Find online the annual 10-K report for Costco Wholesale Corporation (COST) for fiscal year 2015 (filed in October 2015). a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. b. Verify the DuPont Identity for Costco's ROE. c. If Costco's managers wanted to increase its ROE by 1.6 percentage point, how much higher would their asset turnover need to be? ment $ 25,517 Consolidated Statements Of Income - 3 Months Ended 4 Months Ended 12 Months Ended USD ($) shares in Thousands, $ in Millions May 10, 2015 Feb. 15, 2015 Nov. 23, 2014 May. 11, 2014 Feb. 16, 2014 Nov. 24, 2013 Aug. 30, 2015 Aug. 31, 2014 Aug. 30, 2015 Aug. 31, 2014 Sep. 01, 2013 REVENUE Net sales S 26,872 $ 26,284 $ 25,233 $ 25,756 S 24,468 $ 34,993 $ 34,755 S 113,666 $ 110,212 $ 102,870 Membership fees 584 582 582 561 550 549 785 768 2,533 2,428 2.286 a revenue 26,101 27.454 26,866 25,794 26,306 25,017 35,778 35,523 116,199 112,640 105,156 OPERATING EXPENSES Merchandise costs 22,687 23,897 23,385 22,554 23,043 21,824 31,096 31.037 101,065 98,458 91.948 Selling, general and administrative 2,579 2,671 2,696 2,487 2.531 2,501 3,499 3.380 11,445 10,899 10,104 Preopening expenses 14 9 15 16 8 24 27 15 65 63 51 Operating income 821 877 770 737 724 668 1,156 1.091 3,624 3,220 3,053 OTHER INCOME (EXPENSE) Interest expense (31) marco (27) (26) (25) (26) (27) (40) (35) (124) (113) (99) Interest income and ather, net 9 20 35 12 30 18 40 30 104 90 97 INCOME BEFORE INCOME TAXES 799 870 779 724 728 659 1.156 1,086 3,604 3,197 3,051 Provision for income taxes 280 263 (1) 274 245 255 228 378 381 1,195 1,109 990 Net income including noncontrolling interests 519 607 505 479 473 431 778 705 2,409 2,088 2,061 Net income attributable to noncontrolling interests (3) (9) (9) (6) (10) (6) (11) (8) (32) (30) (22) NET INCOME ATTRIBUTABLE TO COSTCO $ 516 $ 598 $ 496 $ 473 $ 463 $ 425 $ 767 $ 697 $ 2,377 $ 2,058 $ 2.039 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic (in dollars per share) $ 1.17 $ 1.36 S 1.13 $ 1.08 $ 1.05 $ 0.97 $ 1.75 $ 1.59 $ 5.41 $ 4.69 $ 4.68 Diluted (in dollars per share) $ 1.17 $ 1.35 S 1.12 $ 1.07 $ 1.05 $ 0.96 $ 1.73 $ 1.58 $ 5.37 $ 4.65 $ 4.63 Shares used in calculation (000's) Basic (shares) 440,070 440.384 438,760 439,446 439,776 437,970 438.835 437.875 439,455 438.693 435.741 Diluted (shares) 443,132 442,896 442,210 442,720 442,829 442,420 442,404 441.887 442,716 442,485 440,512 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.40 $ 5.355 21 S 0.355 $ 0.355 $ 0.31 $ 0.31 $ 0.40 $ 0.355 $ 6.51 $ 1.33 $ 8.17 [1] Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. [2] Includes the special cash dividend of $5.00 per share paid in February 2015
