Hi,

The question is to write a financial analysis report for Costco. Four pages and double spaced include an executive summary.

Please kindly find all detailed requirement as attached.

Thanks a lot for your help.

This is a GOOD example from an Accounting & Finance assignment. Executive Summary This report provides an analysis and subject matter evaluation of the current and prospective profitability, liquidity and financial stability of Outdoor Equipment Ltd. Methods of analysis include trend, methods of analysis horizontal and vertical analyses as well as ratios such as Debt, Current and Quick ratios. Other calculations include rates of return on Shareholders Equity and Total Assets and earnings per share to name a few. All calculations can be found in the appendices. Results of data analysed show that all ratios are below industry averages. In particular, comparative performance is poor in the areas of profit margins, liquidity, credit control, and inventory management. Findings The report finds the prospects of the company in its current position are not positive. The major areas of weakness require further investigation and remedial action by management. Conclusions Recommendations discussed include: improving the average collection period for accounts receivable improving/increasing inventory turnover reducing prepayments and perhaps increasing inventory levels Recommendations (note that conclusions and recommendations can be bulleted) Some of the limitations include: Any Limitation(s) of forecasting figures are not provided nature and type of company is not known the report. nor the current economic conditions data limitations as not enough information is provided or enough detail i.e. monthly details not known results are based on past performances not present Assignment 4 1.Costco Financial Statement Analysis Goal - Write a report discussing Costco's operational performance over the last five years. Your report can be up to four pages double spaced. - Please conclude your report with an executive summary no more than 150 words Overview of the Assignment 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 last five years. She seeks to answer two questions: 1) Has Costco become more or less financially efficient over this time period? 2) How has it financed its growth? Your report should help answer her two questions. o You can organize your analysis of the issues into three parts to address the above two questions: a. Common-size financial statements (for question 1) b. Benchmarking ratios particular to retail companies (for question 1). c. Sustainable growth analysis (for question 2) o Focus on the financial analysis, rather than the calculation of ratios. What does it reveal? o Think about the business behind the numbers in Costco's performance by discussing the company's strategy and other such qualitative information. Tips for Costco: 1. An executive summary that is written in such a way that clear about their observations and recommendations to the investor. 2. Discuss industry economic attributes. 3. Conduct benmark comparisons (note: picking the right benmark will help). 4. What is Costco's 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 slides 34). 7. Given Costco's strategy, provide your readings of its performance during the period presented in the case