Profitability Analysis of Costco Wholesale vs. Walmart Inc.
Yihan Mao
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Accounting
Faculty Research Mentor: Huaibing Yu
Abstract:
Research BackgroundThis project will compare and analyze the profitability of Costco wholesale and Walmart Inc., which are two major wholesale retailers in the United States. Both Costco and Walmart Inc. adopt the business model of large-scale procurement, low gross profit and high turnover rate, but there are differences in operation strategy, cost control and market share. Our analysis will focus on assessing the financial performance of both companies over a five-year period (2020-2024), with profit margin being a key financial index. By examining a range of financial indexes, we aim to gain insight into how these two companies have managed to control costs, grow revenues and maintain profitability in a highly competitive market.Research ObjectiveThis project will evaluate the profitability of Costco wholesale and Walmart by calculating and analyzing their gross profit margin, operating profit margin, net profit margin, return on equity and return on assets.Research MethodThe project uses publicly available financial data from the two companies to calculate the comparison. These data come from the company's annual financial statements and industry databases, and will be in the form of tables or bar charts to more visually show the trend of profit margins.Research SignificanceI believe that the dynamics of profitability studied in this project will help business managers, investors, market analysts and business strategists to get a better understanding in corporate profit models and provide valuable insights. At the same time, the research results of this project will point out the importance of cost management, pricing strategy and asset use in company management to maintain profitability.