio
0.52
0.64
0.52
0.46
0.57
Costco Wholesale Quarterly Data
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
May23
Aug23
Nov23
Feb24
Quick Ratio
0.56
0.57
0.57
0.60
0.43
Competitive Comparison
For the Discount Stores subindustry, Costco Wholesale's Quick Ratio, along with its competitors' market caps and Quick Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Costco Wholesale Quick Ratio Distribution
For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Costco Wholesale's Quick Ratio falls into.
Costco Wholesale Quick Ratio Calculation
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets.
Costco Wholesale's Quick Ratio for the fiscal year that ended in Aug. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Costco Wholesale (NAS:COST) Quick Ratio Explanation
The quick ratio is more conservative than the Current Ratio because it excludes inventories from current assets. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash.
In general, low or decreasing quick ratios generally suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. On the other hand, a high or increasing quick ratio generally indicates that a company is experiencing solid top-line growth, quickly converting receivables into cash, and easily able to cover its financial obligations. Such companies often have faster inventory turnover and cash conversion cycles.
The higher the quick ratio, the better the company's liquidity position.
Costco Wholesale Quick Ratio Related Terms
Thank you for viewing the detailed overview of Costco Wholesale's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Costco operates a membership-based, no-frills retail model, predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given Costco's frugal cost structure, the firm is able to price its merchandise below competing retailers, driving high sales volume per warehouse and allowing the retailer to generate strong profits on thin margins. Costco operates nearly 600 warehouses in the United States and boasts over 60% market share in the domestic warehouse club industry. Internationally, Costco operates another 270 warehouses, primarily in markets such as Canada, Mexico, Japan, and the U.K.
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