Stock Analysis on Net
Stock Analysis on Net
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CVS Health Corp. (NYSE:CVS)

Analysis of Investments

Advanced level

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

CVS Health Corp., adjustment to net income (loss) attributable to CVS Health

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (loss) attributable to CVS Health (as reported) 6,634  (594) 6,622  5,317  5,237 
Add: Net unrealized investment gains (losses) 677  97  —  —  — 
Net income (loss) attributable to CVS Health (adjusted) 7,311  (497) 6,622  5,317  5,237 

Based on: 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), 10-K (filing date: 2016-02-09).

Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

CVS Health Corp., adjusted profitability ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin 2.59% -0.31% 3.58% 3.00% 3.42%
Adjusted net profit margin 2.86% -0.26% 3.58% 3.00% 3.42%
Return on Equity (ROE)
Reported ROE 10.39% -1.02% 17.57% 14.44% 14.08%
Adjusted ROE 11.45% -0.85% 17.57% 14.44% 14.08%
Return on Assets (ROA)
Reported ROA 2.98% -0.30% 6.96% 5.63% 5.59%
Adjusted ROA 3.29% -0.25% 6.96% 5.63% 5.59%

Based on: 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), 10-K (filing date: 2016-02-09).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. CVS Health Corp.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. CVS Health Corp.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. CVS Health Corp.’s adjusted ROA deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

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

Adjusted Net Profit Margin

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to CVS Health 6,634  (594) 6,622  5,317  5,237 
Revenues from customers 255,765  193,919  184,765  177,526  153,290 
Profitability Ratio
Net profit margin1 2.59% -0.31% 3.58% 3.00% 3.42%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to CVS Health 7,311  (497) 6,622  5,317  5,237 
Revenues from customers 255,765  193,919  184,765  177,526  153,290 
Profitability Ratio
Adjusted net profit margin2 2.86% -0.26% 3.58% 3.00% 3.42%

Based on: 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), 10-K (filing date: 2016-02-09).

2019 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to CVS Health ÷ Revenues from customers
= 100 × 6,634 ÷ 255,765 = 2.59%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to CVS Health ÷ Revenues from customers
= 100 × 7,311 ÷ 255,765 = 2.86%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. CVS Health Corp.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Adjusted Return on Equity (ROE)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to CVS Health 6,634  (594) 6,622  5,317  5,237 
Total CVS Health shareholders’ equity 63,864  58,225  37,691  36,830  37,196 
Profitability Ratio
ROE1 10.39% -1.02% 17.57% 14.44% 14.08%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to CVS Health 7,311  (497) 6,622  5,317  5,237 
Total CVS Health shareholders’ equity 63,864  58,225  37,691  36,830  37,196 
Profitability Ratio
Adjusted ROE2 11.45% -0.85% 17.57% 14.44% 14.08%

Based on: 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), 10-K (filing date: 2016-02-09).

2019 Calculations

1 ROE = 100 × Net income (loss) attributable to CVS Health ÷ Total CVS Health shareholders’ equity
= 100 × 6,634 ÷ 63,864 = 10.39%

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to CVS Health ÷ Total CVS Health shareholders’ equity
= 100 × 7,311 ÷ 63,864 = 11.45%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. CVS Health Corp.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Adjusted Return on Assets (ROA)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to CVS Health 6,634  (594) 6,622  5,317  5,237 
Total assets 222,449  196,456  95,131  94,462  93,657 
Profitability Ratio
ROA1 2.98% -0.30% 6.96% 5.63% 5.59%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to CVS Health 7,311  (497) 6,622  5,317  5,237 
Total assets 222,449  196,456  95,131  94,462  93,657 
Profitability Ratio
Adjusted ROA2 3.29% -0.25% 6.96% 5.63% 5.59%

Based on: 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), 10-K (filing date: 2016-02-09).

2019 Calculations

1 ROA = 100 × Net income (loss) attributable to CVS Health ÷ Total assets
= 100 × 6,634 ÷ 222,449 = 2.98%

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to CVS Health ÷ Total assets
= 100 × 7,311 ÷ 222,449 = 3.29%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. CVS Health Corp.’s adjusted ROA deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.