Stock Analysis on Net
Stock Analysis on Net

CVS Health Corp. (NYSE:CVS)

Common-Size Income Statement 

CVS Health Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Products 62.46 68.74 70.46 70.03 71.18
Premiums 33.16 27.81 26.53 26.17 25.89
Services 4.38 3.45 3.01 3.80 2.93
Revenues from customers 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of products sold -55.65 -60.88 -61.22 -60.43 -61.21
Health care costs -31.06 -24.18 -22.16 -22.09 -20.78
Cost of revenues -86.71% -85.06% -83.38% -82.52% -81.99%
Gross profit 13.29% 14.94% 16.62% 17.48% 18.01%
Net investment income 0.58 0.32 0.26 0.41 0.30
Operating expenses -11.22 -11.17 -11.88 -12.74 -13.11
Restructuring charges -0.32 -0.14 0.00 0.00 0.00
Opioid litigation charges -0.03 0.00 -1.80 0.00 0.00
Loss on assets held for sale 0.00 -0.10 -0.79 0.00 0.00
Store impairments 0.00 0.00 0.00 -0.47 0.00
Goodwill impairment 0.00 0.00 0.00 -0.15 0.00
Operating income 2.30% 3.85% 2.41% 4.54% 5.19%
Interest expense -0.80 -0.75 -0.71 -0.86 -1.09
Gain (loss) on early extinguishment of debt 0.13 0.00 0.00 -0.16 -0.54
Other income 0.03 0.02 0.05 0.06 0.08
Income before income tax provision 1.66% 3.13% 1.75% 3.58% 3.65%
Income tax provision -0.42 -0.79 -0.45 -0.87 -0.96
Income from continuing operations 1.24% 2.35% 1.29% 2.71% 2.69%
Loss from discontinued operations, net of tax 0.00 0.00 0.00 0.00 0.00
Net income 1.24% 2.35% 1.29% 2.71% 2.68%
Net (income) loss attributable to noncontrolling interests 0.01 -0.01 0.00 0.00 0.00
Net income attributable to CVS Health 1.24% 2.34% 1.29% 2.72% 2.68%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Revenue Composition Trends
Over the five-year period, the proportion of revenues derived from products has declined significantly, falling from 71.18% in 2020 to 62.46% in 2024. Conversely, premiums have increased substantially, rising from 25.89% to 33.16%, reflecting a strategic shift toward insurance-based revenue streams. Services have also grown moderately from 2.93% to 4.38%, suggesting an expanding emphasis on service offerings within the revenue mix.
Cost Structure Analysis
The cost of products sold as a percentage of revenues has decreased from -61.21% to -55.65%, indicating improved cost efficiency or changes in product pricing. However, health care costs have escalated markedly from -20.78% to -31.06%, exerting upward pressure on overall costs. Consequently, total cost of revenues has increased from -81.99% to -86.71%, reflecting heightened expenditure relative to revenue despite some cost containment in products sold.
Profitability Evolution
Gross profit margins have contracted steadily from 18.01% in 2020 to 13.29% in 2024, driven primarily by rising health care costs and overall cost of revenues. Operating expenses, excluding special charges, have shown a slight improvement, declining from -13.11% to -11.22%, indicating ongoing efforts to manage operating costs. Nonetheless, restructuring charges and litigation-related expenses appeared intermittently in 2023 and 2024, marginally impacting operating performance.
Operating Income and Other Income Impacts
Operating income as a percentage of revenues has been volatile, decreasing from 5.19% in 2020 to a low of 2.41% in 2022, rebounding to 3.85% in 2023 but falling back to 2.3% in 2024. Interest expense has trended downward modestly but remains a consistent cost burden. There have been occasional losses related to early extinguishment of debt, alongside nominal gains or losses in other income streams that have minimal effect on overall profitability.
Income Before Tax and Net Income Trends
Income before income tax provision shows a declining pattern from 3.65% in 2020 to 1.66% in 2024, with a temporary recovery in 2023. The income tax provision has decreased over time, reflecting lower profitability levels. Income from continuing operations parallels this trajectory, decreasing from 2.69% to 1.24%. Net income attributable to the company demonstrates a similar decline, maintaining around 2.7% in early years but nearly halving by 2024 to 1.24%, underscoring challenges in maintaining profitability amid rising costs and shifting revenue composition.
Additional Observations
Special charges related to opioid litigation, asset impairments, and restructuring materially affected financial results during certain years, especially in 2022 and 2023. These exceptional items contributed to periodic declines in operating income and net profitability. The net income attributable to noncontrolling interests remains negligible throughout the period, exerting minimal influence on overall earnings.