Need help in writing attached paper. The paper has to be on CVS Health.

I am also attaching the assignments from week 1 to week 5.

Thank you,

ASSIGNMENTS OF WEEK 1 TO WEEK 5 Week 1 I would like to study and prepare a financial analysis for CVS because that is where I usually pick up my prescriptions. I also select CVS because it promotes health care. Additionally, CVS provides community support through events, disaster relief, etc... What I like the most is you can shop while dropping your prescriptions. Below is a direct link to SEC 10-K report for CVS Health https://www.sec.gov/Archives/edgar/data/64803/000110465913011354/a12-28799_110k.htm CVS Health's rank #7 on the Fortune 500 http://beta.fortune.com/fortune500/cvs-health-7 Page numbers for all four required financial statements: Income Statement - Page 27 Balance Sheet - Page 27 Statement of Stockholders Equity - Page 29 Statement of Cash Flows - Page 26 o o o o Week 2 2015 Net Sales 2014 $153,290,000 2013 $139, 367.000 $126,761,000 What are the names of the assets and their values? Cash and cash equivalent Short-term investments Accounts Receivable Inventories Deferred Income Taxes Total Current Assets December 2015 December 2014 $2,459,000 $88,000,000 $11,888,000 $14,001,000 $1,220,000 $117,568,000 $2,481,000 $34,000,000 $ 9,687,000 $ 11,930,000 $985,000,000 $1,043,098,000 December 2015 December 2014 Shareholders' Equity: Common Stock 17 17 Additional paid-in capital 30,948 30,418 Accumulated equity 35,506 31,849 Treasury Stock (28,886) (24,078) Accumulated other comprehensive loss (358)__ (217)___ Total CVS Shareholders' Equity 37,227 34,989 Noncontrolling Interest 7 5 Total Shareholders' Equity 37,234 37,994 Total Liabilities and Shareholders' Equity 93,657 million 74,187 million 5: CVS Health Corporation link is:https://www.sec.gov/Archives/edgar/data/64803/000006480316000074/cvs20151231x10k.htm#s7421F983F70E52A8812DFE5B6F421C5E 6. The Net Income for 2015 SEC 10-K for CVS Health Corporation is: $5,239,000 Week 3 1. Note 1 includes accounting information. What is the fiscal year for your SEC 10-K Company? This may be June 30 each year, or it may be the Sunday closest to the last day of January, or some other description. CVS Health fiscal year is the Saturday nearest to December 31, and unless stated all years refer to their fiscal year. 2. Inventory: How is Inventory described for your SEC 10-K company? LIFO, FIFO, and/or average cost? Relate your answer to topics in our course. For CVS, inventory is described on a first-in, first-out (FIFO) basis using the retail method of accounting to determine cost of sales and inventory. 3. Income Statement: Is it a single-step or multi-step income statement? CVS Health is a multi-step income statement 4. Calculate the Gross Profit and Gross Profit Percentage for this year and last year, creating a small table, such as the following: This Year Net Sales Cost of Goods Sold Gross Profit Gross Profit Percentage Last Year $153,290 $139,367 126,762 114,000 26,528 25,367 17.30% 18.20% Week 4 1. What is the name of the auditor? Viewing their signature, what city do you see? Ernst & Young LLP Boston, Massachusetts 2. The first page of the SEC 10-K is very standard and lists two key locations. Using this information, post the state of in corporation and the city and state of the corporate headquarters for your SEC 10-K. Delaware - State of Incoporation Woonsocket, Rhode Island - State of the corporate headquarters 3.Returning to Item 8, near the auditor's report (this is the letter they sign, giving their opinion on whether the financial statements are fairly presented in adherence with U.S. GAAP), locate the letter regarding internal control. This letter is signed by the company's management. What are their names and titles? /s/ LARRY J. MERLO President and Chief Executive Officer (Principal Executive Officer) and Director /s/ DAVID M. DENTON David M. Denton Executive Vice President and Chief Financial Officer Follow is the link for CVS Health Healthhttp://investors.cvshealth.com/~/media/Files/C/CVS-IRv3/documentsov-08-2016/q3-2016-form-10-q.pdf Week 5 Reading the notes to the financial statements, as well as the balance sheet, post information about the Accounts Receivable for your company. Who owes the company money? Accounts receivable are stated net of an allowance for uncollectible accounts of $73.4 million and $53.2 million as of December 30, 2006 and December 31, 2005, respectively. The balance primarily includes amounts due from third party providers (e.g., pharmacy benefit managers, insurance companies and governmental agencies) and vendors. Search for the phrase "Bad Debts" or Allowance (for collectible accounts). When you read the balance sheet, you may see that the receivables are listed as a net of $x,xxx to show the Allowance for Bad Debts. Comment about the changes in Accounts Receivable and the Allowance for Bad Debts. Are they increasing or decreasing? How does this relate to sales (are sales increasing or decreasing)? Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Accounts receivable net in 2015 was 11,888 and 9,687 in 2014. CVS Health Corp's accounts receivables for the quarter that ended in Sep. 2016 was $13,625 Mil. It has increased In a press release done by CVS representatives, below is what was stated in regard to the increase in accounts receivable, \"Our current debt service costs associated with our increased debt levels may dampen incremental investments in our business and limit our flexibility to respond to industry changes and market conditions. In addition, our debt level and related debt service obligations could make it more difficult or expensive for us to obtain any required future financing for working capital, capital expenditures, acquisitions or other purposes. These circumstances could have a material adverse effect on our business operations and financial condition\". Retrieved from http://investors.cvshealth.com/~/media/Files/C/CVS-IR-v3/documents/09-02-2016/q42015-earnings-release.pdf Property, Plants, and Equipment / PPE (Capital Assets; Fixed Assets): Comment about PPE and accumulated depreciation. How are these values changing from year to year: PPE, Accumulated Depreciation, and Net PPE? CVS Health Corp's annual net PPE increased from Dec. 2013 ($8,615 Mil) to Dec. 2014 ($8,843 Mil) and increased from Dec. 2014 ($8,843 Mil) to Dec. 2015 ($9,855 Mil). It is evident that CVS has incurred capital expenditure in 2015. Major amount is invested in machinery, real estate and special tools. 2013 Net Property, Plant & Equipment 2014 2015 8.62B 8.84B 9.86B 17.41B 18.79B 21.04B Buildings 2.69B 2.83B 3.17B Land & Improvements 1.46B 1.51B 1.64B Computer Software and Equipment 1.52B 1.87B 2.22B Other Property, Plant & Equipment 3.32B 3.63B 4.02B Accumulated Depreciation 8.79B 9.94B 11.18B Property, Plant & Equipment - Gross A Beginner's Guide to CVS Caremark's SEC 10K History of company and non-financial information CVS Health (formerly CVS Caremark Corporation) is an American retailer and health care company that began over 50 years ago. At its opening in 1963 in Lowell, Massachusetts, CVS stood for \"Consumer Value Stores\" and primarily sold health and beauty products. Within one year the company had grown into a chain with 17 different stores and then few years later, the company's first stores launched their pharmacy departments. In 1969 CVS is bought by Melville Corporation and this launches 27 years of growth and expansion throughout the east coast and parts of the Midwest. Following the restructuring of Melville Corporation in 1996, CVS Corporation became a standalone company trading on the New York Stock Exchange under the CVS ticker. CVS Health operates over 7,700 CVS Pharmacy and Longs Drugs stores;[5] a pharmacy benefit manager, mail order and specialty pharmacies, a retail-based health clinic subsidiary, MinuteClinic; and an online pharmacy, CVS.com. On February 5, 2014, CVS Caremark announced that it would stop selling cigarettes and tobacco products in all of its CVS/pharmacy stores. On September 3. 2014, CVS Caremark announced that CVS/pharmacy had stopped the sale of cigarettes and tobacco products and had launched a comprehensive national smoking cessation program. In addition, the company announced that its corporate name had changed to CVS Health to further reflect its broader commitment to health care. \"The company is transforming itself into more of a health services provider in order to take advantage of the spike in the number of insured patients created by healthcare reform\" (Fortune, 2014). As of 2014, it ranked 35th in the Fortune Global 500 list of the world's largest companies, and 12th in the United States-only Fortune 500 (Fortune, 2014). Income statement Revenue and net income Trends, increases/ decreases, specific items that had a significant change or impact. One of the first things investors want to learn about a company are its revenues and net income. For CVS, these figures come from three reportable segments: Pharmacy Services, Retail Pharmacy, and Corporate. The Pharmacy Services business provides a full range of pharmacy benefit management services, including mail order and specialty pharmacy and infusion services, plan design and administration, formulary management, discounted drug purchase arrangements, Medicare Part D services, retail pharmacy network management services, prescription management systems, clinical services and disease management services. Their clients are primarily employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans and individuals throughout the United States. The Retail Pharmacy Segment sells prescription drugs and a wide assortment of general merchandise, including over-thecounter drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting cards and convenience foods through our CVS/pharmacy retail stores and online through CVS.com. The Retail Pharmacy Segment also provides health care services through MinuteClinic health care clinics. The MinuteClinics are staffed by nurse practitioners and physician assistants who utilize nationally recognized protocols to diagnose and treat minor health conditions, perform health screenings, monitor chronic conditions, and deliver vaccinations. The Corporate Segment provides management and administrative services to support the