Using the Financial Statements from Costcos 2018 Annual Report compute the following ratios for 2018. You will find most of the ratio formulas in Chapter 14. You must show your work for these computations! Also, for any computations requiring Net Income, use Net Income Attributable to Costco.

1. Ratio of Liabilities to Stockholders Equity
2. Times Interest Earned
3. Profit Margin
4. Asset Turnover
5. Return on Total Assets
6. Return on Stockholders Equity
7. Earnings per Share (EPS) on Common Stock
8. Free Cash Flow (see Chapter 13)
1. Ratio of Free Cash Flow to Sales (see Chapter 13)
10. Price-Earnings (P/E) Ratio (For Market Price, use an average of high and low for last quarter of 2018 (you can find this in the annual report in the Management Discussion and Analysis Section)
11. Dividends per Share
50. Dividend Yield
1000. Would you invest in Costco? Clearly and thoroughly explain your reasoning. To support your answer, you must speak to each of the following: Liquidity; Solvency; and Profitability. You must use at least two ratios from each of the categories to support your logic. You can also use any additional factors, information, or research to justify your response. When identifying the ratios, be sure to do the following:
      1. Name each ratio.
      2. Indicate the importance of the ratio (what it is intending to measure).
      3. Explain why you chose the ratio to justify your decision.

COSTCO WHOLESALE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (amounts in millions, except per share data) 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended September 2. September 3, 2017 ust 28, REVENUE Net sales Membership fees 126,172 2,853 16,073 2,646 118,719 $ 138434 3.142 Total revenue 141.576 129.025 OPERATING EXPENSES Merchandise costs Selling, general and administrative Preopening expenses 123.152 13.876 68 4.480 111,882 12,950 102,901 12.068 Operating income 4,111 3,672 OTHER INCOME (EXPENSE) (134) 62 4,039 1,325 2 714 (133) 80 3,619 1,243 2,376 Interest expense Interest income and other, net (159) 4 442 1,263 3,179 INCOME BEFORE INCOME TAXES Provision for income taxes Net income including noncontroling interests Net income attrbutable to noncontroling 2679 $ NET INCOME ATTRIBUTABLE TO COSTCo NET INCOME PER COMMON SHARE 3,134 $ ATTRIBUTABLE TO COSTCO: 7.15 $ 6.11 6.08 $ Dluted 5.33 Shares used in calculation (000's) Basic 438.515 438.437 440,937 438.585 441,263 441,834 CASH DIVIDENDS DECLARED PER COMMON SHARE 890 S 2.14 $ 3,179 $ (192) INTERESTS 2,714 2,376 26 2,402 30 2,372 Foreign-currency translation adjustment and other, net 98 2,812 2,987 Less Comprehensive income attributable to noncontrolling interests 38 48 COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCo 2,949 $ 2,764 S The accompanying notes are an integral part of these consolidated financial statements. 37 COSTCO WHOLESALE CORPORATION CONSOLIDATED BALANCE SHEETS amounts in millions, except par value and share data) 2017 CURRENT ASSETS $ 6.055 $4,546 1,233 1,432 9,834 272 Cash and cash esuvalents 1,204 1,669 11,040 321 Receivables net Merchandse inventones Other cument assers 289 17.317 Total cument assets 6.193 6.107 7274 1,140 30,714 (11,033) 19.681 5,690 15,127 6,681 843 28,341 Lans Buildings and improvements Equipment and fintures Less accumulated depreciation and amortization 18,161 869 $ 40.830S 36.347 Net property and equipment OTHER ASSETS TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES 9.608 2,703 961 1.498 2,725 17.495 6,573 1,200 25,268 11,237 $ Accounts payable Accrued salaries and benets Accrued member rewards Deferred membership fees Other cument labilibes 2994 1,057 ,624 3.014 19.926 6,487 1,314 27,727 Total current labilnes LONG-TERM DEBT, excluding current portion OTHER LIABILITIES Total labilities EQUITY Preferred stock $0.01 par value, 100,000,000 shares authorized no shares issued and outstanding Common stock $0.01 par value: 900,000,000 shares authorized 438,189,000 and 437,204,000 shares issued and outstanding Additional paid-in capita 6,107 (1,199) 7,887 12,799 304 13. 103 40,830 5,800 (1,014) 5,988 10,778 301 1,079 36,347 Retained earmings Total Costco stockholders equity... Total equity TOTAL LIABILITIES AND EQUITY The notes are an integral part of these consolidated financial statements. 36