Financial statement analysis and common stock valuation

Aggregate Accruals

Financial reporting quality relates to the accuracy with which CVS Health Corp. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of CVS Health Corp. earnings.

• Balance-Sheet-Based Accruals Ratio
• Cash-Flow-Statement-Based Accruals Ratio

Analysis of Long-term (Investment) Activity Ratios
Quarterly Data

Measures how efficiently CVS Health Corp. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Total Asset Turnover
• Equity Turnover

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of CVS Health Corp. common stock issue as the present value of all future dividends.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• Dividend Growth Rate (g)

Income Statement
Quarterly Data

The income statement (statement of earnings) reports on the performance of CVS Health Corp., the result of its operating activities.

Analysis of Short-term (Operating) Activity Ratios

Evaluates revenues and output generated by the CVS Health Corp. assets. Operating performance ratios describe the relationship between the CVS Health Corp. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

An approach to decomposing CVS Health Corp. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• FCFE Growth Rate (g)

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of CVS Health Corp. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Common-Size Income Statement

Income statement components (revenues and expenses) shown as percentage of total sales.