Asset Utilization Rate Analysis of a Company Used for Group ProjectCostco has been a strong company for many years. The asset utilization to efficiency ratio is important in evaluating this business because this ratio is frequently used to compare a company's efficiency over time. In accounting, an asset is an economic resource, meaning anything that can be owned or controlled to produce value has positive value to the business and is considered an asset. The more efficient Costco is at managing assets, it shows how effectively it is using its assets to generate revenue. A revenue gain does not mean they are making a profit, but part of the company's goal is to maximize profits. The primary assets we use to evaluate asset utilization are accounts receivable, inventory and fixed assets, cost of goods sold, sales and total assets. Target looked for ways to expand. Target's value proposition is "Expect more." Pay less. This has always been their proposition and it seems to be working. Target seems to meet most of its consumers' expectations and offer them the best. Target is a competitive retail market compared to Wal-Mart and Costco, mainly because they carry better brands than Wal-Mart. This strategy markets the Wal-Mart brand. The market is competitive and one wrong move will haunt them. For example, Target's 5% rewards program on purchases at Target stores and on its online website generates millions and new customers who have yet to shop at Target. Target has expanded and built more City stores and opened 125-135 stores in Canada and is slowly working to expand to operate 200 or more stores over time. The only recent issue with credit card security has affected many of their sales. There was a ratio...... middle of paper ......ory, meaning their strong sales indicate better liquidity. Costco's daily inventory sales are much lower, meaning they take less time to convert their inventory into sales and Target's daily inventory sales are higher, meaning they take longer to generate their inventory for sales. Costco is also more successful in collecting accounts receivable because its days sales receivables are much lower and the target days sales receivables are nearly 10 times higher. Cash matters a lot to a business and being able to raise cash faster than its competitor gives it more options. Costco's asset turnover is higher, meaning how many times Costco sells or turns over its assets, which is a sign of high efficiency. Costco is known for its efficiency internally and externally. Costco Takes Over and Uses Its Assets to Drive Sales.