Project 5 - Executive Summary The following report contains...

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Executive Summary The following report contains a complete financial analysis of CVS Corporation. CVS Corp., a subsidiary retail pharmacy division of CVS Caremark , sells prescription drugs and a wide assortment of general merchandise, including over-the counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards and convenience foods through their CVS/pharmacy and Longs Drugs retail stores and online through CVS.com. In this financial analysis, cash breakeven sales, a piece of information that determines the minimum level of sales necessary in order to break even for the period, has been computed, analyzed, and compared over a range of five years . CVS’s common size financial statements, which are statements that expressed each category by a percentage of total assets (on the balance sheet) or total sales (on the income statement), are included to allow us to compare CVS to similar firms easier. Analysis of cash flow statements and financial ratios are also included to allow comparison of other industry leaders and determine if CVS is financially healthy. Selected groups of ratios that have been analyzed include liquidity, activity, financial leverage, profitability, and cash flow. Financial forecasting requires us to prepare a ten-year financial forecast for CVS to determine if we can pinpoint problems areas or possible growth opportunities. The report concludes with a summary and findings section that also makes recommendations about possible corrective actions. The last pages contain appendices that presents the data that has been used to prepare the financial analysis for CVS Corporation. 1
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Introduction Report Intentions: The intention of this report is to convey information and financial analysis of CVS Corporation to inform investors and business of the financial health of the firm. Data from different sources has been gathered to help generate financial forecasts, budget decisions, and growth opportunities. Purpose of Study: The purpose of the study is to enable the investor or business to make an informed determination of the financial standing of CVS Corp without the parties having to research the information on their own. After reviewing the financial analysis, the individual or company should have a broad understanding of how CVS operates including, but not limited to, their investment strategy, management style, and future financial implications. Data Sources (Firm): Standard and Poor’s Research Insight; http://en.wikipedia.org/ wiki/CVS/pharmacy Data Sources (Industry): Standard and Poor’s Research Insight; http://www.marigoldtech.com/lists/sic.php?sic-code=5912 Firm Information: CVS/pharmacy (commonly called CVS) is the largest pharmacy chain in the United States, with approximately 6,900 stores across 45 states and in Puerto Rico . In addition to selling prescription drugs and general merchandise, they also 2
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This note was uploaded on 02/24/2010 for the course FINA 4310 taught by Professor Impson during the Spring '10 term at North Texas.

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Project 5 - Executive Summary The following report contains...

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