Walgreens vs$.$ CVS financial analysis:

$1.$ Calculate the following ratios and fill in the worksheet for ratios. You must show your work.

LIQUIDITY RATIOS:

A$.$ Net working capital for Walgreens

Net working capital for CVS

Analysis: What do the results of this calculation mean in the context of Walgreens? In the context of CVS$?$ Compare the two $-$ why are they different? Which is better or worse?

Must be at least four sentences for the above analysis.

B$.$ Current ratio for Walgreens

Current ratio for CVS

What does the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

C$.$ Quick ratio for Walgreens

Quick ratio for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

PROFITABILITY CALCULATIONS:

D$.$ Gross profit $ and gross profit $\%$ for Walgreens

Gross profit $ and gross profit $\%$ for CVS

What do the results of this calculation mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

SOLVENCY RATIOS

E$.$ Debt ratio for Walgreens

Debt ratio for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

ASSET MANAGEMENT RATIOS

F$.$ Accounts receivable turnover ratio for Walgreens

Accounts receivable turnover ratio for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

G$.$ Inventory turnover ratio for Walgreens

Inventory turnover ratio for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

MARKET ANALYSIS RATIOS

H$.$ Earnings per share for Walgreens

Earnings per share for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

I. Return on Equity for Walgreens

Return on Equity for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

J$.$ Market Cap for Walgreens

Market Cap for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

I. Free Cash Flow for Walgreens

Free Cash Flow for CVS

What do the results of this ratio mean in the context of Walgreens? How about CVS$?$ Compare the two $-$ why are they different $($be as specific as possible$).$

Ratios:

Walgreens $8/31/20$

CVS $12/31/19$

EXPLAIN

A

Net Working Capital

B

Current ratio

C

Quick ratio

D

Gross Profit $($$ and $\%)$

E

Debt ratio

F

Accounts Receivable Turnover

G

Inventory Turnover

H

EPS

I

ROE

J

Market cap

K

Free Cash Flow

$2.$ Using Walgreens financials, calculate a horizontal analysis $($$ and $\%)$ on the income statement including gross profit $($you will have to calculate$).$ I recommend using EXCEL spreadsheet to do this question.

$2$a$.$ Using Walgreens financials, then do the vertical analysis for the balance sheet for $2018$ and $2017).$ I recommend using EXCEL spreadsheet to do this question.

$2$b$.$ What do you notice about the change from year to year on income statement and the change in the balances compared to the prior year? Be as specific as possible.

$3.$ Which company would you invest in$,$ Walgreens or CVS$,$ based on the financial statement analysis? Give me at least two sentences on how much and why.