Cvs vs. Walgreens

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Part I Introduction and Financial Analysis Both CVS Corporation and Walgreen Company operate retail drug stores in the United States. In addition to having pharmacies and selling prescription and non-prescription drugs both retailers also sell general merchandise. This includes items like beauty and cosmetic products, convenience foods, household items and film & photofinishing services. Walgreens is the more established and older of the two companies. It was founded in 1901 and until recently it added stores from mostly internal organic growth. CVS is the newer company and started in 1963. The majority of growth at CVS has come from acquisitions of other companies like Revco, Arbor Drug, Eckerd and more recently Sav-On and Osco…show more content…
Going in the opposite direction were two liabilities. Long term debt went down from $1.91 billion during 2004FY to $1.57 billion in 2005FY while accrued expenses dropped from $1.67 billion to $1.52 billion over the same period. Both Walgreens and CVS are showing generally favorable news on their financial statements the past two fiscal years. Walgreens increase in sales and net income though not as accelerated as CVS is quite steady. Walgreens net sales have gone up nearly 13% while net income has increased about 16%. For CVS the increase has been more dramatic, net sales are up 20% between 2004 and 2005 while net income has gone up 33% during this time period. Conversely the cost of goods and general & administrative expenses are increasing faster for CVS than Walgreens. CVS cost of goods and general & administrative expenses between the two fiscal years went up 20% (over $4.5 billion in COGS, and over $1.2 billion in G&A). This compares to an 11% increase in cost of goods ($3.1 billion) and 16% increase in general & administrative expenses ($1.3 billion) for Walgreens. On total assets Walgreens is actually showing a larger percentage increase between 2004 and 2005 fiscal years than CVS. They went from $13.34 billion to $14.61 billion or a 9% increase in assets while CVS increased from $14.55 billion to $15.28 billion or a more modest jump of 5%. As far as liabilities and stockholders’ equity

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