Question
Describe the results of the ratio analysis Walgreens boot alliance and CVS from 2016 to 2020 focusing on the key ratios. A good way to
Describe the results of the ratio analysis Walgreens boot alliance and CVS from 2016 to 2020 focusing on the key ratios. A good way to do this is using graphs but I leave it up to each team to determine how they feel they can most effectively show these. Focus on trends, which company is performing stronger than the other, etc. Obviously the ratios need to be calculated correctly and equally important is your analysis of how you interpret these trends. In other words, what conclusions can you draw from them. To repeat what I stated in the project instructions, I do not want this to simply be a regurgitation of the ratio numbers but rather what did you see in the results that you liked or didnt like
Overall Balance sheet efficiency:
The balance sheet efficiency is measured by the time tied up in inventory and receivables. The lower the time in each of these leads to a company with greater efficiency.
| Walgreens Boots Alliance | |||||
| Year | 2016 | 2017 | 2018 | 2019 | 2020 |
| Average Accounts Receivable | $6,554.50 | $6,394 | $6,551 | $6,900 | $7,179 |
| Average Inventory | $8,817 | $8,928 | $9,232 | $9,449 | $9,392 |
| Sales | $117,351 | $118,214 | $131,537 | $136,866 | $139,537 |
| Cost of Sales | $87,477 | $89,052 | $100,745 | $106,790 | $111,520 |
| Days of Sales Outstanding | 20.39 | 19.74 | 18.18 | 18.40 | 18.78 |
| Days of Inventory Outstanding | 36.79 | 36.59 | 33.45 | 32.30 | 30.74 |
| CVS | |||||
| Year | 2016 | 2017 | 2018 | 2019 | 2020 |
| Accounts Receivable | $12,164 | $13,181 | $17,631 | $19,617 | $21,742 |
| Average Inventory | $14,381 | $15,028 | $15,873 | $16,983 | $18,006 |
| Net Sales | $177,526 | $184,765 | $194,579 | $256,776 | $268,706 |
| COGS | $148,669 | $156,220 | $190,558 | $244,789 | $254,795 |
| Days of Sales Outstanding | 25.01 | 26.04 | 33.07 | 27.89 | 29.53 |
| Days of Inventory Outstanding | 35.31 | 35.11 | 30.40 | 25.32 | 25.79 |
Return on investment (ROI) performance:
Return on investment (ROI) is a way to tell the profitability of an investment. ROI is a regularly used calculation to see the return/profit from an investment relative to the investment cost. If the ROI calculation returns a positive value then the investment will yield a worthy return. If the ROI value is negative then the investment will lose money.
Return on Investment = Income Generated/ 2-point Average Total Assets
Return on Equity = Income Generated/ 2-point Average Stockholders Equity
| Walgreens Boots Alliance | |||||
| Year | 2016 | 2017 | 2018 | 2019 | 2020 |
| Income | $4,191 | $4,101 | $5,024 | $3,982 | $456 |
| Total Assets | $72,688 | $66,009 | $68,124 | $76,598 | $87,174 |
| Average total Assets | $70,735 | $69,349 | $67,067 | $72,361 | $81,886 |
| Stockholders Equity | $30,281 | $28,274 | $26,689 | $67,598 | $87,174 |
| Average Stockholders Equity | $30,790.5 | $29,278 | $27,482 | $47,144 | $77,386 |
| Return on Investment | 0.0592 | 0.0591 | 0.0749 | 0.0550 | 0.0056 |
| Return on Equity | 0.1361 | 0.1401 | 0.1828 | 0.0845 | 0.0059 |
| %Return on Investment | 5.92 % | 5.91 % | 7.49 % | 5.50 % | 0.55 % |
| %Return on Equity | 13.61 % | 14.01 % | 18.28 % | 8.45 % | 0.589 % |
| CVS | |||||
| Year | 2016 | 2017 | 2018 | 2019 | 2020 |
| Income | $5,319 | $6,623 | -$594 | $6,631 | $7,192 |
| Total Assets | $94,462 | $95,131 | $196,456 | $222,449 | $230,715 |
| Average total Assets | $30,100 | $94,797 | $145,794 | $209,453 | $226,582 |
| Stockholders Equity | $36,834 | $37,695 | $58,543 | $64,170 | $69,701 |
| Average Stockholders Equity | $37,018.50 | $37,265 | $48,119 | $61,357 | $66,936 |
| Return on Investment | 0.1767 | 0.0699 | -0.0041 | 0.0317 | 0.0317 |
| Return on Equity | 0.1437 | 0.1778 | -0.0123 | 0.1081 | 0.1074 |
inventories) / Current Liabilities
| Walgreens Boots Alliance | |||||
| Year | 2016 | 2017 | 2018 | 2019 | 2020 |
| Current Assets | $25,883 | $19,753 | $17,846 | $18,700 | $18,073 |
| Current Liabilities | $42,407 | $37,735 | $41,435 | $43,446 | $66,038 |
| Quick Assets (Cash & Receivables) | $16,927 | $10,854 | $8,281 | $9,367 | $8,622 |
| Inventories | $8,956 | $8,899 | $9,565 | $9,333 | $9,451 |
| Working capital | -$16,524 | -$17,982 | -$23,589 | -$24,746 | -$47,965 |
| Current Ratio | 0.6103 | 0.5235 | 0.4307 | 0.4304 | 0.2737 |
| Acid-Test Ratio | 0.3992 | 0.2876 | 0.1999 | 0.21560 | 0.1306 |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
