CVS vs Rite Aid Financials Comparisons

The industry is involved in technological advancements and uses innovation research to deal with the complex demands that are associated with healthcare. The world pharmaceutical market by the year 2020 is expected to grow by 4. 9 per cent and hit $1. 3 trillion. The United States Pharmaceutical market on the other hand is expected to grow to $320 billion by the same year while Japanese market which is the third largest market will grow by 3 per cent, (Harrop and Holland 2009). The industry in United States enjoys an annual growth of 2. 6 per cent and employs more than 700,000 employees within its 57,521 businesses which are associated with it. CVS Overview CVS Health Corporation was started in the year 1996 together with its many subsidiaries and it became an integrated pharmacy healthcare company.

Its main operations are carried out through a number of segments which include the Omnicare Inc. and Omnicare’s long term care operations. Through its retail pharmacies, the company is the leading benefits manager with over 65 million plan members. The corporation is known for its ability to enable people and communities to manage health in a better way. Its products are a break through due to its unique programs which enable clients to control costs for the customers. CVS financials indicate growth in business with its net revenues in the year 2017 increasing by 4. 1 per cent from the previous year 2016. 92% Gross Interest Expense 1,071 1,093 873 Interest Capitalized 8 13 12 Pretax Income 8,268 8,637 8,616 Pretax Income Growth -4. 22% Pretax Margin 4. 47% - - Income Tax 1,637 3,317 3,386 Income Tax - Current Domestic 3,058 3,314 3,620 Income Tax - Deferred Domestic (1,421) 3 (234) Other After Tax Income (Expense) (24) (27) (26) Consolidated Net Income 6,607 5,293 5,204 Minority Interest Expense 1 2 2 Net Income 6,606 5,291 5,202 Net Income Growth 24.

43% Net Margin 3. 58% - - Extraordinaries & Discontinued Operations (8) (1) 9 Extra Items & Gain/Loss Sale Of Assets - - - Discontinued Operations (8) (1) 9 Net Income After Extraordinaries 6,614 5,292 5,193 Net Income Available to Common 6,598 5,290 5,211 EPS (Basic) 6. There were other minority interests that occur due to an activity of the company that is not in line with its main activity and in CVS they stood at $1 million and when they are subtracted from the Net income become $6,606 million. Subtracting the extraordinary and discontinued operations which are $16 million the net income after extra ordinaries becomes $6,614 million. The net income available to the common is $6,598 million while earnings per share both the basic and diluted were obtained by dividing the earnings by the total outstanding shares in the balance sheet.

When the earnings per share were added to the Net income available to the common shareholders the earnings before interest, taxes, depreciation and amortization for CVS Corporation were $12,504 million. The EBITDA declined from the previous year by 4. The CVS cash and short term investments were $1807 million, the total accounts receivables which are the amount the creditors owe CVS stood at $13,181 after subtracting bad debts which was $307 million. The total stock or inventories and other current assets are added to the total accounts receivables to have the total current assets as $31,229 million. Next the fixed assets are calculated, buildings, machinery, equipment, Plant, investments, Goodwill, and other intangible assets are added to a total of $ 95,131million of assets. Asset growth for CVS Corporation was at 0.

71 per cent which was a good indication of good business Liabilities and Shareholders’ Equity Short Term Liabilities 2017 2016 2015 ST Debt & Current Portion LT Debt 4,821 1,916 1,197 Short Term Debt 1,276 1,874 - Current Portion of Long Term Debt 3,545 42 1,197 Accounts Payable 19,218 17,397 15,143 Accounts Payable Growth 10. 24% Accumulated Minority Interest 4 4 46 Total Equity 37,695 36,834 37,242 Liabilities & Shareholders' Equity 95,131 94,462 92,437 Source: Wall Street Journal The balance sheet continues to the liabilities of the CVS Corporation where the short term liabilities and the long term debt are calculated. The short term and the current portion of long the term debts total are $4821 million and upon adding to the accounts payable which is the amount CVS owes the creditors the total current liabilities are $30,648 million. The long term debt stands at $22,181 and upon subtracting the capitalized lease obligations the non-convertible debt stood at $21,585.

Upon adding the non-convertible debt to the deferred taxes and other liabilities the total liabilities is $57,436 million after adding current liabilities and long term liabilities. Common equity is usually all the amount of money the common shareholders have invested in an organization. The total of working capital, receivables, inventories, other accruals and other assets is $2542 million which is subtracted from the sum of accounts payable ($ 1,710) and funds from operations ($8,423 million) to $8,007 million. Investing Activities All values USD Millions. 2017 2016 2015 Capital Expenditures (1,918) (2,224) (2,367) Capital Expenditures (Fixed Assets) (1,918) (2,224) (2,367) Capital Expenditures Growth 13. 81% Capital Expenditures / Sales -1. 54% Net Assets from Acquisitions (1,287) (578) (11,475) Sale of Fixed Assets & Businesses 298 267 446 Purchase/Sale of Investments (25) 26 (24) Purchase of Investments (86) (65) (267) Sale/Maturity of Investments 61 91 243 Net Investing Cash Flow (2,932) (2,509) (13,420) Net Investing Cash Flow Growth -16.

The common dividends $2,049 million were added to the change in capital stock and changes in current debt to $6,679 million and upon adding other uses the net financing cash flow is $6,751 million. Financial Ratios FINANCIAL DIAGONISTIC CATEGORIES CVS CORPORATION RITE AID CORPORATION INDUSTRY Liquidity of short term assets Current ratio-1. 018 Cash ratio-0. 051 Quick ratio-0. 519 Current ratio-1. 00 Debt ratio -0. 354 Debt-equity ratio-0. 9573 Times Interest earned-6. 35 Profitability Profit margin -0. 03575 Return on Assets-0. 017 Total asset turnover - 2. 87 Inventory turnover measures -9. 06 Accounts receivable turnover 19. 48 Total asset turnover -1. 85 Inventory turnover measures -17. 3344 Sources: https://www. macrotrends. net/stocks/charts/RAD/rite-aid/financial-ratios https://quotes. wsj. com/CVS/financials/annual/cash-flow https://www. 03575 and when compared to the rival Rite Aid Corporation 0. 022 while the industry profit margin is 0.

Thus, overall CVS Corporation is operating at par with the industry and even a rival such as Rite Aid. Therefore I would consider CVS a good sell corporation since by improving management then it can improve the ration. Debt is an important aspect for any business and before purchase or selling the liabilities of an organization are important. 6644) which is 66. 44% while that of CVS corporation (0. 17526) which is 17. 52% shows Rite Aid is a better company to invest in but CVS is at par with the industry whose ROE is at 0. 1201 which is 12. 3 per cent in the year 2017indicating the improvement the company is going through for the investors despite the decrease in the net revenues in the last quarter of the year 2017.

CVS has not been performing well as shown it is beaten by Rite Aid in attracting investors especially due to the concerns over low drug prices and the increasing competition in retail. Despite these pressures the company could experience a big change by the year 2020 since using the industry forecasts the company is trading shares at 16. 3 against 17. 1 for the industry. com/CVS/financials/annual/cash-flow Harrop, P. , Das, R. , & Holland, G. RFID for Healthcare and Pharmaceuticals 2008-2018. In Proc. investing. com/equities/rite-aid-corp-ratios Rohr-Kirchgraber, T. (2016, February 12). Here's how the proposed CVS-Aetna merger could increase costs, restrict access. Retrieved from https://www. M.  Financial reporting and statement analysis: A strategic perspective. South-Western Pub. White, G. L. A. T. I. E. , & Abelson, R.