Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).

Current Valuation Ratios
Historical Valuation Ratios (Summary)
Price to Earnings (P/E)
Price to Operating Profit (P/OP)
Price to Sales (P/S)
Price to Book Value (P/BV)

McKesson Corp., current price multiples

	McKesson Corp.		Abbott Laboratories	CVS Health Corp.	Elevance Health Inc.	Intuitive Surgical Inc.	Medtronic PLC	UnitedHealth Group Inc.
Selected Financial Data
Current share price (P)
No. shares of common stock outstanding
Growth rate (g)

Earnings per share (EPS)
Next year expected EPS
Operating profit per share
Sales per share
Book value per share (BVPS)
Valuation Ratios (Price Multiples)
Price to earnings (P/E)
Price to next year expected earnings
Price-earnings-growth (PEG)
Price to operating profit (P/OP)
Price to sales (P/S)
Price to book value (P/BV)

Based on: 10-K (reporting date: 2016-03-31).

If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.

McKesson Corp., historical price multiples

		Mar 31, 2016	Mar 31, 2015	Mar 31, 2014	Mar 31, 2013	Mar 31, 2012	Mar 31, 2011
	Price to earnings (P/E)
	Price to operating profit (P/OP)
	Price to sales (P/S)
	Price to book value (P/BV)

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Price to earnings (P/E) ratio: The P/E ratio showed variability over the six-year period. It declined from 17.38 in 2011 to 15.13 in 2012, followed by an increase to 18.4 in 2013. A significant rise occurred in 2014 and 2015, peaking at 32.53 and 36.01 respectively, before dropping sharply to 17.21 in 2016. This indicates fluctuating investor sentiment and earnings performance, with a notable peak mid-period and a reversion closer to initial levels by 2016.
Price to operating profit (P/OP) ratio: The P/OP ratio followed a pattern similar to the P/E ratio. Beginning at 11.47 in 2011, it decreased to 9.88 in 2012, then gradually increased to 10.63 in 2013. A marked escalation occurred in 2014 and 2015, reaching 17.36 and 17.91 respectively, before declining to 10.96 in 2016. This suggests fluctuating market valuation relative to operating profitability, with high valuations in 2014 and 2015 that subsequently moderated.
Price to sales (P/S) ratio: The P/S ratio remained relatively stable but showed an upward trend from 0.19 in 2011 to 0.3 in both 2014 and 2015. It decreased back to 0.2 in 2016. The modest rise in 2014 and 2015 points to increased valuation of sales during those years, followed by a partial reversal.
Price to book value (P/BV) ratio: The P/BV ratio exhibited a consistent increase from 2.89 in 2011 to a peak of 6.64 in 2015, indicating growing market confidence in the company's net asset value over this span. However, in 2016, the ratio declined to 4.35, suggesting a moderation in valuation relative to book value after a period of strong growth.

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McKesson Corp., historical P/E calculation, comparison to benchmarks

		Mar 31, 2016	Mar 31, 2015	Mar 31, 2014	Mar 31, 2013	Mar 31, 2012	Mar 31, 2011
	No. shares of common stock outstanding¹
	Selected Financial Data (US$)
	Net income attributable to McKesson Corporation (in millions)
	Earnings per share (EPS)²
	Share price^1, 3
	Valuation Ratio
	P/E ratio⁴
	Benchmarks
	P/E Ratio, Competitors⁵
	Abbott Laboratories
	CVS Health Corp.
	Elevance Health Inc.
	Intuitive Surgical Inc.
	Medtronic PLC
	UnitedHealth Group Inc.

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

¹ Data adjusted for splits and stock dividends.

² 2016 Calculation
EPS = Net income attributable to McKesson Corporation ÷ No. shares of common stock outstanding
= ÷ =

³ Closing price as at the filing date of McKesson Corp. Annual Report.

⁴ 2016 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =

⁵ Click competitor name to see calculations.

