CVS Health Corp. (NYSE:CVS)

Debt to equity

The ratio showed a steady decline from 1.1 at the start of the period in March 2020 to a low of 0.73 in June 2022, indicating a gradual reduction in reliance on debt relative to equity. After this trough, the ratio experienced some fluctuations, rising to 0.88 by June 2024 before slightly decreasing to 0.84 by March 2025. This suggests a moderate increase in leverage in the later periods but remaining below the initial level.

Debt to equity (including operating lease liability)

This ratio mirrored the general downward trend of the standard debt to equity ratio, starting at 1.42 in March 2020 and declining to about 0.99 by June 2022. Post mid-2022, the ratio rose gradually to around 1.13 in June 2023, then declined slightly to 1.06 by March 2025. The inclusion of operating lease liabilities results in a higher level of reported leverage compared to the standard debt to equity ratio but follows a similar trend over time.

Debt to capital

The proportion of debt to total capital steadily decreased from 0.52 in March 2020 to approximately 0.42 by mid-2022, suggesting an improved capital structure with less dependence on debt. Post mid-2022, this ratio experienced a modest increase, stabilizing around 0.46 by early 2025, signifying a slight return to higher leverage but still lower than the initial value.

Debt to capital (including operating lease liability)

This ratio consistently tracked higher than the standard debt to capital measure, starting at 0.59 in March 2020 and dropping to 0.5 by mid-2022. Afterwards, it showed marginal fluctuations between 0.51 and 0.53 until March 2025, reflecting sustained leverage influenced by leases but no significant structural changes.

Debt to assets

The ratio declined gradually from 0.31 in early 2020 to 0.23 by late 2022, indicating a decreasing proportion of assets financed through debt. Thereafter, the ratio modestly increased to 0.26 around mid-2024, before slightly pulling back to 0.25 by March 2025. This change denotes a cautious incremental increase in debt financing within the asset base.

Debt to assets (including operating lease liability)

Following a similar pattern, this ratio decreased from 0.4 in early 2020 to 0.31 by late 2022, then slightly sawaws between 0.32 and 0.33 through early 2025. The inclusion of operating lease liabilities consistently raises the ratio by about 7 to 8 percentage points relative to the standard measure, reflecting the balance sheet impact of lease obligations.

Financial leverage

Financial leverage decreased steadily from 3.54 in March 2020 to a low of 3.06 in June 2022, suggesting a reduced use of debt in the capital structure or increased equity funding. Following this low point, leverage ratios increased moderately but remained relatively stable around 3.3 to 3.4 through early 2025, indicating a balanced leverage position in recent quarters.

Interest coverage

Interest coverage data is limited but shows a generally strong capacity to cover interest expenses during the periods reported. Starting at 4.36 in December 2020, the ratio increased to a peak of 5.49 by September 2022, reflecting improved operational profitability or reduced interest expenses. However, starting in the fourth quarter of 2022, the ratio declined sharply to lows near 2.71-3.43, before partially recovering to around 3.3 in early 2025. This indicates increased volatility in earnings relative to interest costs and a potential decline in earnings buffer against interest expenses in the recent periods.

Summary

Overall, the financial leverage and related debt ratios showed a clear downward trend from 2020 through mid-2022, indicating a deliberate reduction in debt levels or strengthening equity base. Beginning in mid-2022, some ratios began to increase moderately, suggesting a cautious reversal or stabilization of leverage at slightly higher levels. The inclusion of operating lease liabilities consistently elevates debt-related ratios but follows a similar trajectory. Interest coverage ratios demonstrated strong coverage in the earlier reported periods but revealed increased volatility and a lower margin of safety for interest obligations in the most recent quarters. Collectively, the data reflects prudent debt management with a moderate rise in leverage in recent times accompanied by some pressure on interest coverage capacity.

Total debt

The total debt exhibits a general downward trend from March 31, 2020 to December 31, 2022, declining from $71,818 million to a low around $52,254 million. Beginning in March 31, 2023, total debt reverses this trend, increasing steadily to reach approximately $64,710 million by March 31, 2025, with some minor fluctuations during this period.

Total CVS Health shareholders’ equity

Shareholders' equity shows an overall increasing trend through the entire period. Starting at $65,140 million in March 31, 2020, equity consistently grows, reaching approximately $75,560 million by December 31, 2024 and further to $76,929 million by March 31, 2025. This steady growth reflects an accumulation of equity despite some minor variations in interim quarters.

