Refer to the CVS annual report in the Supplement to Chapter 5 to answer the questions below. Keep in mind that every company, while following basic principles, adapts financial statements and terminology to its own special needs. Therefore, the complexity of CVS’s financial statements and the terminology in them will differ somewhat from the financial statements in the text.

1. What titles does CVS give to its four basic financial statements?

2. Prove that the accounting equations works for CVS on December 31, 2008, by finding the amounts for the following equation: Assets – Liabilities + Shareholders’ (Owner’s) Equity.

3. What were the total revenues of CVS for the year ended December 31, 2008?

4. Was CVS profitable in the year ended December 31, 2008? How much was net income (loss) in that year, and did it increase or decrease from the year ended December 29, 2007?

5. Did the company’s cash and cash equivalents increase from December 29, 2007, to December 31, 2008? If so, by how much? In what two places in the statements can this number be found or computed?

6. Did cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities increase or decrease from 2007 to 2008?

7. Who is the auditor for the company? Why is the auditor’s report that accompanies the financial statements important?