Using the balance sheet located on page 49 http://investors.cvshealth.com/~/medi
ID: 341393 • Letter: U
Question
Using the balance sheet located on page 49 http://investors.cvshealth.com/~/media/Files/C/CVS-IR-v3/reports/annual-report-2016.pdf
1) Common size analysis is used to analyze the relative importance of each item on the balance sheet. Specific items are usually expressed as a percentage of total assets. These percentages are often compared to the percentage of previous years or to the percentages calculated for another corporation in the same industry. Complete common-size analysis for the following items for your company's balance sheet.
Current Assets
Investments
Property, Plant & Equip.
Intangible Assets
Other Assets
Total Assets
Current Liabilities
Total Liabilities
Shareholders' Equity
Current Year
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Previous Year
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2) Explain what you can infer from the common size analysis:
Current Assets
Investments
Property, Plant & Equip.
Intangible Assets
Other Assets
Total Assets
Current Liabilities
Total Liabilities
Shareholders' Equity
Current Year
___________
______________
____________
__________
_________
_____________
______________
______________
______________
Previous Year
_____________
___________
___________
__________
___________
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Explanation / Answer
CURRENT YEAR PREVIOUS YEAR Amount Percent Amount Percent Current Assets 30955 32.77% 29070 31.45% Investments 87 0.09% 88 0.10% Property, Plant & Equip. 10175 10.77% 9855 10.66% Intangible Assets 51760 54.79% 51984 56.24% Other Assets 1485 1.57% 1440 1.56% Total Assets 94462 100.00% 92437 100.00% Current Liabilities 26250 27.79% 23169 25.06% Total Liabilities 57628 61.01% 55234 59.75% Shareholders' Equity 36834 38.99% 37203 40.25% Total Liabilities and Shareholders'equity 94462 100.00% 92437 100.00% Current asset increased from 31.45% of total asset to 32.77% of total asset Short ter investment is negligible atapproximately 0.1% of total asst Property , plant & equipment increased from 10.66% of total asset to 10.77% Intangible asset is very high at around 56.24% of total asset in previous year Intangible asset slightly decreased to 54.79%of total assets in this year Current liabilities increased from 25.06% to 27.79% of total asset this year Current liabilities are less thancurrent assets in both years Total liabilities increased from59.75% of total asset to 61.01% this year Shareholders equity decreased from 40.25% of total assets to 38.99% of total asset
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