Preview

Performance Analysis of Costco Wholesale Corporation

Best Essays
Open Document
Open Document
2145 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Performance Analysis of Costco Wholesale Corporation
Performance Analysis of Costco Wholesale Corporation

xxxx

Strayer University

FIN 534: Financial Management

Professor: xxxx

June 11, 2012

Costco Wholesale Corporation
Higher interest rates, levels of unemployment, consumer debt levels, and unsettled financial markets are general economic factors that can adversely affect the company’s financial performance. These key elements play an important role in how a company chooses to move forward operationally and financially. Therefore, it’s imperative that we as investors understand a company’s business strategy as well as have a general knowledge of issues which may impact their decisions. Prior to investing, we should review a company’s operations, stock price, and their ratios to decide if a firm a financially stable to meet their obligations.
Company Overview Costco Wholesale Corporation and its subsidiaries (Costco) began operations on September 15, 1983 in Seattle, Washington. James Sinegal and Jeffery Brotman founded it. In October 1993, Costco merged with The Price Company, which established the membership warehouse model, to form Price/Costco, Inc. In January1997, the company changed its name to Costco Wholesale and all Price Club locations were rebranded as Costco Companies, Inc. August 30, 1999, the company was reincorporated and its name was changed to Costco Wholesale Corporation. To date, the company has grown to become the largest warehouse club retailer and the second largest general retailer in the United States. The company currently operates 602 warehouses, which include 435 in the United States and Puerto Rico, 82 in Canada, 32 in Mexico, 22 in the United Kingdom, 13 in Japan, 8 in Taiwan, 7 in Korea, and 3 in Australia (Costco Wholesale Corporation). Additionally, a division of the company, Costco Wholesale Industries, operates manufacturing businesses such as special food packaging, optical laboratories, meat processing, and jewelry distribution (Costco Wholesale


Bibliography: Bucknell. (2012). Costco- "Always Puttien Employess and cusotmers First". Retrieved June 2012, from Wordpress.com: http://bizgovsociii.wordpress.com/2012/04/17/costco-always-putting-employees-and-customers-first/ Costco Wholesale Corporation. (n.d.). Company Profile. Retrieved 06 09, 2012, from Costco Wholesale Corporation: http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-homeprofile Investopedia. (2012). Financial Performance. Retrieved 2012, from Investopedia.com: http://www.investopedia.com/terms/f/financialperformance.asp#axzz1y5N9y6ZQ Mergent. (2012). Costco Wholsesale Corp . Retrieved 2012, from Mergentonline.com: http://www.mergentonline.com.libdatab.strayer.edu/equitypricing.php?compnumber=16720 Wikinvest. (n.d.). Costcost Wholesale (COST). Retrieved June 09, 2012, from Wikinvest: http://www.wikinvest.com/stock/Costco_Wholesale_(COST)#Business_Segments Wikipedia. (n.d.). Financial Ratio. Retrieved June 2012, from Wikipedia.org. Wire, T. S. (2012, June). Costco Wholesale Corporation Stock But Recommendation Reitereated (COST). Retrieved June 2012, from The Street Website: http://www.thestreet.com/story/11576376/1/costco-wholesale-corporation-stock-buy-recommendation-reiterated-cost.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    A Comparison of Costco to Sam 2
    • 716 Words
    • 2 Pages

    A Comparison of Costco to Sam 2

    Costco's co-founder and chief executive officer, Jim Sinegal, is the son of a coal miner and steelworker.In 1954,when he was 18 years old,a friend asked him to help unload mattresses for the store called Fed-Mart.That one-day job turned into a career.He become a protege of Fed-Mart's chairman, Sol Price, and soon rose to executive vice-president for merchandising.Mr.Price invented the idea of high-volume warehouse stores that sell a limited number of products.Sol Price later sold Fed-Mart to a German retailer in 1975,and then Mr.Sinegal left and helped Mr.Price start a new warehouse company,Price Club.In September 1983,a Seattle entrepreneur,Jeffrey Brotman,helped Mr.Sinegal create Costco Wholesale Corporations.The company began with a single store in Issaquah,outside of Seatte, and by 2005 it had a total of 460 warehouses in many different countries. Costco Wholesale Corporation operates a chain of membership warehouses that sell a wide variety of name-brand products, as well…