Company. The Corporate Segment consists of certain aspects of executive management, corporate relations, legal, compliance, human resources, corporate information technology, and finance department. Revenue, also called sales, is all the money the company has collected from sales, fees, interest, dividends, and rents for producing goods or rendering services. Revenues for 2013: $126,761 million. While there appears to be a continued growth trend in revenues from 2009 to 2013, it has slowed from almost 15% in 2012 to just under 3% in 2013. Net income is the phrase commonly used to refer to a company's profit. It represents how much money the company has left over, if any, after it's paid the costs of doing business payroll, cost of goods sold, taxes, rent, depreciation, and interest on loans (just to name a few). Net income for 2013 was $4,592 million, up almost 19% form 2012. There was a small loss in net income from 2009 to 2010, but CVS has showed continued growth since 2010. Liabilities Trends, current and long-term, notes information on specific liabilities. Liabilities are defined as an obligation that legally binds the company to settle a debt over time through the transfer of benefits such as money, goods, or services. A current liability requires the use of existing resources classified as current assets (Kieso, 2010, p. 638). CVS listed their liabilities as: Accounts payable; Claims and discounts payable; Accrued expenses; Short-term debt; Current portion of long-term debt; Long-term debt; Deferred income taxes; & Other longterm liabilities (CVS Caremark, n.d.). There was no short-term debt reported in 2013 on CVS's balance sheet, but all other current liabilities have increased from the 2012. The largest rise was in long-term debt by 8% however, their current ratio has improved from 1.43 to 1.64 as well as their acid-test ratio from .645 to .926 meaning that their assets has seen substantial growth. FIX THIS! Contingencies Identify and describe, how are they disclosed and what we can learn about them. Goals of defining and disclosing contingencies A contingency is an existing situation that may or may not occur, a condition that must be met in order for a contract to be legally binding, or circumstance involving uncertainty on the chance of a gain or loss that may be resolved in the future. Reporting of Contingencies allows the public to evaluate the company's ability to meet future earnings and goals as well as question the practicality of future investments based on the likely outcome. Reading the financial statements without these notes would leave potential investors and creditors unaware of these events and possible financial requirements that may change the value of their holdings within a specified period. Any gains/ losses and how they affect the company. CVS Caremark recorded lease guarantees as well as legal matters under note 12- commitments and contingencies. It listed 11 different legal matters that it is currently involved in, but states that they \"are subject to significant uncertainties and (they) are unable to reasonably estimate a possible loss\". Each one is described and listed under the heading \"Commitments and Contingencies- Legal Matters\" under notes on pages 82-85 of the SEC 10K. Irregular items Identify and describe (discontinued or extraordinary) Irregular items fall into one of two types, discontinued operations or extraordinary items. Discontinued operations includes the closing or disposal of one or more segments of operations within the business. The result of operations of a segment that has been or will be disposed of is reported with the gain or loss on disposal, separately from continuing operations. There was a loss from discontinued operations reported for $8,000,000 in 2013. The company sold a subsidiary, TheraCom, L.L.C. and reported the sold company's results under discontinued operations. It also maintains guarantees on store leases for the now bankrupt Linens 'n Things until the agreements have been satisfied. No extraordinary items were reported. Extraordinary items are due to an infrequent and unforeseeable or uncommon event such as an earthquake of fire. There were no extraordinary items listed on CVS's income statement. Investments and Revenue Recognition Investments Identify and explain investments. Where are they? Trends? Details in notes? Any generalization issues? Companies can have two types of investments, short-term and long-term. Short term investments are held for short periods, usually less than a year and/ or intends to convert them to cash soon; they are reported as a current asset. However, long-term investments are reported under the Investments section of the balance sheet and are held for many years. The company recognizes (reports) interest when it is earned and gains or loss only when sold. On the Statement of Cash Flows, CVS listed the following categories under investing activities: Purchases of property and equipment, Proceeds from sale-leaseback transactions, Proceeds from sale of property and equipment and other assets, Acquisitions (net of cash acquired) and other investments, Purchase of available-for-sale