CVS Health Corp (CVS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 24.35 | 21.88 | 18.08 | 17.36 | 15.08 |
| Receivables turnover | 8.39 | 9.15 | 10.50 | 10.50 | 11.22 |
| Payables turnover | 27.75 | 26.48 | 23.26 | 24.57 | 25.04 |
| Working capital turnover | — | — | — | — | — |
Based on the provided data, we can analyze the activity ratios of CVS Health Corp as follows:
1. Inventory Turnover:
- The inventory turnover ratio indicates the number of times a company sells and replaces its inventory during a specific period. CVS Health Corp's inventory turnover has been improving steadily over the years, increasing from 15.08 in 2020 to 24.35 in 2024. This indicates that CVS is managing its inventory efficiently and selling products more frequently.
2. Receivables Turnover:
- The receivables turnover ratio measures how many times a company collects its outstanding receivables during a period. CVS Health Corp's receivables turnover has shown a slight decrease from 11.22 in 2020 to 8.39 in 2024. A decreasing trend in receivables turnover could indicate slower collections or changes in the company's credit policies.
3. Payables Turnover:
- The payables turnover ratio reflects how many times a company pays off its accounts payable during a specific period. CVS Health Corp's payables turnover has shown a fluctuating pattern, ranging from 23.26 in 2022 to 27.75 in 2024. A higher payables turnover ratio suggests that the company is managing its payments efficiently.
4. Working Capital Turnover:
- The working capital turnover ratio shows how efficiently a company is using its working capital to generate sales revenue. In this case, the data shows "—", indicating that working capital turnover ratios are not available for the specified years. This could be due to the nature of CVS's operations or the data availability.
Overall, the analysis of these activity ratios suggests that CVS Health Corp has been effectively managing its inventory and payables turnover, while there has been a slight decline in receivables turnover over the years. The absence of working capital turnover data limits our ability to assess the efficiency of working capital utilization for the company.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 14.99 | 16.68 | 20.19 | 21.03 | 24.21 |
| Days of sales outstanding (DSO) | days | 43.50 | 39.91 | 34.78 | 34.76 | 32.52 |
| Number of days of payables | days | 13.15 | 13.79 | 15.70 | 14.85 | 14.58 |
Based on the provided data, CVS Health Corp's activity ratios show the following trends:
1. Days of Inventory on Hand (DOH):
- The company's DOH has been decreasing steadily over the years, from 24.21 days as of December 31, 2020, to 14.99 days as of December 31, 2024. This indicates that CVS has been managing its inventory more efficiently, taking fewer days to sell its inventory.
2. Days of Sales Outstanding (DSO):
- The DSO for CVS Health Corp has been increasing year over year, from 32.52 days as of December 31, 2020, to 43.50 days as of December 31, 2024. This suggests that the company is taking longer to collect payments from its customers, which could indicate potential issues with credit policies or customer payment behaviors.
3. Number of Days of Payables:
- The number of days of payables has shown some fluctuations but has generally remained relatively stable over the years. It decreased slightly from 14.58 days as of December 31, 2020, to 13.15 days as of December 31, 2024. This indicates that CVS has been able to manage its accounts payable efficiently.
Overall, these activity ratios suggest that CVS Health Corp has improved its inventory management efficiency, but may need to focus on optimizing its accounts receivable collection processes to improve cash flow in the future.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 31.45 | 29.93 | 25.05 | 22.65 | 21.32 |
| Total asset turnover | 1.47 | 1.43 | 1.41 | 1.25 | 1.16 |
Based on the provided data, we can analyze the long-term activity ratios of CVS Health Corp using the fixed asset turnover and total asset turnover ratios.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently a company is using its fixed assets to generate sales. It measures the amount of sales generated for each dollar of fixed assets.
- Over the five-year period from 2020 to 2024, CVS Health Corp's fixed asset turnover ratio has been increasing steadily, from 21.32 in 2020 to 31.45 in 2024.
- The increasing trend indicates that CVS Health Corp has been effectively utilizing its fixed assets to generate sales, showing improved efficiency in the utilization of its long-term assets.
2. Total Asset Turnover:
- The total asset turnover ratio reflects how well a company is utilizing all its assets to generate revenue. It measures the amount of sales generated for each dollar of total assets.
- Similar to the fixed asset turnover ratio, CVS Health Corp's total asset turnover has also shown a consistent upward trend over the five-year period.
- The total asset turnover ratio has increased from 1.16 in 2020 to 1.47 in 2024, signaling that CVS Health Corp has been increasingly efficient in generating sales relative to its total assets.
In summary, based on the analysis of the fixed asset turnover and total asset turnover ratios, CVS Health Corp has demonstrated improving efficiency in utilizing its fixed assets and total assets to generate sales over the years. This indicates a positive trend in the company's long-term activity and asset utilization, highlighting its ability to generate revenue efficiently.