Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
CVS Health Corp., solvency ratios
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).
The solvency profile exhibits a distinct V-shaped trend in leverage ratios between 2020 and 2024, characterized by an initial deleveraging phase followed by a gradual increase in debt reliance. While the company improved its capital structure through 2022, the subsequent two years show a consistent rise in debt-to-equity and debt-to-capital metrics, indicating a shift toward higher financial leverage.
- Capital Structure and Equity Ratios
- The debt-to-equity ratio decreased from 0.93 in 2020 to a low of 0.74 in 2022, before climbing back to 0.88 by the end of 2024. When operating lease liabilities are included, the ratio remains consistently higher, peaking at 1.23 in 2020 and ending the period at 1.10. A parallel trend is observed in the debt-to-capital ratio, which bottomed at 0.42 in 2022 and rose to 0.47 by December 31, 2024, suggesting an increasing proportion of debt within the total capital mix.
- Asset-Based Leverage and Financial Multipliers
- Debt-to-assets ratios followed a similar trajectory, with the pure debt ratio reaching its lowest point of 0.23 in 2022 before ascending to 0.26 in 2024. The inclusion of operating leases elevates this figure to 0.33 as of the final reporting date. Financial leverage has shown a steady upward trajectory since 2021, rising from 3.10 to 3.35, which indicates an increased use of debt to finance assets.
- Debt Serviceability and Coverage
- Coverage ratios demonstrate significant volatility and a concerning downward trend in the most recent period. The interest coverage ratio peaked at 5.20 in 2023 but dropped sharply to 3.08 by the end of 2024, the lowest level recorded since 2022. Similarly, the fixed charge coverage ratio declined to 2.14 in 2024, representing the lowest value in the five-year analysis. This deterioration in coverage ratios suggests a reduced margin of safety for meeting fixed financial obligations relative to operating earnings.
Overall, the trajectory indicates that while the company successfully optimized its leverage mid-period, the most recent data points toward increasing solvency risk. This is evidenced by the simultaneous rise in leverage ratios and the contraction of both interest and fixed charge coverage ratios through 2024.
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Debt to Equity
CVS Health Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 2,119) | 200) | —) | —) | —) | |
| Current portion of long-term debt | 3,624) | 2,772) | 1,778) | 4,205) | 5,440) | |
| Long-term debt, excluding current portion | 60,527) | 58,638) | 50,476) | 51,971) | 59,207) | |
| Total debt | 66,270) | 61,610) | 52,254) | 56,176) | 64,647) | |
| Total CVS Health shareholders’ equity | 75,560) | 76,461) | 71,015) | 75,075) | 69,389) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.88 | 0.81 | 0.74 | 0.75 | 0.93 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Abbott Laboratories | 0.30 | 0.38 | 0.46 | 0.50 | — | |
| Elevance Health Inc. | 0.76 | 0.64 | 0.66 | 0.64 | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Medtronic PLC | 0.50 | 0.47 | 0.46 | 0.51 | — | |
| UnitedHealth Group Inc. | 0.83 | 0.70 | 0.74 | 0.64 | — | |
| Debt to Equity, Sector | ||||||
| Health Care Equipment & Services | 0.59 | 0.55 | 0.57 | 0.55 | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.87 | 0.82 | 0.72 | 0.80 | — | |
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).
1 2024 Calculation
Debt to equity = Total debt ÷ Total CVS Health shareholders’ equity
= 66,270 ÷ 75,560 = 0.88
2 Click competitor name to see calculations.
The solvency profile exhibits a fluctuating trend in leverage over the five-year period ending December 31, 2024. After an initial phase of deleveraging, a renewed increase in debt obligations has elevated the reliance on borrowed capital relative to equity.
- Total Debt Trajectory
- A downward trend in total debt was observed between 2020 and 2022, with obligations decreasing from US$ 64,647 million to US$ 52,254 million. This trend reversed in the subsequent two years, with total debt rising to US$ 61,610 million in 2023 and reaching US$ 66,270 million by the end of 2024, surpassing the initial 2020 levels.
