CF2-3 Annual Report

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来自 Korea Advanced Institute of Science and Technology 的课程

Finance for Startups

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Korea Advanced Institute of Science and Technology

Finance for Startups

个评分

Finance is one of the key ingredients for successful startups. Many entrepreneurs, however, lack knowledge of finance. This course teaches basic financial knowledge needed in starting and operating startups to entrepreneurs or would-be entrepreneurs who did not major in finance. Students of this course will learn to read and understand financial statements such as balance sheets, income statements and cash flow statements. They will also practice simple financial planning of a startup. This course also covers the concept company valuation as well as how startups get funding. This is a practical course aimed at direct application of the knowledge gained into running real startups. It also aims to enable entrepreneurs and would-be-entrepreneurs to understand the "language of finance" so that they can talk to professionals with confidence.

从本节课中

Cash flow statement and financial ratios

You will learn why cash is king! Let's practice financial ratios with real company data.

CF2-1 Cash Flow7:52

CF2-2 Cash Flow Statement Practice5:41

CF2-3 Annual Report6:24

CF2-4 Financial Ratios-Profitability6:14

CF2-5 Financial Ratios-Efficiency8:29

CF2-6 Financial Ratios-Liquidity & Leverage9:08

CF2-7 Financial Ratios Practice4:32

与讲师见面

Steve Ahn
Professor
K-School

[MUSIC]

So in this session, we'll talk about the annual report of Costco.

So it is also called a form 10-k, and

I already ask you to have a look at this annual report.

We will use Costco's annual report to practice financial ratios.

Here is how to read an annual report.

First, let's look at the letter to shareholders from its CEO.

And there is a business overview and

you can understand the overall business of this company.

Then, go to the end of the report and have a look at the financial statements.

Using those two financial statements to

understand the details of these statements.

And then go to the session on management's discussion and

analysis of financial condition and results of operations.

If you are interested in going deeper,

then you could visit the section for risk factors and legal proceedings.

Then let's look at the business of the Costco and

wholesale club concept.

Costco offers low prices on limited selection of products.

And they achieve this by high sales volumes and rapid inventory turnover.

In order to shop at Costco, you need to be a member, so you need to buy a membership.

And Costco has operating efficiencies by volume purchasing,

efficient distribution, and

reduced handling of merchandise in warehouse facilities.

So this shows the inside of Costco shops.

And they stack up products as received from their

vendors to reduce the cost of display.

Let’s look at history of wholesale clubs.

The first wholesale club was Price Club.

And it opened in San Diego, California in 1975.

Price Club expanded in California and

in the West of the United States.

Costco was founded in 1983 in Seattle, Washington.

And Costco expanded in the Pacific Northwest and Canada.

These two companies merged in 1993,

creating Price/Costco, later simplified to Costco.

Let's look at the competitors of Costco.

There are direct competitors like Sam's Club, run by Walmart, and

BJ's in the East Coast of the United States.

And Costco is the largest warehouse club, as shown in this graph.

And there are retailers like Walmart and Target.

And there's a strong emerging competitor on-line retailer like Amazon.

Here is an income statement of Costco for the fiscal year of 2016.

Its revenues $118 billion including net sales of 116.

And membership fees are about $2.6 billion.

And its net income is $2 billion and $350 million.

Here we compare the stock price of Costco and Walmart.

As of October 2016,

Costco's stock price is $151,

and for Walmart $69.

The total number of shares is 441 million shares for

Costco and 3.2 billion shares for Walmart.

So we can calculate the total company value or

market cap which is $67 billion for

Costco and $222 billion for Walmart.

EPS is the net profit per share.

And that's $5.33 for

Costco and $4.57 for Walmart.

The P/E ratio is obtain by dividing the stock price

with EPS and that is 28.3 for

Costco and 15.1 for Walmart.

If a company's P/E ratio is high that means that its

stock is very popular in the stock market.

And also the investors look the future of this company very brightly.

And you probably are curious why there is a big difference

between the P/E ratios of Costco and Walmart.

So let's find out why P/E ratios of Costco and Walmart are different.

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