Costco Wholesale Corporation — Earnings Quality Grade C
COST · Consumer Defensive
Some red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 4 days, change +0 days YoY
AR outpaced revenue for 2 consecutive years
Revenue 8.2%, CFFO 17.6%. Cash follows revenue
Expense Quality
Inventory -2.8% vs COGS 7.9%. Normal
CapEx growth 16.7% vs revenue 8.2%. Normal
SG&A/Gross Profit = 70.6%, exceeds 70%
Gross margin 12.8%, change +0.2pp. Stable
Cash Flow Quality
CFFO/NI = 1.65. Profits backed by cash
FCF $7.8B, FCF/NI = 0.97
Accruals ratio = -6.8%. Low accruals
Cash $15.3B covers debt $8.2B
Balance Sheet Health
No goodwill. Clean balance sheet
Debt/EBITDA = 0.6x. Healthy
Other assets 3.8% vs revenue 8.2%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
No goodwill
Manipulation Score
M-Score = -2.66 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08