- Shareholders' Equity Stability
- Total shareholders' equity remained relatively stable throughout the period, fluctuating within a narrow range. Equity peaked in 2023 at US$ 76,461 million and concluded the period at US$ 75,560 million in 2024, reflecting a consistent capital base despite the volatility in debt levels.
- Debt to Equity Ratio Analysis
- The debt to equity ratio mirrored the movements in total debt. The ratio improved from 0.93 in 2020 to a low of 0.74 in 2022, indicating a reduction in financial leverage. This improvement was subsequently eroded as the ratio climbed to 0.81 in 2023 and further to 0.88 in 2024, signaling a return toward the higher leverage levels observed at the start of the analysis period.
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Debt to Equity (including Operating Lease Liability)
CVS Health Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 2,119) | 200) | —) | —) | —) | |
| Current portion of long-term debt | 3,624) | 2,772) | 1,778) | 4,205) | 5,440) | |
| Long-term debt, excluding current portion | 60,527) | 58,638) | 50,476) | 51,971) | 59,207) | |
| Total debt | 66,270) | 61,610) | 52,254) | 56,176) | 64,647) | |
| Current portion of operating lease liabilities | 1,751) | 1,741) | 1,678) | 1,646) | 1,638) | |
| Long-term operating lease liabilities | 14,899) | 16,034) | 16,800) | 18,177) | 18,757) | |
| Total debt (including operating lease liability) | 82,920) | 79,385) | 70,732) | 75,999) | 85,042) | |
| Total CVS Health shareholders’ equity | 75,560) | 76,461) | 71,015) | 75,075) | 69,389) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.10 | 1.04 | 1.00 | 1.01 | 1.23 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.32 | 0.41 | 0.49 | 0.54 | — | |
| Elevance Health Inc. | 0.78 | 0.66 | 0.69 | 0.67 | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | 0.01 | — | |
| Medtronic PLC | 0.52 | 0.49 | 0.48 | 0.53 | — | |
| UnitedHealth Group Inc. | 0.88 | 0.76 | 0.80 | 0.70 | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.63 | 0.58 | 0.61 | 0.58 | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.90 | 0.85 | 0.76 | 0.83 | — | |
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).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total CVS Health shareholders’ equity
= 82,920 ÷ 75,560 = 1.10
2 Click competitor name to see calculations.
An analysis of solvency metrics reveals a fluctuating leverage profile between 2020 and 2024. After a period of deleveraging that culminated in 2022, a subsequent increase in debt obligations has shifted the capital structure toward higher leverage.
- Total Debt Trends
- Total debt, inclusive of operating lease liabilities, experienced a notable decline from US$ 85,042 million in 2020 to a period low of US$ 70,732 million in 2022. This downward trajectory reversed in 2023, with debt rising to US$ 79,385 million, and continuing upward to US$ 82,920 million by the end of 2024.
- Shareholders' Equity Stability
- Total shareholders' equity remained relatively stable throughout the observed period, fluctuating within a range of approximately US$ 69 billion to US$ 76 billion. A peak in equity was observed in 2023 at US$ 76,461 million, followed by a slight contraction to US$ 75,560 million in 2024.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio mirrors the movements in total debt, starting at 1.23 in 2020 and decreasing to 1.00 by 2022, indicating a period where debt and equity were equal. However, the ratio increased to 1.04 in 2023 and further to 1.10 in 2024, reflecting an increasing reliance on borrowed capital relative to equity holdings toward the end of the period.
