The Stock Price Of Cvs

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period. This measures how many times average inventory is "turned" or sold during a period.

The gross profit margin measures the amount of profits that a company generates from its operations without consideration of its indirect costs. Thehigher thegross profit margin, the greater the efficiency of a company’s operations (Besley & Brigham 2007). It means that the company is generating enough income to cover its operating expenses. On the contrary, a lower gross profit margin indicates that the business is not generating adequate income to cover its operating expenses.

Net Margin is the ratio of net profits to revenues of a company. It is used as an indicator of a company’s ability to control its costs and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to company with individual industries having typically expected ranges given similar constraints within the industry. For example, a retail company might be expected to have low net margins while a technology company could generate margins of 15-20% or more. Companies that increase their net margins over time generally see their share price rise over time as well as the company is increasing the rate at which it turns dollars earned into profits.

Inventory turnover measures the company’s efficiency in turning its inventory into sales. Its purpose is to measure the liquidity of the inventory (Carey, 2009)

This measures the relationship between net profits and sales of a firm. The net profit margin is indicative of management’s ability to operate the business with sufficient success not only to recover revenues of the period, the cost of merchandise or services, the expenses of operating the business and the cost of the borrowed funds, but also leave a margin of reasonable

CVS Caremark is a pharmaceutical company that is considered one of the largest suppliers of both over-the-counter and prescription medicine in the world. They’ve been named best in their industry over the past few years by Forbes magazine and continue to own one of the highest revenue marks in the country in the healthcare industry. On top of all these accolades that they have been receiving in recent years, the company is still growing at an exponential rate. On New Year’s Day in 2011, the closing stock price for CVS was $33.31. As of April 19th, 2015, the closing price according to the NYSE was at an astounding $100.39. That is over a 200% growth in

|Inventory turnover |180,000/5000 |36 |N/A |Inventory turnover is calculated to determine how quickly the inventory is used based on the services rendered.|

The inventory turnover ratio "measures the number of times on average the inventory sold during the period; computed by dividing cost of goods sold by the average inventory during the period" (Kimmel et al, 2007, p. 292). This indicates how quickly a company sells its goods and a high ratio "suggests that management is reducing the amount of inventory on hand, relative to sales" (Kimmel et al, 2007, p. 287).

In regards to current ratio we can see that CVS improved from 2009 to 2010, but in 2011 it fell once again. The higher the current ratio the more favorable it reflects on the company; in 2010 for every dollar of current liabilities the company had $1.60 of current assets to pay back its short term liabilities. Current cash debt coverage ratio demonstrates a better understanding of the company’s average day standing. Liquidity improved for CVS from 2009 to 2011.

PS: There’s no amount in accounts receivable in Kohl’s Balance sheet, so we cannot analyze the receivables turnover between two companies.

Next is Asset turnover with .55 times which is a measure of the efficiency of asset utilization. Finally the equity multiplier with 2.26 which is a measure of financial leverage of the firm. When compared to the traditional ratios we get similar results; Profit margin 25.44% (27% DuPont) versus 18.75% industry average. Asset turnover is .54 (.55 DuPont) versus .50 industry average. Equity multiplier 2.28 times (2.26 times DuPont) versus 2 times industry average. The results show that the DuPont analysis using ROE as the main determinant are very similar to the regular ratios. Furthermore the ROE of the traditional ratio is 31.32% with DuPont being 33.10% versus the industry average of 18.75% shows that the firms ROE is very robust. While the firm has some challenges with respect to liquidity and inventory management, as well as debt management it still is doing a good job with respect to its shareholders. However it could be doing a little better for the stockholders, and needs to address some of the above issues mentioned.

The Net Profit Margin in 2012 was 10.5% while in 2013 it was 66.6%. This increase in the Net Profit Margin can be attributed to the increase in net profits after taxes despite the fact that there was a slight decrease in revenues.

In 2014 they had issued over 486,000 shares where each one cost around .28 cents. “When they originally began, most of their funds came from healthcare investors and funds” (SEC, 4). In the SEC it states that they have been able to have raise over 108 million in preferred stocks, 99.9 million in cash, cash equivalents and marketable securities and have a deficit of 25.5 million. On the balance sheet for 2015 the assets of the company are $101,603 in 2014, which is an increase of 2014’s numbers of $12,529. On the S1 as of 2015 Corvus has had a total of 15,767,250 shares and common stock equivalents which has increased from the 4,196,494 from 2014. Since Corvus Pharmaceuticals recently began and offered a lot of stock options it has

Net Profit Margin- The net profit margin of 18.34 percent for 2008 indicates that 18.34 cents of net income was generated for each dollar of sales. The significant increase of 7.83 percent, from 2007’s 10.51 percent, yielded an additional $1.84 billion in profit on the company’s $23.52 billion in revenue.

Fixed asset turnover is in a decreasing trend (from 16.08 to 7.98 in last five years).This indicates the efficiency of generating sales revenue from fixed assets investment is lowering. This confirms with the decreasing asset turnover ratio mentioned above. However the ratio is still at a high level, the management should still invest in fixed asset and expand the business, but extra care should be taken to determine the amount and scale to be invested.