Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

CVS Health Corp. (NYSE:CVS)

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Analysis of Income Taxes

Advanced level

Income Tax Expense (Benefit)

CVS Health Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Federal
State
Current
Federal
State
Deferred
Income tax provision for continuing operations

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. CVS Health Corp.’s current increased from 2018 to 2019 and from 2019 to 2020.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. CVS Health Corp.’s deferred decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Income tax provision for continuing operations Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. CVS Health Corp.’s income tax provision for continuing operations increased from 2018 to 2019 and from 2019 to 2020.

Effective Income Tax Rate (EITR)

CVS Health Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Statutory income tax rate
State income taxes, net of federal tax benefit
Health insurer fee
Basis difference upon disposition of subsidiary
Other
Effective income tax rate, before effect of the Tax Cuts and Jobs Act and goodwill impairments
Effect of the Tax Cuts and Jobs Act
Goodwill impairments
Effective income tax rate

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

Item Description The company
Effective income tax rate, before effect of the Tax Cuts and Jobs Act and goodwill impairments Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

Components of Deferred Tax Assets and Liabilities

CVS Health Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Lease and rents
Inventory
Employee benefits
Bad debts and other allowances
Retirement benefits
Net operating loss and capital loss carryforwards
Deferred income
Insurance reserves
Payroll tax deferral
Investments
Other
Deferred income tax assets, before valuation allowance
Valuation allowance
Deferred income tax assets
Retirement benefits
Investments
Lease and rents
Depreciation and amortization
Deferred income tax liabilities
Net deferred income tax assets (liabilities)

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

Item Description The company
Deferred income tax assets, before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. CVS Health Corp.’s deferred income tax assets, before valuation allowance increased from 2018 to 2019 and from 2019 to 2020.
Deferred income tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. CVS Health Corp.’s deferred income tax assets increased from 2018 to 2019 and from 2019 to 2020.
Net deferred income tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. CVS Health Corp.’s net deferred income tax assets (liabilities) increased from 2018 to 2019 and from 2019 to 2020.

Deferred Tax Assets and Liabilities, Classification

CVS Health Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Deferred income tax liabilities

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

Item Description The company
Deferred income tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. CVS Health Corp.’s deferred income tax liabilities decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

CVS Health Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Total CVS Health Shareholders’ Equity
Total CVS Health shareholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Total CVS Health shareholders’ equity (adjusted)
Adjustment to Net Income (loss) Attributable To CVS Health
Net income (loss) attributable to CVS Health (as reported)
Add: Deferred income tax expense (benefit)
Net income (loss) attributable to CVS Health (adjusted)

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).


CVS Health Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

CVS Health Corp., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. CVS Health Corp.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
CVS Health Corp.’s adjusted financial leverage ratio increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. CVS Health Corp.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. CVS Health Corp.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

CVS Health Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to CVS Health
Revenues from customers
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to CVS Health
Revenues from customers
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

2020 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to CVS Health ÷ Revenues from customers
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to CVS Health ÷ Revenues from customers
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. CVS Health Corp.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total CVS Health shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Total assets
Adjusted total CVS Health shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

2020 Calculations

1 Financial leverage = Total assets ÷ Total CVS Health shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Total assets ÷ Adjusted total CVS Health shareholders’ equity
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
CVS Health Corp.’s adjusted financial leverage ratio increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to CVS Health
Total CVS Health shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to CVS Health
Adjusted total CVS Health shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

2020 Calculations

1 ROE = 100 × Net income (loss) attributable to CVS Health ÷ Total CVS Health shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to CVS Health ÷ Adjusted total CVS Health shareholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. CVS Health Corp.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to CVS Health
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to CVS Health
Total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).

2020 Calculations

1 ROA = 100 × Net income (loss) attributable to CVS Health ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to CVS Health ÷ Total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. CVS Health Corp.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.