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Debt to Capital
CVS Health Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 2,119) | 200) | —) | —) | —) | |
| Current portion of long-term debt | 3,624) | 2,772) | 1,778) | 4,205) | 5,440) | |
| Long-term debt, excluding current portion | 60,527) | 58,638) | 50,476) | 51,971) | 59,207) | |
| Total debt | 66,270) | 61,610) | 52,254) | 56,176) | 64,647) | |
| Total CVS Health shareholders’ equity | 75,560) | 76,461) | 71,015) | 75,075) | 69,389) | |
| Total capital | 141,830) | 138,071) | 123,269) | 131,251) | 134,036) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.47 | 0.45 | 0.42 | 0.43 | 0.48 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Abbott Laboratories | 0.23 | 0.28 | 0.31 | 0.34 | — | |
| Elevance Health Inc. | 0.43 | 0.39 | 0.40 | 0.39 | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Medtronic PLC | 0.33 | 0.32 | 0.31 | 0.34 | — | |
| UnitedHealth Group Inc. | 0.45 | 0.41 | 0.43 | 0.39 | — | |
| Debt to Capital, Sector | ||||||
| Health Care Equipment & Services | 0.37 | 0.35 | 0.36 | 0.35 | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.47 | 0.45 | 0.42 | 0.44 | — | |
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).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 66,270 ÷ 141,830 = 0.47
2 Click competitor name to see calculations.
The solvency profile exhibits a U-shaped trajectory over the five-year period, characterized by an initial phase of deleveraging followed by a period of increased capital acquisition and debt accumulation. A consistent reduction in leverage was observed from 2020 through 2022, which was subsequently reversed by an upward trend in both total debt and total capital from 2023 to 2024.
- Total Debt Trends
- Total debt decreased from US$ 64,647 million in 2020 to a minimum of US$ 52,254 million in 2022. This deleveraging phase was followed by a significant increase, with debt rising to US$ 61,610 million in 2023 and reaching US$ 66,270 million by the end of 2024, representing a level higher than that recorded at the start of the period.
- Total Capital Fluctuations
- Total capital followed a similar pattern of contraction and expansion, declining from US$ 134,036 million in 2020 to US$ 123,269 million in 2022. A subsequent increase was observed over the following two years, with total capital expanding to US$ 141,830 million by December 31, 2024.
- Debt to Capital Ratio Analysis
- The debt to capital ratio mirrored the movements in absolute debt and capital. The ratio improved from 0.48 in 2020 to a low of 0.42 in 2022, indicating a reduced reliance on borrowed funds relative to the total capital base. However, this trend reversed in 2023 and 2024, with the ratio climbing to 0.45 and 0.47 respectively, suggesting a return toward the higher leverage levels observed in 2020.
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Debt to Capital (including Operating Lease Liability)
CVS Health Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 2,119) | 200) | —) | —) | —) | |
| Current portion of long-term debt | 3,624) | 2,772) | 1,778) | 4,205) | 5,440) | |
| Long-term debt, excluding current portion | 60,527) | 58,638) | 50,476) | 51,971) | 59,207) | |
| Total debt | 66,270) | 61,610) | 52,254) | 56,176) | 64,647) | |
| Current portion of operating lease liabilities | 1,751) | 1,741) | 1,678) | 1,646) | 1,638) | |
| Long-term operating lease liabilities | 14,899) | 16,034) | 16,800) | 18,177) | 18,757) | |
| Total debt (including operating lease liability) | 82,920) | 79,385) | 70,732) | 75,999) | 85,042) | |
| Total CVS Health shareholders’ equity | 75,560) | 76,461) | 71,015) | 75,075) | 69,389) | |
| Total capital (including operating lease liability) | 158,480) | 155,846) | 141,747) | 151,074) | 154,431) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.52 | 0.51 | 0.50 | 0.50 | 0.55 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.24 | 0.29 | 0.33 | 0.35 | — | |
| Elevance Health Inc. | 0.44 | 0.40 | 0.41 | 0.40 | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | 0.01 | — | |
| Medtronic PLC | 0.34 | 0.33 | 0.32 | 0.35 | — | |
| UnitedHealth Group Inc. | 0.47 | 0.43 | 0.45 | 0.41 | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.38 | 0.37 | 0.38 | 0.37 | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.47 | 0.46 | 0.43 | 0.45 | — | |
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).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 82,920 ÷ 158,480 = 0.52