Debt to equity ratio

The debt to equity ratio decreases from 1.10 on March 31, 2020, to a low of approximately 0.73-0.74 between June and December 2022, indicating deleveraging and stronger equity relative to debt during this period. Starting early 2023, the ratio increases again to peak around 0.89 in mid-2024, before slightly declining to 0.84 by March 31, 2025. This pattern aligns closely with the trends observed in total debt and equity, showing a period of reducing leverage followed by moderate tightening.

The analysis of the financial data reveals several notable trends in the company's capital structure and leverage over the observed periods.

Total Debt (including operating lease liability)

The total debt level exhibited a generally declining trend from March 31, 2020, through December 31, 2022, falling from approximately $92.3 billion to about $70.7 billion. This reduction suggests a concerted effort to deleverage over this period. However, starting in March 31, 2023, total debt began to increase again, reaching around $82.9 billion by December 31, 2024, with a slight decrease to $81.2 billion by March 31, 2025. This reversal indicates a renewed accumulation of debt after the previous deleveraging phase.

Total CVS Health Shareholders’ Equity

Shareholders' equity steadily increased from approximately $65.1 billion in March 31, 2020, to about $75.6 billion by December 31, 2024. A minor dip occurred around September 30, 2022, but equity levels recovered and continued to grow, reaching $76.9 billion by March 31, 2025. The upward trend in equity reflects positive retained earnings accumulation or capital injections, supporting a stronger equity base over time.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio decreased significantly from 1.42 in March 31, 2020, to a low point of 1.00 by December 31, 2022. This decline corroborates the deleveraging effort seen in the total debt figures relative to equity growth. However, starting in 2023, the ratio began to climb again, peaking at approximately 1.13 in June 30, 2023, before fluctuating slightly and ending at 1.06 in March 31, 2025. The increase after 2022 suggests a relative rise in leveraged financing compared to equity, albeit not reaching previous high levels in early 2020.

In summary, the company’s financial strategy over the observed timeframe involved an initial significant reduction in debt and simultaneous equity growth, leading to improved leverage ratios by late 2022. Subsequently, there was a moderate increase in debt levels and debt-to-equity ratios starting in early 2023, implying a shift toward higher leverage while maintaining a steadily increasing equity base. These trends highlight dynamic capital management balancing debt reduction and controlled leveraging within the period analyzed.

Total Debt

Total debt exhibits an overall declining trend from March 31, 2020 to December 31, 2022, decreasing from approximately $71.8 billion to $52.3 billion. This reduction is gradual and consistent over the period, reflecting a deliberate effort in debt management or repayment.

Starting from March 31, 2023, total debt increases again, reaching a peak of about $64 billion in June 30, 2024, before slightly dipping towards the end of the period observed, with total debt around $64.7 billion by March 31, 2025. The post-2022 increase suggests renewed borrowing or a change in capital structure strategy.

Total Capital

Total capital remains relatively stable from March 31, 2020 through March 31, 2023, fluctuating in the range of approximately $123 billion to $139 billion. The values show minor ups and downs but no strong directional trend during this timeframe.

From March 31, 2023 onwards, total capital trends upwards, rising from $129.6 billion to a peak near $141.8 billion around March 31, 2025. This increase in capital could reflect growth in equity financing, retained earnings, or other capital injections, indicating expansion or strengthening of the capital base.

Debt to Capital Ratio

The debt to capital ratio shows a steady decrease from 0.52 in March 31, 2020 to about 0.42 by December 31, 2022, indicating a reduction in reliance on debt financing relative to total capital over this period. This trend aligns with the observed reduction in total debt and relatively stable total capital.

Beginning in early 2023, the ratio reverses trend and increases from 0.45 up to approximately 0.47 by June 30, 2024, afterwards stabilizing slightly below this level through March 31, 2025. This upward movement reflects the increase in total debt relative to capital, suggesting a modest increase in leverage or debt dependence after the previous deleveraging phase.

Summary of Trends

Over the observed periods, the financial data demonstrate an initial phase of deleveraging where total debt and debt-to-capital ratio decline, coupled with stable capital levels. This phase likely reflects efforts to improve balance sheet strength or reduce financial risk.

The latter phase, commencing in 2023, shows an uptick in total debt and a rising debt to capital ratio despite continuing growth in total capital. This may indicate strategic borrowing to finance growth initiatives, asset acquisitions, or other operational needs.

