Goal

Write a report discussing Costcos operational performance during the period defined in the case. Your report can be up to five pages, 1.5 spaced, 11 font size, and APA style preferred. The page limit does not apply to tables, figures and references. One submission per group is sufficient. Please submit it using the Blackboard homework submission link in module 4s assignment and activities folder.

Overview of the Assignment

• Purchase and download the case study: Costco Wholesale Corp. Financial Statement Analysis (A) from the course pack link in the syllabus.

This case is about a financial statement and a ratio analysis case involving a high-growth retail company.

The case begins with an individual shareholder in Costco Wholesale Corp who is trying to evaluate the operational performance of the business she has invested in over the five years between 1997 and 2002. She seeks to answer three questions:

1. Has Costco become more or less financially efficient over this time period?

2. How has it financed its growth?

3. Should she keep investing in Costco?

The Report

Your report should help answer the above two questions.

1. An executive summary (150 words) that is clear about the observations and recommendations to the investor.
2. Discuss industry economic attributes.
3. Conduct benchmark comparisons (note: picking the right competitor from the case will help).
4. What is Costcos strategy at the time?
5. Conduct the first level of ROA and ROE (trend analysis). Conduct the second level of analysis by using DuPont system to break down ROA/ROE into profit margin, asset turnover, and/or financial leverage. Conduct the third level analysis to understand the specific source of the observed performance trend. See ppt slide 35 for the outline of the three-level performance analysis.
6. Discuss sustainable growth (see slide 34).
7. Given Costcos strategy, provide your readings of its performance during the period presented in the case and conclude with your suggestions to the investors three questions.

Due Dates

This assignment should be submitted by 11:59 pm EST on Day 7 of Module 7.

GRADING CRITERIA:

Assessment Criteria	Needs Improvement (50 points)	Proficient and above (100 points)	Score
Financial Analysis	The appropriate ratios are not utilized in the analysis. The correct inference is not drawn. The analysis is not well supported. The analysis is not organized, cohesive, and/or well-structured. The analysis is not or marginally informative and helpful for an analyst/investor. Executive summary has mechanical errors, which may impede understanding. Some project components are missing; Does not follow the assignment requirements.	The appropriate ratios are calculated in the analysis. The correct inference is drawn. The analysis is adequately supported by the analytical results. The analysis is cohesive and well-structured. The analysis is informative and useful for an analyst/investor to make financial decisions. Executive summary has minor grammatical or spelling errors, but does not impede understanding. Follows most assignment requirements with minor deviations.