2 Click competitor name to see calculations.
An analysis of the solvency metrics indicates a period of debt reduction followed by a gradual increase in leverage. The capital structure remained relatively stable over the five-year period, with the debt-to-capital ratio fluctuating within a narrow range despite changes in absolute values.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a downward trajectory from December 31, 2020, to December 31, 2022, decreasing from US$ 85,042 million to US$ 70,732 million. This trend reversed in the subsequent two years, with debt rising to US$ 79,385 million in 2023 and reaching US$ 82,920 million by December 31, 2024.
- Total Capital Movements
- Total capital followed a pattern similar to total debt, contracting from US$ 154,431 million in 2020 to a low of US$ 141,747 million in 2022. A recovery occurred in 2023 and 2024, with total capital expanding to US$ 158,480 million, which represents the highest capital level within the analyzed period.
- Debt to Capital Ratio Analysis
- The debt to capital ratio decreased from 0.55 in 2020 to a consistent 0.50 throughout 2021 and 2022. A marginal upward trend is observed in the following years, with the ratio rising to 0.51 in 2023 and 0.52 in 2024. This indicates that while absolute debt levels have increased recently, the proportional reliance on debt relative to total capital has remained controlled and remains lower than the 2020 baseline.
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Debt to Assets
CVS Health Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 2,119) | 200) | —) | —) | —) | |
| Current portion of long-term debt | 3,624) | 2,772) | 1,778) | 4,205) | 5,440) | |
| Long-term debt, excluding current portion | 60,527) | 58,638) | 50,476) | 51,971) | 59,207) | |
| Total debt | 66,270) | 61,610) | 52,254) | 56,176) | 64,647) | |
| Total assets | 253,215) | 249,728) | 228,275) | 232,999) | 230,715) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.26 | 0.25 | 0.23 | 0.24 | 0.28 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Abbott Laboratories | 0.17 | 0.20 | 0.23 | 0.24 | — | |
| Elevance Health Inc. | 0.27 | 0.23 | 0.23 | 0.24 | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Medtronic PLC | 0.28 | 0.27 | 0.27 | 0.28 | — | |
| UnitedHealth Group Inc. | 0.26 | 0.23 | 0.23 | 0.22 | — | |
| Debt to Assets, Sector | ||||||
| Health Care Equipment & Services | 0.24 | 0.23 | 0.23 | 0.23 | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.32 | 0.30 | 0.28 | 0.30 | — | |
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).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 66,270 ÷ 253,215 = 0.26
2 Click competitor name to see calculations.
The solvency profile exhibits a cyclical pattern characterized by an initial reduction in leverage followed by a period of increased debt accumulation. While the total asset base expanded over the five-year duration, the proportion of assets financed by debt shifted in response to fluctuating borrowing requirements.
- Total Debt Trends
- A downward trend in total debt was observed between 2020 and 2022, with obligations decreasing from US$ 64,647 million to US$ 52,254 million. This trend reversed after 2022, as debt levels rose significantly to US$ 61,610 million in 2023 and reached a five-year peak of US$ 66,270 million by December 31, 2024.
- Total Asset Growth
- Total assets demonstrated a general upward trajectory, growing from US$ 230,715 million in 2020 to US$ 253,215 million in 2024. A minor contraction occurred in 2022, where assets dipped to US$ 228,275 million, before rebounding in the subsequent two years.
- Debt to Assets Ratio Analysis
- The debt to assets ratio reflects the combined impact of debt fluctuations and asset growth. The ratio declined from 0.28 in 2020 to a period low of 0.23 in 2022, indicating a temporary improvement in solvency. However, a subsequent increase is noted, with the ratio rising to 0.25 in 2023 and 0.26 in 2024, indicating a gradual increase in the reliance on debt to finance the organization's assets.