Overall, the company appears to have managed its capital structure dynamically, responding to changing financial or strategic conditions with periods of both deleveraging and moderate re-leveraging while maintaining a substantial capital base.

Total Debt (including operating lease liability)

The total debt exhibited a declining trend from March 2020 through December 2022, decreasing from approximately 92.3 billion US dollars to about 70.7 billion. This indicates a gradual reduction in debt over nearly three years. However, starting from March 2023, the total debt levels increased again, peaking near 82.1 billion by June 2023 before fluctuating around the 81–83 billion range towards the end of the observed period in March 2025. This recent stabilization at a higher debt level suggests renewed borrowing or changes in liability structure after the prolonged reduction phase.

Total Capital (including operating lease liability)

Total capital remained relatively stable, with minor fluctuations around the 150–160 billion dollar range throughout the entire period. It trended slightly downward from around 157.5 billion in March 2020 to about 141.7 billion in December 2022. After this trough, total capital rose consistently, peaking near 158.7 billion in June 2024, before experiencing a marginal decline towards 158.1 billion by March 2025. This pattern indicates some capital base contraction leading up to late 2022, followed by a period of recovery and modest growth.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio demonstrated a steady improvement from 0.59 in March 2020 to 0.50 by December 2021 and held at around 0.50 until December 2022. This signifies a gradual deleveraging and improved capital structure stability during this period. Starting early 2023, the ratio increased to approximately 0.52-0.53, reflecting the earlier noted rise in total debt while total capital grew slightly. Despite this increase, the ratio remained within a narrow band around 0.51 to 0.53, indicating that the company maintained a consistent leverage level without extreme variation in relative debt risk.

Overall Analysis

The financial data outlines a notable deleveraging phase through 2020 to 2022, with declining total debt and a stable or slightly reduced total capital base, enhancing the company's capital structure. From early 2023 onward, an apparent shift occurred with increasing debt levels accompanied by modest growth in total capital. This led to a moderate rise in the debt-to-capital ratio, yet it continued to reflect a balanced leverage profile. The patterns suggest a strategic adjustment possibly responding to new financing needs or investment opportunities, with the company sustaining its capital structure within a manageable range throughout the period examined.

Total Debt

The total debt levels show a general declining trend from March 31, 2020, through December 31, 2022, decreasing from $71,818 million to $52,254 million. However, starting in early 2023, total debt began to increase again, reaching a peak of $66,374 million in June 30, 2024, before slightly decreasing to $64,710 million by March 31, 2025. This pattern suggests an initial strong deleveraging effort which was reversed or moderated in the most recent periods.

Total Assets

Total assets have been relatively stable with a slight increasing trend over the entire timeline. From $230,639 million at the beginning of 2020, assets oscillated slightly but have increased to $255,585 million by the end of the first quarter of 2025. This steady growth demonstrates ongoing asset accumulation or appreciation despite fluctuations in other financial measures.

Debt to Assets Ratio

The debt to assets ratio exhibits a downward trend from 0.31 at the start of 2020 to 0.23 by the end of 2022, indicating improved leverage or de-risking during this period. Post-2022, there is a mild reversal in this trend where the ratio edges upwards, stabilizing around 0.26 through the latest available quarter in 2025. This reflects a moderate increase in leverage relative to the asset base in recent periods following a prior decline.

Overall Analysis

The data reflects an initial phase of reduced leverage accompanied by stable asset growth up to late 2022. Subsequently, debt levels increased, pushing the leverage ratio upward, while assets growth has continued at a modest pace. This shift may indicate changed strategic priorities, increased borrowing needs, or external factors influencing capital structure. The stabilization of the debt to asset ratio around 0.25-0.26 suggests a balancing of leverage at a moderate level relative to total assets.

Total Debt (including operating lease liability)

The total debt level shows a general decreasing trend from March 31, 2020, at approximately $92.3 billion, reaching a low point around December 31, 2022, at $70.7 billion. Following this trough, debt levels increased steadily through March 31, 2025, peaking near $81.2 billion before a slight decline at the end of the period. This pattern indicates initial debt reduction efforts followed by a phase of accumulating additional leverage in the later quarters.

Total Assets

Total assets remained relatively stable over the period, fluctuating slightly around the $230 billion mark initially but showing a marked upward trend starting from late 2022 through to the end of the period. Assets peaked near $255.6 billion by March 31, 2025, reflecting growth in asset base particularly in the last 18 months covered. This increase in assets during the most recent periods indicates expansion or acquisition activities enhancing the company's asset holdings.

