A.) Using the information for Costco, complete the table below (using 4 decimals). Use net income, including non-controlling interests and use total equity for stockholder's
A.) Using the information for Costco, complete the table below (using 4 decimals). Use net income, including non-controlling interests and use total equity for stockholder's equity.
-Net profit margin for 2017 and 2018 and %change
-Total Asset Turnover for 2017, 2018 and %change
-Equity Mulitplier for 2017, 2018 and %change
-Return on Stockholder's Equity for 2017, 2018 and %change
Use your ratios, and their respective changes, to explain the change in Costco's ROE over the two-year period. Discuss the impact that each ratio had on the return on stockholder's equity. Which ratio impacted the ROE change the most? You don't need to explain why they changed. Only explain how they impacted ROE.
B.) Use these ratios below and their percentage changes to identify the major cause of the change in Costco's net profit margin.
NPM=EAT/EBT*EBT/EBIT*EBIT/Sales
COSTCO WHOLESALE CORPORATION CONSOLIDATED BALANCE SHEETS (amounts in millions, except par value and share data] September 2, September 3, 2018 2017 ASSETS CURRENT ASSETS Cash and cash equivalents 4,546 Short-term investments 1 204 1,203 Receivables, net 1 869 1.432 Merchandise Inventories 11.040 9.834 Other cument assets 321 272 Total current assets 20 .389 17 317 PROPERTY AND EQUIPMENT Land 6.193 5,690 Buildings and improvements 16.107 15.127 Equipment and fixtures 7 274 6.681 Construction in progress 1.140 843 30 714 28,341 Less accumulated depreciation and amortization (10,180) Net property and equipment 19 681 18,161 OTHER ASSETS 860 869 TOTAL ASSETS 40 830 96,347 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable 11 237 9.608 Accrued salaries and benefits 2.994 2.703 Accrued member rewards 1 057 961 Deferred membership fees 1.624 1,498 Other cument liable's 3014 2,725 Total current liabilities 19 926 17,496 LONG-TERM DEBT, excluding current portion 6,487 6.573 OTHER LIABILITIES 1 314 1,200 Total labilities 27 727 26,268 COMMITMENTS AND CONTINGENCIES EQUITY Preferred stock $0.01 parvalue; 100,000,000 shares authorized; no shares issued and outstanding 0 Common stock $0 01 parvalue, 900,000,000 shares authorized; 438,189,000 and 437,204000 shares issued and outstanding Additional paid-in capital 6.107 5,800 Accumulated other comprehensive loss (1.199) (1,014) Retained earnings 7867 5.968 Total Costed stockholders equity 12.799 10,778 Noncontrolling interests 304 301 Total equity 13.103 11,079 TOTAL LIABILITIES AND EQUITY 36 347COSTCO WHOLESALE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (amounts in millions, except per share data) 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended September 2, 2018 September 3, August 28, 2017 2016 Net sales 138,434 126,172 115,073 Membership fees 3,142 2,853 2,646 Total revenue 141,576 120,025 118.719 OPERATING EXPENSES Merchandise costs 123,153 111,982 102,901 Belling, general and administrative 13,876 12,950 12,058 Proopening agonies BB 78 Operating income 4,480 4,101 3.672 OTHER INCOME (EXPENSE) Interest expense (1590 (1349 (1 33) Interest income and other not 121 62 80 HCOME BEFORE INCOME TAXES 4.442 4,039 3.619 Provision for income tame's 1,263 1,325 1,243 Net income including noncontrolling interests 3,179 2.714 2,376 Net income attributable to noncontrolling Interests (45) (35) (26) ET INCOME ATTRIBUTABLE TO COSTCO 3.134 2.879 7.350 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic J.15 5.11 5.36 Diluted 7.09 6 08 5.33 Shares used in calculation (00D's; Basic 438,515 438,437 438,585 Diused 441,834 440,537 441,283 CASH DIVIDENDS DECLARED PER COMMON SHARE 214 101.90 1,70