investments, Maturity of available-for-sale investments, and Proceeds from sale of subsidiary. They also mention on page 36 their net cash used in investing for 2012 and 2013 was 1.8 billion which is 25% less than in 2011 due to the acquisition of Universal American Corp. (a Medicare prescription drug business) (CVS Caremark, n.d.). However, there is no further explanation of their investments. Revenue Recognition Revenue recognition disclosure. Issues for company in terms of customers and sales types. CVS Caremark discloses that there are different segments used in their accounting policies. They separate the pharmacy services from the retail segment. On the retail side they recognize sales (other than prescriptions) at the time of purchase. The Pharmacy side has a few more recognition issues. \"Revenue is recognized when: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller's price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. The following revenue recognition policies have been established for the PSS: Revenues generated from prescription drugs sold by mail service dispensing pharmacies are recognized when the prescription is delivered. At the time of delivery, the PSS (Pharmacy Services Segment) has performed substantially all of its obligations under its client contracts and does not experience a significant level of returns or reshipments. Revenues generated from prescription drugs sold by third party pharmacies in the PSS's retail pharmacy network and associated administrative fees are recognized at the PSS's point-of-sale, which is when the claim is adjudicated by the PSS's online claims processing system\" (CVS Caremark, n.d.). They also account for any drug discounts, rebate, and fees earned by its clients, as well as revenues earned through insurance programs such as Medicare. Capital stock and Retained Earnings Describe common and preferred stock There are two main types of stock: Common and Preferred. Stocks represent ownership in a company and entitlements to a portion of the company's profits. One way profit is distributed to the shareholders is through dividends, which are often paid in cash from the company's earnings. Common shareholders do not have set amounts for their dividend payments where preferred holders usually have guarantees on dividend payments at a fixed rate. Lastly, Common stockholders have voting rights on the company's board of directors but preferred shareholders do not. CVS currently does not offer preferred stock. They have authorized (maximum number the company can sell) 3,200 common shares at a par value of $0.01. In 2013 CVS had issued 1680 shares, but this included 500 shares of treasury stock. Treasury shares for both types? Just like before, there are two types of treasury stock, Preferred and common. CVS has no preferred stock and therefore no preferred treasury stock. Treasury stock are shares that were once a part of the shares sold to investors but were later repurchased by the company and retired. Over the past three years CVS's Treasury stock has increased from 259 shares in 2011, to 340 in 2012, and finally up to 500 in 2013. Retained earnings What is it and how has it changed over the last two years Retained earnings is the part of net income that was not paid out in dividends, but saved by the company to be reinvested into the business or to pay debt. Over the last two years CVS's retained earnings has grown, even after increasing dividend payments, because net income has increased by over 11% in 2012 and almost 19% in 2013. This is great news for investors since a company can use retained earnings to maintain current operations, or to invest in new ventures. Generally speaking, retained earnings growth is accompanied by subsequent increases in sales and profitability. Analysis ROE, EPS, PE ratio, payout ratio 2013 2012 Industry average* a. Return on stockholder's equity 12.10% 10.26% 11.98-12.80% b. Earnings per share (EPS) 3.77 3.04 c. Price-earnings (PE) ratio 25.55 23.54 22.27-35.80 0.67-5.02 d. Payout ratio 23.89% 21.45% 18%-30% * drug stores on yahoo.finance of Rite Aid, Walgreens, Walmart, and Target http://biz.yahoo.com/p/733conameu.html a. Net income- Preferred Dividends Average common stockholder's equity 2012- 3864/37653=.1026 2013- 4592/37938= .1210 b. net income- preferred dividends Weighted # shares outstanding 2012- 3864/ 1271= 3.04 2013- 4592/ 1217= 3.77 c. market price per share earnings per share 2012- 71.57/3.04= 23.54 2013- 96.31/3.77= 25.55 d. cash dividends net income 2012- 829/3864= .2145 2013- 1097/4592= .2389 Explain what is to be learned from them. Cash Flows Operating activities Direct vs. Indirect It appears to me that CVS Caremark uses the direct method to present the net cash flows. They began the statement by stating the cash payments received and then deducting cash payments. They ended the report by including the reconciliation at the bottom of the statement of cash flows (pg. 56). Using the direct method presents investors and shareholders information on the sources of cash and the reasons for cash disbursements. If the organization has used the indirect method they would have begun with