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

CVS Health Corp. (NYSE:CVS)

Return on Capital (ROC)

Advanced level

Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.


Return on Invested Capital (ROIC)

CVS Health Corp., ROIC calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 8,359  2,317  6,805  7,037  6,346 
Invested capital2 140,079  138,869  84,329  85,284  85,571 
Performance Ratio
ROIC3 5.97% 1.67% 8.07% 8.25% 7.42%

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).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 8,359 ÷ 140,079 = 5.97%

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. CVS Health Corp.’s ROIC deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Decomposition of ROIC

CVS Health Corp., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2019 5.97% = 4.69% × 1.83 × 69.67%
Dec 31, 2018 1.67% = 2.59% × 1.40 × 46.20%
Dec 31, 2017 8.07% = 5.80% × 2.19 × 63.54%
Dec 31, 2016 8.25% = 6.31% × 2.08 × 62.79%
Dec 31, 2015 7.42% = 7.01% × 1.79 × 59.07%

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).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2019 year is the increase in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

CVS Health Corp., OPM calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 8,359  2,317  6,805  7,037  6,346 
Add: Cash operating taxes2 3,638  2,698  3,905  4,170  4,398 
Net operating profit before taxes (NOPBT) 11,997  5,015  10,710  11,207  10,744 
 
Revenues from customers 255,765  193,919  184,765  177,526  153,290 
Profitability Ratio
OPM3 4.69% 2.59% 5.80% 6.31% 7.01%

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).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Revenues from customers
= 100 × 11,997 ÷ 255,765 = 4.69%

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. CVS Health Corp.’s OPM deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Turnover of Capital (TO)

CVS Health Corp., TO calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Revenues from customers 255,765  193,919  184,765  177,526  153,290 
Invested capital1 140,079  138,869  84,329  85,284  85,571 
Efficiency Ratio
TO2 1.83 1.40 2.19 2.08 1.79

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).

1 Invested capital. See details »

2 2019 Calculation
TO = Revenues from customers ÷ Invested capital
= 255,765 ÷ 140,079 = 1.83

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. CVS Health Corp.’s TO deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Effective Cash Tax Rate (CTR)

CVS Health Corp., CTR calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 8,359  2,317  6,805  7,037  6,346 
Add: Cash operating taxes2 3,638  2,698  3,905  4,170  4,398 
Net operating profit before taxes (NOPBT) 11,997  5,015  10,710  11,207  10,744 
Tax Rate
CTR3 30.33% 53.80% 36.46% 37.21% 40.93%

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).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 3,638 ÷ 11,997 = 30.33%

Tax rate Description The company
CTR Effective cash tax rate on operating income. CVS Health Corp.’s CTR increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.