Stock Analysis on Net

CVS Health Corp. (NYSE:CVS)

Return on Capital (ROC)

Microsoft Excel

Return on Invested Capital (ROIC)

CVS Health Corp., ROIC calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 9,673 3,871 9,170 9,067 8,359
Invested capital2 134,844 123,703 130,882 136,669 140,079
Performance Ratio
ROIC3 7.17% 3.13% 7.01% 6.63% 5.97%
Benchmarks
ROIC, Competitors4
Abbott Laboratories 8.87% 10.96% 11.30% 8.01% 6.47%
Cigna Group 5.63% 8.53% 6.88% 9.84% 6.50%
Elevance Health Inc. 9.35% 10.17% 11.14% 8.67% 9.75%
Humana Inc. 9.02% 10.50% 10.35% 17.73% 16.04%
Intuitive Surgical Inc. 22.30% 22.01% 37.63% 25.62% 42.29%
Medtronic PLC 5.89% 7.02% 5.59% 6.20% 7.51%
UnitedHealth Group Inc. 14.59% 13.68% 13.51% 13.84% 13.91%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 NOPAT. See details »

2 Invested capital. See details »

3 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 9,673 ÷ 134,844 = 7.17%

4 Click competitor name to see calculations.

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. CVS Health Corp. ROIC deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Decomposition of ROIC

CVS Health Corp., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2023 7.17% = 3.82% × 2.64 × 70.93%
Dec 31, 2022 3.13% = 2.45% × 2.60 × 49.10%
Dec 31, 2021 7.01% = 4.32% × 2.22 × 72.91%
Dec 31, 2020 6.63% = 4.79% × 1.96 × 70.64%
Dec 31, 2019 5.97% = 4.69% × 1.83 × 69.67%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2023 year is the increase in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

CVS Health Corp., OPM calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 9,673 3,871 9,170 9,067 8,359
Add: Cash operating taxes2 3,965 4,013 3,407 3,769 3,638
Net operating profit before taxes (NOPBT) 13,638 7,884 12,577 12,836 11,997
 
Revenues from customers 356,623 321,629 290,912 267,908 255,765
Profitability Ratio
OPM3 3.82% 2.45% 4.32% 4.79% 4.69%
Benchmarks
OPM, Competitors4
Abbott Laboratories 16.84% 20.24% 20.37% 16.05% 14.97%
Cigna Group 3.57% 5.39% 4.69% 7.72% 5.38%
Elevance Health Inc. 5.39% 5.61% 6.54% 6.03% 6.47%
Humana Inc. 3.64% 4.33% 4.49% 6.64% 5.73%
Intuitive Surgical Inc. 28.14% 26.19% 33.56% 28.14% 34.15%
Medtronic PLC 19.63% 19.15% 16.48% 17.88% 22.11%
UnitedHealth Group Inc. 9.14% 9.13% 8.33% 9.15% 8.41%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2023 Calculation
OPM = 100 × NOPBT ÷ Revenues from customers
= 100 × 13,638 ÷ 356,623 = 3.82%

4 Click competitor name to see calculations.

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. CVS Health Corp. OPM deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

Turnover of Capital (TO)

CVS Health Corp., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Revenues from customers 356,623 321,629 290,912 267,908 255,765
Invested capital1 134,844 123,703 130,882 136,669 140,079
Efficiency Ratio
TO2 2.64 2.60 2.22 1.96 1.83
Benchmarks
TO, Competitors3
Abbott Laboratories 0.67 0.71 0.69 0.57 0.55
Cigna Group 2.26 2.09 1.90 1.70 1.62
Elevance Health Inc. 2.44 2.33 2.14 2.13 1.86
Humana Inc. 3.48 3.18 2.70 3.48 3.41
Intuitive Surgical Inc. 1.00 1.16 1.27 0.98 1.35
Medtronic PLC 0.44 0.46 0.42 0.41 0.42
UnitedHealth Group Inc. 2.01 1.95 2.04 1.96 2.05

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 Invested capital. See details »

2 2023 Calculation
TO = Revenues from customers ÷ Invested capital
= 356,623 ÷ 134,844 = 2.64

3 Click competitor name to see calculations.

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. CVS Health Corp. TO improved from 2021 to 2022 and from 2022 to 2023.

Effective Cash Tax Rate (CTR)

CVS Health Corp., CTR calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 9,673 3,871 9,170 9,067 8,359
Add: Cash operating taxes2 3,965 4,013 3,407 3,769 3,638
Net operating profit before taxes (NOPBT) 13,638 7,884 12,577 12,836 11,997
Tax Rate
CTR3 29.07% 50.90% 27.09% 29.36% 30.33%
Benchmarks
CTR, Competitors4
Abbott Laboratories 21.67% 23.97% 20.05% 12.92% 21.15%
Cigna Group 30.27% 24.44% 23.01% 24.93% 25.68%
Elevance Health Inc. 28.75% 22.11% 20.37% 32.42% 18.95%
Humana Inc. 28.91% 23.74% 14.62% 23.28% 17.80%
Intuitive Surgical Inc. 20.94% 27.40% 11.76% 6.67% 8.23%
Medtronic PLC 32.28% 19.53% 18.59% 14.72% 19.30%
UnitedHealth Group Inc. 20.64% 23.25% 20.32% 22.88% 19.29%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 3,965 ÷ 13,638 = 29.07%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. CVS Health Corp. CTR increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.