ACCT 301
Project One
Business Report
Costco Wholesale Corporation
ACCT 301 –UMGC
Costco is a retail company that operates a network of warehouses through an annual
membership-based concept that allows members to receive a select number of nationally
branded and private label products at lower prices in bulk. The merchandise offered is food and
sundries, hardlines, fresh foods, soft lines, and ancillaries. Our online operations give us the
opportunities to interact with our members through the internet and provide extra services that
may not be found in our warehouses. Ancillary companies offer expanded goods and services
inside or next to our warehouses, allowing members to shop more frequently. These businesses
include pharmacies, gas stations, food courts, optical dispensing centers, and hearing-aid centers.
With several suppliers of domestic brand-name products, we have direct purchasing
relationships. We do not procure from one particular source a large portion of merchandise,
in purchasing adequate quantities of merchandise and assuming that we would be able to
access alternative suppliers without major disruption to our company if current supply
sources were inaccessible.
We sell bulk goods before paying for them, even while making use of early payment discounts.
We purchase most of our merchandise directly from manufacturers; however, we also have
warehouses in which items are consolidated to reduce shipping costs. Our depots receive large
shipments from manufacturers which can be quickly shipped. This process ensures that volume
and handling efficiencies are maximized, thereby resulting in lower costs. As long as quality
and member demand are strong and the benefit to our members is important, we also buy and
produce private-label goods.
Costco's net sales for the fiscal year 2020 totaled $163 billion, a rise of 9%, with a comparative
8% increase in sales. Net profits rose by $4 billion, a 9% percent increase. Additionally, the
company has over 100 million members globally that membership revenue was 3.54 billion.
The receivables increased from 1535 in 2019 to 1550 in 2020. The receivables include retailer,
reinsurance, credit card reward, and third-party pharmacy. Discounts and volume rebates are
included. Balances are on a gross basis, apart from any associated payable due. Merchandise
inventories increased to 12,242 in 2020 from 11,395 in 2019. Inventory is reported at the lower
of cost or market. The cost approach is used to value inventories by the last-in, first-out (LIFO)
method. The LIFO process provides more precise estimates by comparing current expenses with
current sales.
Project One
Business Report
Costco Wholesale Corporation
ACCT 301 –UMGC
Costco is a retail company that operates a network of warehouses through an annual
membership-based concept that allows members to receive a select number of nationally
branded and private label products at lower prices in bulk. The merchandise offered is food and
sundries, hardlines, fresh foods, soft lines, and ancillaries. Our online operations give us the
opportunities to interact with our members through the internet and provide extra services that
may not be found in our warehouses. Ancillary companies offer expanded goods and services
inside or next to our warehouses, allowing members to shop more frequently. These businesses
include pharmacies, gas stations, food courts, optical dispensing centers, and hearing-aid centers.
With several suppliers of domestic brand-name products, we have direct purchasing
relationships. We do not procure from one particular source a large portion of merchandise,
in purchasing adequate quantities of merchandise and assuming that we would be able to
access alternative suppliers without major disruption to our company if current supply
sources were inaccessible.
We sell bulk goods before paying for them, even while making use of early payment discounts.
We purchase most of our merchandise directly from manufacturers; however, we also have
warehouses in which items are consolidated to reduce shipping costs. Our depots receive large
shipments from manufacturers which can be quickly shipped. This process ensures that volume
and handling efficiencies are maximized, thereby resulting in lower costs. As long as quality
and member demand are strong and the benefit to our members is important, we also buy and
produce private-label goods.
Costco's net sales for the fiscal year 2020 totaled $163 billion, a rise of 9%, with a comparative
8% increase in sales. Net profits rose by $4 billion, a 9% percent increase. Additionally, the
company has over 100 million members globally that membership revenue was 3.54 billion.
The receivables increased from 1535 in 2019 to 1550 in 2020. The receivables include retailer,
reinsurance, credit card reward, and third-party pharmacy. Discounts and volume rebates are
included. Balances are on a gross basis, apart from any associated payable due. Merchandise
inventories increased to 12,242 in 2020 from 11,395 in 2019. Inventory is reported at the lower
of cost or market. The cost approach is used to value inventories by the last-in, first-out (LIFO)
method. The LIFO process provides more precise estimates by comparing current expenses with
current sales.
