Costco Essay

12622 Words Nov 18th, 2013 51 Pages
STANFORD
GRADUATE SCHOOL OF BUSINESS

CASE: A-186A DATE: 06/19/03

CosTco WHOLESALE CORPORATION FINANCIAL STATEMENT ANALYSIS (A)

INTRODUCTION

Margarita Torres first purchased shares in Costco Wholesale Corporation in 1997 as part of her personal investment portfolio. Between 1997 and 2002, she added slightly to her holdings from time to time when the company sold stock for what she felt was a reasonable valuation, and up to that time she did not sell any of her shares. Having watched Costco grow from 265 warehouses to 365 worldwide, and from sales revenue of $21.8 billion to $34.1 billion, she wondered what factors led to such successful growth. She also wanted to determine whether those factors
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Now, in July 2002, having profited well from her investment, she decided it was time to update her analysis and determine whether the company was still operating efficiently.

Brian Tayan prepared this case under the supervision of Professor Maureen McNichols as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
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Costco Wholesale Corp.: Financial Statement Analysis ‘A) A-186A p. 2
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INDUSTRY OVERVIEW — RETAIL

Department Stores

The retail industry in the United States was transformed in the late 1800s by the rise of department stores and general merchants. Companies such as R.H. Macy & Company (founded in 1858) and Bloomingdale Brothers, Inc. (1872) opened stores in New York City and

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