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Debt to Assets (including Operating Lease Liability)
CVS Health Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 2,119) | 200) | —) | —) | —) | |
| Current portion of long-term debt | 3,624) | 2,772) | 1,778) | 4,205) | 5,440) | |
| Long-term debt, excluding current portion | 60,527) | 58,638) | 50,476) | 51,971) | 59,207) | |
| Total debt | 66,270) | 61,610) | 52,254) | 56,176) | 64,647) | |
| Current portion of operating lease liabilities | 1,751) | 1,741) | 1,678) | 1,646) | 1,638) | |
| Long-term operating lease liabilities | 14,899) | 16,034) | 16,800) | 18,177) | 18,757) | |
| Total debt (including operating lease liability) | 82,920) | 79,385) | 70,732) | 75,999) | 85,042) | |
| Total assets | 253,215) | 249,728) | 228,275) | 232,999) | 230,715) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.33 | 0.32 | 0.31 | 0.33 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.19 | 0.22 | 0.24 | 0.26 | — | |
| Elevance Health Inc. | 0.27 | 0.24 | 0.24 | 0.25 | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | 0.01 | — | |
| Medtronic PLC | 0.29 | 0.28 | 0.27 | 0.29 | — | |
| UnitedHealth Group Inc. | 0.27 | 0.25 | 0.25 | 0.24 | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.26 | 0.24 | 0.25 | 0.25 | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.33 | 0.32 | 0.29 | 0.31 | — | |
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).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 82,920 ÷ 253,215 = 0.33
2 Click competitor name to see calculations.
An analysis of the solvency position between 2020 and 2024 reveals a period of initial deleveraging followed by a moderate increase in total obligations. The solvency profile indicates a relatively stable relationship between total liabilities and the asset base, despite fluctuations in absolute debt levels.
- Total Debt Trajectory
- A consistent reduction in total debt, including operating lease liabilities, occurred between 2020 and 2022, with obligations decreasing from US$ 85,042 million to US$ 70,732 million. This downward trend reversed in 2023 and 2024, as debt levels rose to US$ 79,385 million and US$ 82,920 million, respectively.
- Asset Base Evolution
- Total assets exhibited relative stability from 2020 through 2022, fluctuating within a narrow range around US$ 230 billion. A significant expansion was observed starting in 2023, with assets increasing to US$ 249,728 million and further growing to US$ 253,215 million by the end of 2024.
- Debt to Assets Ratio Analysis
- The debt to assets ratio decreased from a high of 0.37 in 2020 to a low of 0.31 in 2022, signaling an improvement in the company's solvency margin. Since 2022, the ratio has experienced a slight upward trend, reaching 0.33 by 2024. The fact that the ratio remains lower than the 2020 level, despite the increase in absolute debt, suggests that the growth in total assets has effectively mitigated the impact of the increased leverage.
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Financial Leverage
CVS Health Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 253,215) | 249,728) | 228,275) | 232,999) | 230,715) | |
| Total CVS Health shareholders’ equity | 75,560) | 76,461) | 71,015) | 75,075) | 69,389) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.35 | 3.27 | 3.21 | 3.10 | 3.32 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Abbott Laboratories | 1.71 | 1.90 | 2.03 | 2.10 | — | |
| Elevance Health Inc. | 2.83 | 2.77 | 2.83 | 2.70 | — | |
| Intuitive Surgical Inc. | 1.14 | 1.16 | 1.17 | 1.14 | — | |
| Medtronic PLC | 1.79 | 1.77 | 1.73 | 1.81 | — | |
| UnitedHealth Group Inc. | 3.22 | 3.08 | 3.16 | 2.96 | — | |
| Financial Leverage, Sector | ||||||
| Health Care Equipment & Services | 2.44 | 2.43 | 2.46 | 2.37 | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.75 | 2.70 | 2.57 | 2.69 | — | |
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).