    • 716 Words
    • 2 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Costco Swot Analysis
    • 167 Words
    • 1 Page

    Costco Swot Analysis

    As we look at our current economical status, we see how the global financial market is in turbulence due to changes in demographics. To subdue these changes Costco has constantly tried to pull in and retain customers. This allows them to keep a strong position in market share and acquiring profits. Costco is in the membership wholesale industry that provides merchandize at a much lower price than others. Although Costco is one of the biggest companies in the USA, there are many strengths and weaknesses in their strategy. Taken that Costco has many competitors, it must continue to respond to industry pressure through innovation. Considering the many accomplishments of Costco, there are many things they can improve on. Increasing profitability…

    • 167 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Powerful Essays

    Costco vs. Wal-Mart
    • 1269 Words
    • 6 Pages

    Costco vs. Wal-Mart

    Costco was founded in 1976 as a small business in San Diego. In 1983, Costco started its warehouse club industry in Seattle. Since then, Costco spent less than 6 years to become the first company ever to grow from zero to…

    • 1269 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Sam's Club and Costco Wholesale Corporation
    • 422 Words
    • 2 Pages

    Sam's Club and Costco Wholesale Corporation

    Costco Wholesale Corporation was created in 1983 when its first store opened in Seattle. Costco runs on a membership warehouse concept, which was first created by Price Club in 1976. Now, though Costco has only subsidiaries in eight countries, but Costco is the ninth largest retailers around the world, and is one of the most successful discount warehouse firms in North America. In 2008, Costco open the store in Australia. Through the leadership of Jim Sinegal, Costco has been able to create value…

    • 422 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Microsoft Target Vs Verizon
    • 709 Words
    • 3 Pages

    Microsoft Target Vs Verizon

    When one is trying to determine the health of a company and the risk involved either in terms of employment or investment opportunity it is wise to either view or create a Financial Statement Analysis. In evaluating each of the methods, as a team it was recognized that each part is a snippet of the financial structure of each of the companies. By analyzing and then comparing the data from the solvency ratio, liquidity ratio and a probability ratio, the team could make a firm decision in Microsoft regarding the present and future financial…

    • 709 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Costco Strengths
    • 828 Words
    • 4 Pages

    Costco Strengths

    Costco used to be a store under the Price Club name and it focused on serving small business at the very beginning. However, the company found Costco can attract a lot of non-business customers. According to Costco’s official website, Costco and Price Club merged in 1993 and combined together. It had 206 stores and earned $16 billion annually. In addition, Costco mentioned that the operating philosophy is lowing down the cost of goods sold and saving their customers’ money. Because of this principle, Costco changed the retail world and their membership help Costco become a successful company.…

    • 828 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Costco Analysis
    • 742 Words
    • 4 Pages

    Costco Analysis

    Competition in the North American wholesale club industry is pretty high. Sam’s Club and BJ’s are Costco’s main competitors and they are all trying to achieve lower prices by cutting corners where they can. Walking into a wholesale store, the customer will not see any extravagant displays, they will see what could be mistaken for a warehouse full of inexpensive shelving and very little store décor. Another way that these types of stores keep their prices low is by reducing their labor costs. There are very few employees on the floor and these types of wholesale facilities are very much self-serve.…

    • 742 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    Costco: Internal/External Analysis
    • 7785 Words
    • 32 Pages

    Costco: Internal/External Analysis

    Hudson, K. (2005, November 11). Warehouses Go Luxe; Costco, Sam’s Club Stock Wine Coolers, Grand Pianos to Tempt Holiday Shoppers. Wall Street Journal, p. B.1. Retrieved February 13, 2006, from ABI/INFORM Global database.…

    • 7785 Words
    • 32 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Board of Directors and Director Costco Wholesale
    • 9838 Words
    • 40 Pages

