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Compute, Disaggregate, and Interpret Competitors' Rates of Return Selected balance sheet and income statement information for the drug retailers CVS Health Corporation and Walgreen Co.
Compute, Disaggregate, and Interpret Competitors' Rates of Return Selected balance sheet and income statement information for the drug retailers CVS Health Corporation and Walgreen Co. follows. Assume tax rate of 35%. $ ($ millions) CVS Health Walgreen Sales revenue-2014 $114,100 $78,184 Interest expense-2014 89 Net income-2014 3,357 2,514 Total assets-2014 62,543 26,454 Total assets-2013 60,169 24,275 Stockholders' equity-2014 38,051 14,847 Stockholders' equity-2013 37,700 14,400 588 a. Compute the 2014 return on assets (ROA) for each company. (Round your answers to one decimal place.) CVS Health Walgreen ROA % % b. Disaggregate ROA into profit margin (PM) and asset turnover (AT) for each company. (Round your answers to one decimal place.) CVS Health Walgreen PM % % AT c. Compute the 2014 return on equity (ROE) and return on financial leverage (ROFL) for each company. (Round your answers to one decimal place.) CVS Health Walgreen ROE % ROFL % % %
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