1 2024 Calculation
Financial leverage = Total assets ÷ Total CVS Health shareholders’ equity
= 253,215 ÷ 75,560 = 3.35
2 Click competitor name to see calculations.
An examination of the solvency metrics between 2020 and 2024 reveals a period of moderate asset expansion accompanied by a gradual increase in financial leverage following a brief period of deleveraging. While the balance sheet has grown in overall size, the proportion of assets funded by equity has remained relatively stagnant, leading to a higher reliance on external financing by the end of the period.
- Total Asset Growth
- Total assets exhibited an overall upward trajectory, increasing from 230,715 million US dollars in 2020 to 253,215 million US dollars by 2024. A marginal contraction occurred in 2022, but this was followed by a significant expansion in 2023, where assets grew by approximately 9.3% in a single fiscal year.
- Shareholders' Equity Stability
- Equity levels remained relatively stable throughout the five-year period, fluctuating between a low of 69,389 million US dollars in 2020 and a peak of 76,461 million US dollars in 2023. The lack of a strong upward trend in equity relative to the growth in total assets suggests that organic capital accumulation has not kept pace with asset acquisition.
- Financial Leverage Trends
- The financial leverage ratio demonstrates a cyclical pattern. After declining from 3.32 in 2020 to 3.10 in 2021, the ratio entered a steady three-year ascending trend, reaching 3.35 by December 31, 2024. This progression indicates that the asset growth observed from 2022 onwards was primarily financed through liabilities rather than equity, returning the company to a leverage position slightly higher than that recorded at the start of the analysis period.
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Interest Coverage
CVS Health Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to CVS Health | 4,614) | 8,344) | 4,149) | 7,910) | 7,179) | |
| Add: Net income attributable to noncontrolling interest | (28) | 24) | 16) | (12) | 13) | |
| Less: Loss from discontinued operations, net of tax | —) | —) | —) | —) | (9) | |
| Add: Income tax expense | 1,562) | 2,805) | 1,463) | 2,522) | 2,569) | |
| Add: Interest expense | 2,958) | 2,658) | 2,287) | 2,503) | 2,907) | |
| Earnings before interest and tax (EBIT) | 9,106) | 13,831) | 7,915) | 12,923) | 12,677) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 3.08 | 5.20 | 3.46 | 5.16 | 4.36 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Abbott Laboratories | 13.55 | 11.46 | 15.89 | 16.41 | — | |
| Elevance Health Inc. | 7.67 | 8.49 | 10.13 | 10.93 | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | 7.73 | 9.43 | 10.98 | 5.21 | — | |
| UnitedHealth Group Inc. | 6.14 | 9.97 | 13.59 | 14.44 | — | |
| Interest Coverage, Sector | ||||||
| Health Care Equipment & Services | 7.67 | 10.16 | 13.22 | 12.30 | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 6.11 | 7.51 | 14.75 | 14.14 | — | |
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).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 9,106 ÷ 2,958 = 3.08
2 Click competitor name to see calculations.
The capacity to service debt obligations has demonstrated significant volatility over the five-year period ending December 31, 2024. This instability is primarily attributed to fluctuations in operating performance, although a rising trend in interest expenses in recent periods has further pressured the solvency margin.
- Interest Coverage Ratio Trends
- The interest coverage ratio experienced sharp oscillations, peaking at 5.20 in 2023 before declining to a period low of 3.08 by December 31, 2024. This downward movement in the final year indicates a reduced margin of safety for meeting interest payments compared to the recovery observed in 2023.
- Operating Earnings Impact
- Earnings before interest and tax (EBIT) exhibit an inconsistent trajectory, characterized by a substantial contraction to US$ 7,915 million in 2022 and a subsequent peak of US$ 13,831 million in 2023. The most recent decline to US$ 9,106 million in 2024 is the primary driver behind the corresponding decrease in the interest coverage ratio.
