CASE: A-186B DATE: 06/19/03 COSTCO WHOLESALE CORPORATION FINANCIAL STATEMENT ANALYSIS (B

1. Review Torres' assumptions in Exhibit 2. Which assumptions would represent a change from Costco's historical performance? Do you feel her assumptions are appropriate, and if not, which ones would you change?

Costco Wholesale Corp.: Financial Statement Analysis (B) A-186B D. 8 Exhibit 2 Margarita Torres: Assumptions Underlying Costco Forecast (2001 - 2010) Assumptions 2001200220032004200520062007200820092010 Merchandise Sales U.S. store openings during year 27282828283030303030 Number of US stores, yr-end count 2642923203483 76406436466496526 Intl. store openings (excluding Mexico) 73666612121212 Number of intl. stores, yr-end count $1849096102108120132144156 Totalstores, consolidated 3453 76410444478514556598640682 Number of Mexico stores, equity- 20202020202020202020 Annualincrease in store sales 9%29%29%2%2%2%29%2%2% Sales per store ($mm, yr-end count) 99101 1031051071091 11114116118 Membership Revenue Members per store (th.) 50505050505050505050 Totalmembers (th) 17,09518 80020.500 22,200 23,20025 70027 80022 9003 2 09034-100 Revenue booked permember per year 39393940404041414141 Operating Ratios Cost of goods sold as a percent of sales 89.63%89.559689.509%89,50%89,50% SG&A asa percent of sales 9.179%9. 9%8.97%8.879%8.77%8.679%8.60968.60968.60968.86209689.509689.50%89.50%89.50 Pre-opening expense per new store $mm) 1.51.51.51.51.51.51.51.51.51.5 Interest expense ($mm) (32)(32)(32)(32)(32)(32)(32)(32)(32)(32)