Resource Utilization Ratio Analysis of a Company Used for Group Project Costco is a strong company for many years. The resource utilization/efficiency ratio is important to evaluate this company because this ratio is often used to compare a company's efficiency over time. In accounting, asset is an economic resource, which means that anything that can be owned or controlled to produce value has a positive value for the company, it is considered an asset. The more efficient Costco is at asset management, it shows how well they use their assets to generate revenue. An increase in revenue does not mean they are making a profit, but part of the company's goal is to maximize profit. The main resources we use to evaluate resource utilization are accounts receivable, inventory and fixed assets, cost of goods sold, sales and total assets. Target is looking for ways to expand. Target's value proposition is “Expect more. You pay less.”. This has always been their proposal and it seems to work. Target seems to meet most of the consumers' expectations and offer them the best. The goal is a competitive retail market for Wal-Mart and Costco primarily because they sell 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 locations and on their online website creates millions and there are new customers who have not yet shopped at Target. Target has expanded and built more stores in the city and has opened 125-135 stores in Canada and is slowly working to expand to operating 200 or more stores over time. The one recent issue with credit card security has affected many of their sales. There was a ratio... medium paper... which means their strong sales and this indicates better liquidity. Costco's daily sales in inventory are much lower, meaning they take less time to convert their inventory into sales, while Target's daily sales in inventory are higher, meaning they take longer to generate the own inventory in sales. Costco also does better at debt collection because daily credit sales are much lower and target daily credit sales are almost 10 times higher. Cash means a lot to a business, and the ability to collect cash faster than the competition gives them more options. Costco's asset turnover is higher which means how many times Costco sells or invoices its assets and this is a sign of high efficiency. Costco is known for being efficient internally and externally. Costco takes over by using its own resources to generate sales.