    Board of Directors and Director Costco Wholesale

    Costco Wholesale Corporation (Costco or “the company") operates an international chain of membership warehouses, mainly under the "Costco Wholesale" brand name. The company…

    • 9838 Words
    • 40 Pages
    Powerful Essays
    Read More
  • Best Essays

    Costco Organizational Analysis - Spring 2013
    • 3826 Words
    • 16 Pages

    Costco Organizational Analysis - Spring 2013

    The purpose of this Organizational Analysis is to discuss Costco’s current mission and values, provide a snapshot of their existing overall business model and the environment they are working in, and then discuss the key success factors required to succeed in their industry. Beyond that will be an examination of what resources (tangible, intangible, and human) and capabilities (functional and value chain) are needed to deliver on these key success factors, as well as analyze how Costco ‘stacks up’ to the competition in those areas. Finally there will be a discussion of what areas should be either improved or exploited moving forward to give Costco a more distinct competitive advantage (and therefore increased profits) in this industry.…

    • 3826 Words
    • 16 Pages
    Best Essays
    Read More
  • Best Essays

    Costco History
    • 1827 Words
    • 8 Pages

    Costco History

    Costco is a members only, international retail chain discount warehouse Club. They combine high quality merchandise with low prices. Costco began in 1976 as Price Club and restructured in 1997 as Costco Wholesales. Costco’s passion, mission, and ethics have been the key to the leading membership warehouse retail giant to supply their customers with low prices. Their low cost business strategies and dedication to their employees, suppliers and shareholders have proven success.…

    • 1827 Words
    • 8 Pages
    Best Essays
    Read More
  • Best Essays

    Costco Executive Summary
    • 2428 Words
    • 10 Pages

    Costco Executive Summary

    The company has grown rapidly from its first open in Seattle, Washington in 1983 to 627 stores worldwide in 2013, become the fifth largest retailer in the U.S and eleventh largest in the world (Costco 2011). According to Jim Sinegal, the Company’s Co-Founder and Director, ability to run extremely low overhead, and to offer employees with greater values, and benefits than its competitors are enables the company to generate greater profit margin over years (Costco 2013). In a reward, Costco has lower employee turnover rate than Wal-marts, and continues to generate benefits for its…

    • 2428 Words
    • 10 Pages
    Best Essays
    Read More
  • Powerful Essays

    OUTLINE 1

    • 1373 Words
    • 8 Pages

    OUTLINE 1

    Introduction to Financial Analysis for Corporations, 3’rd Edition (dark grey cover), by George W. Blazenko. A hard-copy can be purchased from the SFU bookstore. An electronic version of this manuscript is available free of charge from the course website. Documents…

    • 1373 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Costco
    • 3784 Words
    • 16 Pages

    Costco

    Wholesale Club History - From Price Club to Costco
In the mid-1970s, small business owners had no options other than to buy their products and supplies from regional wholesalers or cash-and-carry operations. Sol Price set out to offer an alternative. In 1976, with $800,000 of his own, $1 million raised among local California small business owners, and an additional $500,000 from former FedMart employees, Price, along with his son Robert, formed the Price Company and opened the first Price Club store in San Diego. Price's other son, Laurence, declined to join the new company.…

    • 3784 Words
    • 16 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Costco
    • 333 Words
    • 2 Pages

    Costco

    Costco is open to the public and also features privately owned brands like Kirkland signature. Costco Wholesale Corporation is a membership-only warehouse club and is the second largest retailer in the United States, the seventh largest retailer in the world and the largest membership warehouse club chain in the United States. Costco employs 126,929 full and part-time workers in the United States, and 185,207 full and part-time employees worldwide. Costco offers lower prices and better values buying in bulk from wholesalers. At the Costco I work at, we run a tight operation with extremely low overhead which enables us to pass on savings to our members. Coupons are a huge part of our sales, as pamphlet books are mailed to our member’s households every other week.…

    • 333 Words
    • 2 Pages
    Satisfactory Essays
    Read More

Related Topics