- Interest Expense Trajectory
- Interest expenses decreased from US$ 2,907 million in 2020 to a low of US$ 2,287 million in 2022. Since then, a steady upward trend has been observed, with expenses rising to US$ 2,958 million by the end of 2024. The convergence of declining EBIT and increasing interest costs has resulted in the weakest coverage position of the analyzed timeframe.
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Fixed Charge Coverage
CVS Health Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to CVS Health | 4,614) | 8,344) | 4,149) | 7,910) | 7,179) | |
| Add: Net income attributable to noncontrolling interest | (28) | 24) | 16) | (12) | 13) | |
| Less: Loss from discontinued operations, net of tax | —) | —) | —) | —) | (9) | |
| Add: Income tax expense | 1,562) | 2,805) | 1,463) | 2,522) | 2,569) | |
| Add: Interest expense | 2,958) | 2,658) | 2,287) | 2,503) | 2,907) | |
| Earnings before interest and tax (EBIT) | 9,106) | 13,831) | 7,915) | 12,923) | 12,677) | |
| Add: Operating lease cost | 2,423) | 2,532) | 2,579) | 2,633) | 2,670) | |
| Earnings before fixed charges and tax | 11,529) | 16,363) | 10,494) | 15,556) | 15,347) | |
| Interest expense | 2,958) | 2,658) | 2,287) | 2,503) | 2,907) | |
| Operating lease cost | 2,423) | 2,532) | 2,579) | 2,633) | 2,670) | |
| Fixed charges | 5,381) | 5,190) | 4,866) | 5,136) | 5,577) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 2.14 | 3.15 | 2.16 | 3.03 | 2.75 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Abbott Laboratories | 8.58 | 7.71 | 10.10 | 10.21 | — | |
| Elevance Health Inc. | 6.93 | 7.51 | 8.82 | 8.48 | — | |
| Intuitive Surgical Inc. | 79.87 | 74.09 | 63.52 | 93.66 | — | |
| Medtronic PLC | 5.88 | 6.90 | 7.79 | 4.31 | — | |
| UnitedHealth Group Inc. | 4.78 | 7.27 | 8.77 | 8.80 | — | |
| Fixed Charge Coverage, Sector | ||||||
| Health Care Equipment & Services | 5.95 | 7.55 | 9.07 | 8.36 | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 5.15 | 6.08 | 10.95 | 10.48 | — | |
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).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 11,529 ÷ 5,381 = 2.14
2 Click competitor name to see calculations.
The analysis of solvency ratios between 2020 and 2024 reveals a volatile pattern in the capacity to meet fixed obligations. While the cost of fixed charges remained relatively stable, the earnings available to cover these costs exhibited significant fluctuations, leading to a non-linear trend in the fixed charge coverage ratio.
- Earnings Before Fixed Charges and Tax
- Significant volatility is observed in earnings, which peaked in 2023 at 16,363 million US$ before declining to 11,529 million US$ in 2024. A sharp contraction occurred in 2022, with earnings dropping to 10,494 million US$, marking the lowest point in the analyzed period.
- Fixed Charges
- Fixed charges demonstrated relative stability throughout the five-year period. Expenditures fluctuated within a narrow range, reaching a minimum of 4,866 million US$ in 2022 and ending at 5,381 million US$ in 2024, indicating a consistent baseline of fixed financial obligations.
- Fixed Charge Coverage Ratio
- The coverage ratio directly reflects the volatility of earnings, oscillating between a high of 3.15 in 2023 and a low of 2.14 in 2024. The decline observed in 2022 to 2.16 was temporarily reversed in 2023; however, the 2024 figure indicates a return to lower coverage levels, suggesting a reduced margin of safety for meeting fixed obligations relative to the 2021 and 2023 peaks.
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