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Running head: CVS ANALYSIS1Group Case Study 1 – CVSGroup 3Nathan Luck, Brooke Melton, Kristina Mills, Ulissa Morris, Tawana Pointer, William Price, KimRawlingsSeptember 22, 2017Executive SummaryThis case study provides an analysis and evaluation of the current and prospective profitability and financial status of CVS. This case study identifies and reports the financial stability through current and historical financial statements such as CVS’ income statement, balance sheet, and cash flow statement. The last three years are included in this section and the information identifies that although CVS’ net revenues have increased by about $8,000 their gross profit has remained constant. Although CVS’ total assets has grown by about $20,000, theirtotal current assets have only grown by about $4,000. Total shareholders’ equity has declined by about $3,000 and the free cash flow of CVS has decreased by about $1,400. Ratios from the last three years with analysis and deltas were obtained and reported. The findings from each report demonstrate while there has been a gradual decrease in the current ratio, it still remains strong. The quick ratio analysis shows that CVS is not capable of liquidating cash quickly to pay
CVS ANALYSIS2obligations. The profitability ratio shows that they are on the path to continued profitability with it rising from 12% to 14%. However, to keep moving to the positive side CVS will need to find more ways to use its assets effectively to create future profits. The current information shows that CVS does not have a secure and solid process to use assets efficiently. The calculations and reporting can be found in the appendices. A competitive profile matrix has been completed and reported within this case study. CVS was analyzed against its closest competitors Walgreens and Rite Aid. The results of the competitive profile matrix are that CVS does have a well-positioned stance against its competitors. Market penetration is provided through the strategic placement of stores and the availability of choices for customers. While they have a lower score on the matrix for employee dedication and customer service, they are not alone in this low score as the other two competitorsscored low as well due to the nature of the business. Research and development is an area that needs to be improved at CVS as they also scored low in this area. The BCG matrix shows that CVS is in the positive in the PSS sector and should continue to support that area. The BCG matrix also shows that RLS segment should be invested in and additional resources should be used to maintain the current positions and additional resources should be used to grow this segment. Additionally, alternative strategies are discussed in this case study. Advantages and alternatives are listed for each of these strategies. CVS should use a diversification strategy, which would offer more product and service options to customers. Customers are already visiting