Debt to Assets Ratio (including operating lease liability)

The debt-to-assets ratio demonstrates a steady and meaningful decline from 0.40 in March 2020 to approximately 0.31 by December 2022, implying improved leverage and possibly stronger financial stability during this phase. However, from December 2022 onwards, the ratio trends slightly upwards and stabilizes around 0.32 to 0.33, which corresponds to the increased debt levels alongside the asset growth. This indicates a modest increase in leverage relative to total assets but still at lower levels compared to the initial periods.

Total Assets

The total assets of the company demonstrated relative stability with minor fluctuations throughout the observed period. Starting at approximately $230.6 billion in March 2020, the asset base remained within a narrow range, peaking around $251.3 billion in September 2023.

There was no consistent upward or downward trend over the full timeframe, but notable growth occurred between early 2023 and late 2024, indicating a phase of asset accumulation or revaluation during that interval.

Total CVS Health Shareholders’ Equity

Shareholders’ equity exhibited a general upward trend overall, increasing from about $65.1 billion in March 2020 to $76.9 billion by March 2025. This progression reflects a steady accumulation of equity over the five-year span.

Periods of moderate variation are noticeable, for example, a slight decline was recorded between June and September 2022 before recovering in subsequent quarters. The consistency of growth in equity suggests effective capital management and retained earnings accumulation.

Financial Leverage

The financial leverage ratio showed a gradual decrease from 3.54 in March 2020 to a low of 3.06 in June 2022, implying a reduction in the relative use of debt compared to equity during the initial years of the period.

Following this period, the ratio fluctuated upward, reaching around 3.44 in June 2023 before generally stabilizing near 3.3 towards March 2025. These movements suggest changes in the capital structure, potentially reflecting varying debt levels or shifts in equity.

Overall Observations

The data indicate that the company maintained a stable asset base with gradual growth in shareholder equity, reflecting financial strengthening. Leverage ratios' decline and subsequent stabilization imply management's efforts to balance risk and capital efficiency.

There are no sharp anomalies or extreme volatility, which points to consistent operational and financial strategies. However, the periods of leverage ratio increases may warrant closer monitoring to understand underlying financing decisions.

Earnings before interest and tax (EBIT)

The EBIT values exhibit significant volatility over the analyzed quarters. Initially, there is a peak in the second quarter of 2020 followed by a sharp decline towards the end of 2020. In early 2021, EBIT rises again to levels comparable to early 2020, before experiencing another drop in the fourth quarter of 2022, where a notable negative value is observed in the third quarter of that year. After this sharp dip, the EBIT recovers and demonstrates a relatively stable upward trend through 2023 and early 2024, albeit with fluctuations. However, the last reported quarters in 2024 show a decline in EBIT, which may indicate emerging challenges or higher volatility in operational earnings.

Interest Expense

Interest expense shows a gradual but consistent increase over the entire period. Starting at 733 million US dollars in the first quarter of 2020, it trends upward to reach 785 million US dollars in the first quarter of 2025. This steady rise suggests increasing borrowing costs or higher levels of debt financing over time. No sudden spikes or drops are apparent, indicating stable interest expense growth without abrupt financial strain in servicing debt.

Interest Coverage Ratio

The interest coverage ratio demonstrates fluctuating capacity to meet interest obligations from operating earnings. Although data for some initial periods are missing, available figures from late 2020 onward show an increasing trend with peaks around late 2021, reaching values above 5.0, suggesting strong interest coverage at this time. However, there are quarters with significant declines in the ratio, notably in late 2022 and parts of 2023, where values drop below 3.0, reflecting periods of lowered ability to cover interest expenses comfortably. The ratio improves again towards the end of 2023 and into 2024 but declines in the last observed quarter. These fluctuations correspond with volatility in EBIT rather than interest expense, which remains steadily increasing but not disproportionately.

Overall Analysis

The company’s operating profitability (EBIT) shows notable volatility with periods of both growth and significant contraction, including one quarter with negative EBIT, indicating unusual operational challenges during that time. Interest expenses steadily increase, reflecting growing debt obligations. The interest coverage ratio correspondingly fluctuates, influenced mainly by changes in EBIT rather than interest expense, indicating variable earnings performance impacting the ability to meet interest costs. The overall financial pattern suggests a need for monitoring earnings stability and continued debt levels to ensure sustained financial health in the medium term.