net income and then made adjustment for all noncash items. Changes (increase/ decrease) compared to industry, compared to current economic environment The largest increase was for cash receipts from customers, $114,993 million, and the prominent decrease was for cash paid for inventory and prescriptions dispensed by retail network pharmacies, $91,178 million. I did not notice any unexpected operating activities listed on the statement of cash flows. Investing and Financing Differences using IFRS? Differences: Under IFRS, one major difference in the definition of cash and cash equivalents is that bank overdrafts are considered part of cash and cash equivalents in certain situations. Under GAAP, bank overdrafts are classified as financing activities. IFRS requires that non-cash investing and financing activities be excluded from the statement of cash flows. Instead, these non-cash activities should be disclosed in the notes to the financial statements. Under GAAP, companies may present this information in the cash flow statement. One area where there can be substantive differences between IFRS and GAAP relates to. IFRS provides more alternatives for the disclosing and classification of interest, dividends, and taxes. Under GAAP these items are all reported as operating activities, except for dividends paid which are classified as a financing activity. Describe investment and any changes over last three years. Purchases of property and equipment- uses the straight-line depreciation method and includes land, building/ improvements, fixtures/ equipment, leasehold improvements, and software. Proceeds from sale-leaseback transactions- The Company finances a portion of its store development program through sale-leaseback transactions. The properties are generally sold at net book value, which generally approximates fair value, and the resulting leases generally qualify and are accounted for as operating leases. The Company does not have any retained or contingent interests in the stores and does not provide any guarantees, other than a guarantee of lease payments, in connection with the sale-leaseback transactions. Proceeds from sale-leaseback transactions totaled $600 million in 2013, $529 million in 2012 and $592 million in 2011. Proceeds from sale of property and equipment and other assets- totaled $54 million in 2014 for the sale of land, building/ improvements, fixtures/ equipment, leasehold improvements, and/or software. Acquisitions (net of cash acquired) and other investments- In January 16, 2014, the Company acquired Coram LLC (\"Coram\"), the specialty infusion services and enteral nutrition business unit of Apria Healthcare Group Inc. for approximately $2.1 billion. Coram's results of operations will be included in the Company's Pharmacy Services Segment beginning January 16, 2014. Purchase of available-for-sale investments-carried at fair value, which approximated historical cost at December 31, 2013 and 2012. Maturity of available-for-sale investments- carried at fair value, which approximated historical cost at December 31, 2013 and 2012. Proceeds from sale of subsidiary- in 2011 the company sold its TheraCom, L.L.C. (\"TheraCom\") subsidiary for a gain of $53 million. It is still paying for leases on a now bankrupt business subsidiary Linens 'n Things for a loss of $12 million in both 2012 and 2013. Over the past three years there appears to be a decline in short-term debt and an increase in paid dividends as well as the repurchase of common stock. There was a significant rise in the proceeds from exercise of stock options in 2012. Increase (decrease) in short-term debt Dividends paid Proceeds from exercise of stock options Repurchase of common stock 2013 (690) (1,097) 500 (3,976) 2012 (60) (829) 836 (4,330) 2011 450 (674) 431 (3,001) Analyze free cash flow and compare to industry Free Cash Flow= Net cash provided by operating activities- Capital expenditures- Dividends I compared CVS's free cash flow with that of three of its main competitors and found that it out preforms all three in both 2012 and 2013. This cash will allow the company to expand, develop new products, buy back stock, pay dividends, or reduce its debt. CVS *In millions 2012 2013 Net Cash-Op. Act. 6,671 5,783 Cap. Exp. (2,030) (1,984) Dividends (8,29) (1,097) Free Cash Flow 3,812 2,702 Net Cash-Op. Act. 266.5 819.6 Cap. Exp. (215) (315.8) Dividends (9.9) (10) Free Cash Flow 41.6 493.8 Net Cash-Op. Act. 4,431 4,301 Cap. Exp. (1,550) (1,212) Dividends (787) (1,040) Free Cash Flow 2,094 2,049 Net Cash-Op. Act. 5,325 6,520 Cap. Exp. (3,277) (3,453) Dividends (869) (1,006) Free Cash Flow 1,179 2,061 Rite Aid *In millions 2012 2013 Walgreens *In millions 2012 2013 Target *In millions 2012 2013 Accounting for Income taxes Disclosures, net income loss, balance sheet treatment, and notes to financial statements. Pensions/ Post retirement benefits Discuss disclosures and how they relate to the balance sheet as well as the notes to the financial statements. Risk, aggressiveness of positions taken Financial forecasts/ projections Page 1341 Conclusion Financial position of CVS compared to two-three years ago Compared to industry