Business Finance Homework Help

Overview:

Costco Wholesale Corporation (Nasdaq:COST) and BJ’s Wholesale (NYSE:BJ) are both
membership only warehouse clubs based in the United States. Costco operates multinationally
and as of 2020, was the fifth largest retailer in the world. BJ’s Wholesale operates primarily in
the East Coast of the United States with plans to expand domestically.
You are an independent CPA who also provides investment advice. You are going to write a
one-page memo in which you answer a client’s questions about these companies and
recommend whether to pursue an investment in one or the other. What you advise your client is
up to you but be sure to justify your position.
BJ’s Wholesale
1/30/2021 10-K Full Document: https://tinyurl.com/fzkk8ppf
2/1/2020 10-K Full Document: https://tinyurl.com/5f82tcf9
Costco Wholesale Corp
8/30/2020 10-K Full Report: https://tinyurl.com/nv6hvx9f
9/1/2019 10-K Full Report: https://tinyurl.com/k32z4235
Learning Outcomes:
Students will advance their business writing, analysis, and application skills in an authentic
accounting context. Students will engage in effective written communication practices by
crafting a professional memo and report that integrates research and analysis skills, technical
information, and expert writing proficiency.
Instructions:
• Address your memo to your client John Kimble. Mr. Kimble is a retired kindergarten
teacher.
• Assume that you are writing on April 1, 2021, shortly after the filing of BJ’s Wholesale
2020 Form 10-K.
• In the opening paragraph, explain the purpose of your memo. Then, in the body of the
memo, respond to Mr. Kimble’s questions and advise him in which company he should
pursue investment.
• Attach your ratio analysis tables to your memo. The tables do not count toward the page
limit.
• Indicate where you are getting your information, e.g. “on page 23 of the 10-K”.
• You can draw on classroom or textbook materials to develop your response. However,
keep in mind the FASB Accounting Standards Codification (ASC) is the most
authoritative source of GAAP. You should reference the ASC instead of the textbook,
e.g. “according to ASC 350-20-35-30”.

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• Assume that current ASC references were in place at the time you are writing this memo.
• Remember to keep the tone of your writing in tune with the professional setting.
John Kimble’s Email:
I’m going to ask you a bunch of questions, and I want to have them answered immediately.
I’m considering investing in either Costco Wholesale or BJ’s Wholesale. Since COVID-19 has
hit, it seems that both companies have done well. I am trying to decide which is a better long-
term play. As you know, my strategy is to invest in companies with solid fundamentals. I only
invest for the long term- nothing speculative.
BJ’s Wholesale just released its 2020 (FYE 1/30/2021) Form 10-K. I skimmed the 10-K and I
see that they have grown substantially in the last 3 years. I really like their revenue growth
trend. But, Costco seems like a solid company with a good reputation. The stock prices are so
different, so the decision is a really big one for me. I really want to know which one you think
will be the best long-term investment and make me more money.
Please help me understand the underlying fundamentals. Specifically:
• Why did each company’s revenues grow in 2020 even with the impacts of COVID-19?
• How and when do they recognize revenue?
• Are the criteria consistent with GAAP? (make sure to analyze using most current
GAAP we are learning in class)
Please run your standard ratio analysis table. These companies are so different in size, ratios
would be really helpful. In your memo, please tell me about any important ratios that you think
are vital for comparison of these two companies and making my decision. Remember I’m no
accountant.
Come on, tell me: Which one should I invest in?
John
Your standard ratio analysis table:
You use Microsoft Excel to prepare a standard ratio analysis table for all your clients. Your
table includes the ratios below. They are all listed in the Wiley textbook Chapter 5 Appendix
5A. Your table includes all ratios for the current and prior year to four decimal points. In
summary, your standard ratio analysis table includes:
Ratios:
• Current Ratio
• Quick Ratio
• Inventory Turnover Ratio
• Asset Turnover Ratio
• Profit Margin on Sales
• Return on Assets
• Return on Common Stockholders’ Equity
• Price-earnings Ratio
• Debt to Assets Ratio
• Cash Debt Coverage

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Information to include:
• Column 1: # List the ratio number 1-10.
• Column 2: Type Indicate the type of ratio – Liquidity, Activity, etc.
• Column 3: Ratio Indicate the name of the ratio.
• Column 4: 2020 Indicate the 2020 ratio.
• Column 5: 2019 Indicate the 2019 ratio.
• Column 6: Change Indicate the year-to-year change.
• Column 7: Assessment Indicate Good, Bad, or N/A.
You include an Assessment column with your assessment of each year-to-year change:
• Good Year-to-year change makes the company seem to be a better investment.
• Bad Year-to-year change makes the company seem to be a worse investment.
• N/A Not applicable; no year-to-year change.
In making this assessment, you consider what the year-to-year change indicates about the
company’s financial improvement or deterioration and its value to a potential investor. You
usually do not explain your assessment, although occasionally you do this in a memo if your
client specifically asks you to.
Additional Information:
For the price-earnings ratio, you need market information not contained in the 10-K. Here they
are:
Costco Wholesale:
Market price per share at 8/30/2020: $336.80
Market price per share at 9/1/2019: $282.50
BJ’s Wholesale:
Market price per share at 1/30/2021: $42.07
Market price per share at 2/1/2020: $20.52
Grading:
Memo is worth 60 points and will be graded based on
• Adherence to the instructions
• Answering all client questions
• Proper ASC references where applicable
• Thorough explanations
• Professional tone
Ratio Analysis Table is worth 40 points and will be graded based on
• All ratios included
• All ratios calculated correctly
• All columns included
• Good/bad assessments

INSTRUCTIONS ABOVE.

I need something to verify I am not messing up and I need all of these parts completed with the ratio calculations done correctly to four decimal points calculated in excel so I can verify. Please use the correct years from the financial statements. Please calculate all the required financial ratios with all the necessary other parts in the excel doc with the formulas in the cells so I can verify the correct numbers were pulled from the statements, plus need four decimal places per ratio, then plz do a plagiarism free one page memo giving advice to the client and responding to the clients questions. Plz use the documents attached from Costco and from BJs to caluclate the ratios in excel, then the memo, plz make sure everything correct and I will tip. This should be a breeze for an expert in financial accounting/ratio analysis/user of excel. Thank you.