Share Price Trend: The share price exhibited a general upward trajectory from 2011 to 2015, increasing from $82.84 in 2011 to a peak of $229.55 in 2015. However, a significant decline occurred in 2016, with the price dropping to $172.70.
Earnings Per Share (EPS) Trend: EPS demonstrated a steady increase over the six-year period, rising from $4.77 in 2011 to $10.03 in 2016. Notably, there was a dip in 2014 to $5.48 from $5.90 in 2013, followed by a recovery and sharp growth in 2015 and 2016.
Price-to-Earnings (P/E) Ratio Analysis: The P/E ratio fluctuated considerably. It started at 17.38 in 2011, declined to 15.13 in 2012, then rose to a peak of 36.01 in 2015, before sharply declining to 17.21 in 2016. This pattern indicates market valuation changes relative to earnings, with 2015 representing a period of high valuation and 2016 showing a realignment closer to historical levels.
Overall Insights: The data indicate that while the company’s profitability, as reflected in EPS, consistently improved over the years, the market valuation exhibited greater volatility. The steep increase in share price and P/E ratio between 2013 and 2015 suggests elevated investor confidence or market speculation during that period. The subsequent correction in 2016 may reflect market adjustments to the rapid price appreciation despite strong earnings growth.

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McKesson Corp., historical P/OP calculation, comparison to benchmarks

		Mar 31, 2016	Mar 31, 2015	Mar 31, 2014	Mar 31, 2013	Mar 31, 2012	Mar 31, 2011
	No. shares of common stock outstanding¹
	Selected Financial Data (US$)
	Operating income (in millions)
	Operating profit per share²
	Share price^1, 3
	Valuation Ratio
	P/OP ratio⁴
	Benchmarks
	P/OP Ratio, Competitors⁵
	Abbott Laboratories
	CVS Health Corp.
	Elevance Health Inc.
	Intuitive Surgical Inc.
	Medtronic PLC
	UnitedHealth Group Inc.

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

¹ Data adjusted for splits and stock dividends.

² 2016 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =

³ Closing price as at the filing date of McKesson Corp. Annual Report.

⁴ 2016 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =

⁵ Click competitor name to see calculations.

Share Price: The share price exhibited an upward trend from 2011 to 2015, starting at $82.84 in 2011 and reaching a peak of $229.55 in 2015. In 2016, however, the share price declined significantly to $172.70, representing a notable decrease from the previous year’s high.
Operating Profit per Share: Operating profit per share showed consistent growth throughout the period. The value increased steadily from $7.22 in 2011 to $15.75 in 2016, more than doubling over the six-year span. The most substantial annual increases occurred between 2014 and 2015, and again between 2015 and 2016.
Price-to-Operating Profit Ratio (P/OP): The P/OP ratio exhibited variability over the years. It decreased from 11.47 in 2011 to 9.88 in 2012, then slightly rose to 10.63 in 2013. A marked increase occurred in 2014 and 2015, reaching 17.36 and 17.91 respectively, indicating a higher market valuation relative to operating profit. In 2016, the ratio declined sharply to 10.96, suggesting a reset in valuation reflecting the decreased share price despite continued profit growth.
Overall Insights: The data illustrates robust operational performance with steadily increasing operating profit per share. The share price generally reflected this growth but displayed heightened volatility in the latter years, peaking in 2015 before a substantial correction in 2016. The P/OP ratio’s fluctuations suggest changes in market sentiment or valuation expectations, peaking alongside the share price in 2015 and normalizing in 2016.

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McKesson Corp., historical P/S calculation, comparison to benchmarks

		Mar 31, 2016	Mar 31, 2015	Mar 31, 2014	Mar 31, 2013	Mar 31, 2012	Mar 31, 2011
	No. shares of common stock outstanding¹
	Selected Financial Data (US$)
	Revenues (in millions)
	Sales per share²
	Share price^1, 3
	Valuation Ratio
	P/S ratio⁴
	Benchmarks
	P/S Ratio, Competitors⁵
	Abbott Laboratories
	CVS Health Corp.
	Elevance Health Inc.
	Intuitive Surgical Inc.
	Medtronic PLC
	UnitedHealth Group Inc.

