1 / 13

A MORE DETAILED ANALYSIS OF THE FINANCIAL REPORTS

A MORE DETAILED ANALYSIS OF THE FINANCIAL REPORTS. Discount, Variety Store - Costco Aileen Huang. Costco. Established in 1983 71,200 members 451 Warehouses/stores in U.S. Sales: $103m; Net income: $2m Competitors: Sam’s Club, BJ Wholesale

yul
Download Presentation

A MORE DETAILED ANALYSIS OF THE FINANCIAL REPORTS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. A MORE DETAILED ANALYSIS OF THE FINANCIAL REPORTS Discount, Variety Store - Costco Aileen Huang

  2. Costco • Established in 1983 • 71,200 members • 451 Warehouses/stores in U.S. • Sales: $103m; Net income: $2m • Competitors: Sam’s Club, BJ Wholesale • Started same time, only three big wholesale clubs still in operation • Market share 67% Sam’s Club; 17% Costco • 2013 NEA $11,565M; NFL $732; EPAT 1,818; FEAT -$35

  3. Inventory LIFO/FIFO Comparison • Assume using LIFO for all U.S. inventory • The accumulative impact of the LIFO valuation was $81 and $108 • FIFO > LIFO • Due to net deflationary trends in 2013, a benefit of $27 was recorded to reduce LIFO valuation; inflationary trends in 2012 resulted a charge to merchandise costs of $21

  4. Inventory LIFO/FIFO Comparison • Balance Sheet effect • Increase in inventory$81.0 • Tax saving -30.1 • NEA increased by 50.9 • Income statement effect • LIFO reserve decrease27.0 • Tax saving -10.0 • EPAT lower by 17.0

  5. Operating leases vs. capital leases • IRR6.74%

  6. Operating leases vs. capital leases • Balance Sheet effect • NEA increase $1,564 • NFL current 13.96 • NFL noncurrent 1,549.64 • Income Statement effect • Operating expense $225 • Interest expense 105.39 • Depreciation expense95.0 • EPAT increase 81.8 • FEAT increase 66.3

  7. Share-Based Compensation • Step 1: the value of options at beginning of 2013 by using beginning of year share price • 3,161*(90.2-40.9)=$155,837

  8. Share-Based Compensation • Step 2: the value of options at beginning of 2013 using end of year share price • 3,161*(111.4-39.7)=$226,644

  9. Share-Based Compensation • Step 3: the value of options exercised during 2013 • 1,435*(102.25-36.22)=$92,672

  10. Share-Based Compensation • Step 4: the value of options cancelled during this year • $0

  11. Share-Based Compensation • Step 5: the value of options at end of 2013 using end of year share price • 1,726*(111.4-39.7)=$123,754

  12. Share-Based Compensation • Step 6: an estimate of additional share-based compensation • (5)-(2)+(3)+(4)＝-$10,217

  13. Share-Based Compensation • Step 7: adjusting • Increased NFL: $123,754 • Decrease CSE: $123,754 • Increase EPAT: $10,217 • Decrease FEAT: $21,866 • (2)-(1)-(3)-(4)

More Related