The Final Paper will involve applying the concepts learned in class to an analys

Question

The Final Paper will involve applying the concepts learned in class to an analysis of a company (My company is CVS) using data from its annual report. Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report recommending whether or not to purchase the company stock.

The completed report should include:

An introduction to the company, including background information.

A financial statement review.

Pro Forma financial statements (Balance Sheet and Income Statement) for the next two fiscal years, assuming a 10% growth rate in sales and Cost of Goods Sold (COGS) for each of the next two years.

A ratio analysis for the last fiscal year using at least two ratios from each of the following categories:

Liquidity

Financial leverage

Asset management

Profitability

Market value

Explanation / Answer

Consolidated Income Statement of CVS Heath(Amt in Millions) Particulars 2015 2014 Net Revenues 153290 139367 Cost of Revenues 126762 114000 Gross Profit 26528 25367 Operating Expenses 17074 16568 Operating Profit 9454 8799 Interest Expenses 838 600 Loss on early extinguishment of Debt - 521 Income before income tax provision 8616 7678 Income tax provision 3386 3033 income from continuing operation 5230 4645 Consolidated Balance Sheet of CVS Heath(Amt in Millions) Particulars 2015 2014 Assets Cash & cash equivalents 2459 2481 Short term investments 88 34 Accounts Receivables 11888 9687 Inventories 14001 11930 Defffered Income Tax 1220 985 Other Current Assets 722 866 Total Current Assets 30378 25983 Property and equipment 9855 8843 Goodwill 38106 28142 Other Assets 15318 11219 Total Assets 93657 74187 Liabilities Accounts Payable 7490 6547 Claims 7653 5404 Accrued expenses 6829 5816 Short term debt 1197 1260 Total Current Liabilites 23169 19027 Long term debt 26306 11630 Defffered Income Tax 5437 4036 Other long term liabilities 1542 1531 Shareholders Equity 6313 6313 Retained earning 30890 31650 Total Liabilities & shareholders equity 93657 74187 Ratio Analysis 1. Liquidity a) Current Ratio Current Asset Current Liab 30378 23169 1.311149 b) Quick Ratio Quick Asset Current Liab 15157 23169 0.654193 2. Profitability a) Net Profit Ratio Net Profit Total Revenue 5230 153290 3.41% b) Gross Profit Ratio Gross Profit Total Revenue 26528 153290 17.31% 3. Asset management a) Fixed assets turnover Total Revenue Fixed Assets 15.55454 b) Working Capital turnover Total Revenue Fixed Assets Working capital=current assets - current liab 153290 7209 21.2637 4. Financial Leverage Interest Coverage Ratio EBIT Interest 10.28162

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.