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

¹ Data adjusted for splits and stock dividends.

² 2016 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= ÷ =

³ Closing price as at the filing date of McKesson Corp. Annual Report.

⁴ 2016 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =

⁵ Click competitor name to see calculations.

Share Price: The share price demonstrated a general upward trend from 2011 to 2015, increasing from $82.84 to a peak of $229.55. However, in 2016, the share price declined to $172.70, representing a significant drop after several years of growth.
Sales per Share: Sales per share showed consistent growth throughout the entire period, rising steadily from $444.57 in 2011 to $848.30 in 2016. This indicates continuous expansion in sales relative to the number of shares outstanding.
Price-to-Sales Ratio (P/S): The P/S ratio fluctuated within a narrow band, starting at 0.19 in 2011 and declining slightly to 0.17 in 2012. It then increased to 0.20 in 2013 and reached 0.30 in both 2014 and 2015, followed by a decrease to 0.20 in 2016. This pattern suggests that while the stock price increased notably, the market’s valuation relative to sales experienced some variability, peaking before declining in the final year observed.
Summary: Overall, the data reflects strong growth in sales per share across all years, which is a positive indicator of operational expansion. The share price mirrored this trend with substantial gains until 2015, but the notable decrease in 2016 implies a market revaluation or external factors impacting investor sentiment. The P/S ratio’s movement reinforces this interpretation, highlighting a peak in valuation multiples followed by a reduction, possibly indicating concerns about sustaining the growth trajectory or broader market conditions affecting valuation.

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McKesson Corp., historical P/BV calculation, comparison to benchmarks

		Mar 31, 2016	Mar 31, 2015	Mar 31, 2014	Mar 31, 2013	Mar 31, 2012	Mar 31, 2011
	No. shares of common stock outstanding¹
	Selected Financial Data (US$)
	Total McKesson Corporation stockholders’ equity (in millions)
	Book value per share (BVPS)²
	Share price^1, 3
	Valuation Ratio
	P/BV ratio⁴
	Benchmarks
	P/BV Ratio, Competitors⁵
	Abbott Laboratories
	CVS Health Corp.
	Elevance Health Inc.
	Intuitive Surgical Inc.
	Medtronic PLC
	UnitedHealth Group Inc.

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

¹ Data adjusted for splits and stock dividends.

² 2016 Calculation
BVPS = Total McKesson Corporation stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =

³ Closing price as at the filing date of McKesson Corp. Annual Report.

⁴ 2016 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =

⁵ Click competitor name to see calculations.

Share Price: The share price exhibited a consistent upward trend from 2011 to 2015, increasing from $82.84 to a peak of $229.55. However, in 2016, the share price declined to $172.70, representing a notable decrease from the previous year.
Book Value per Share (BVPS): The book value per share demonstrated a gradual increase over the period, rising from $28.64 in 2011 to $39.66 in 2016. There was a slight dip in 2015 to $34.55 after a steady growth trend, but the value recovered the following year.
Price-to-Book Value Ratio (P/BV): The price-to-book value ratio showed an increasing trend from 2.89 in 2011 to a peak of 6.64 in 2015, indicating a growing market valuation relative to the company’s book value. In 2016, this ratio decreased to 4.35, aligning with the decline in share price despite the increase in book value per share.
Overall Observations: The data suggests that the market valuation of the company increased significantly from 2011 to 2015, as reflected by rising share prices and P/BV ratios. The dip in share price and P/BV ratio in 2016 may indicate a market correction or a reassessment of the company's value despite improvements in book value per share. This divergence between share price and book value growth in the last year could warrant further investigation into external factors or company-specific events influencing investor sentiment.

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Analysis of Financial Ratios
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Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality
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Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
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McKesson Corp. (NYSE:MCK)

Common Stock Valuation Ratios (Price Multiples)

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Current Valuation Ratios

Historical Valuation Ratios (Summary)

Price to Earnings (P/E)

Price to Operating Profit (P/OP)

Price to Sales (P/S)

Price to Book Value (P/BV)