CVS Health Corp (CVS)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	21.28	28.43	27.56	23.93	21.90	19.96	20.61	19.24	18.08	18.03	18.32	17.22	17.36	16.50	16.65	15.86	15.08	15.57	16.45	15.94
Receivables turnover	8.39	8.60	9.81	10.10	9.15	9.79	10.55	10.80	10.50	10.88	10.35	10.35	10.50	10.16	10.54	10.30	11.22	9.86	10.42	10.12
Payables turnover	24.24	31.93	30.72	28.52	26.50	24.09	26.65	28.05	23.26	23.39	24.05	24.55	24.57	22.61	25.58	25.86	25.04	23.31	27.40	26.46
Working capital turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

Based on the data provided, we can analyze the activity ratios of CVS Health Corp over the given periods:

1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. CVS Health Corp's inventory turnover has shown a consistent improvement over the analyzed periods, increasing from 15.94 in March 2020 to 21.28 in December 2024. A higher inventory turnover indicates that CVS is selling its products more quickly, which can lead to higher profitability.

2. Receivables Turnover: The receivables turnover ratio reflects how well a company collects on its credit sales. CVS Health Corp's receivables turnover remained relatively stable throughout the periods, ranging between 8.39 and 11.22. A stable receivables turnover suggests that CVS has been effective in managing its accounts receivable and collecting payments from customers in a timely manner.

3. Payables Turnover: The payables turnover ratio measures how efficiently a company pays its suppliers. CVS Health Corp's payables turnover ratio fluctuated over the periods, with a general increasing trend from 23.31 in September 2020 to 31.93 in September 2024. A higher payables turnover ratio indicates that CVS is taking longer to pay its suppliers, which can be a sign of improved cash management.

4. Working Capital Turnover: The working capital turnover ratio assesses how efficiently a company utilizes its working capital to generate sales. Unfortunately, there is no data available for this ratio for CVS Health Corp over the analyzed periods. It appears to be unavailable or not applicable for the company.

In conclusion, CVS Health Corp has shown improvements in its inventory turnover and payables turnover ratios, indicating efficient management of inventory and payments to suppliers. The receivables turnover remained relatively stable, suggesting effective collection of credit sales. The working capital turnover ratio was not provided in the data.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	17.15	12.84	13.24	15.25	16.67	18.29	17.71	18.97	20.19	20.24	19.92	21.19	21.03	22.12	21.93	23.01	24.21	23.44	22.19	22.90
Days of sales outstanding (DSO)	days	43.50	42.46	37.20	36.15	39.91	37.29	34.60	33.81	34.78	33.54	35.26	35.28	34.76	35.92	34.63	35.42	32.52	37.03	35.04	36.06
Number of days of payables	days	15.05	11.43	11.88	12.80	13.77	15.15	13.69	13.01	15.70	15.61	15.18	14.87	14.85	16.14	14.27	14.11	14.58	15.66	13.32	13.79

The activity ratios of CVS Health Corp provide insights into how efficiently the company manages its inventory, sales, and payments.

1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days it takes for CVS Health Corp to sell its inventory.
- The trend from March 2020 to December 2024 shows a gradual decline in DOH, indicating that CVS has been managing its inventory more efficiently over time.
- The lower DOH values in recent periods suggest that CVS is turning its inventory into sales at a faster rate, which can reduce carrying costs and improve liquidity.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes CVS Health Corp to collect payments from customers after making sales.
- The DSO trend fluctuates over the years but generally shows no significant improvement or deterioration in collection efficiency.
- Higher DSO values may indicate potential issues with collecting receivables promptly, impacting cash flow and liquidity management.

3. Number of Days of Payables:
- This ratio measures how many days it takes for CVS Health Corp to pay its suppliers for inventory.
- The trend in the number of days of payables shows some variability but remains relatively stable over the period.
- A longer payment period may indicate favorable credit terms with suppliers, helping CVS maintain cash flow and working capital.

In summary, CVS Health Corp has shown improvement in managing inventory turnover, while maintaining relatively stable collection and payment cycles. Efficient inventory management and payment practices are essential for optimizing working capital and maintaining financial health. Tracking these activity ratios helps assess the company's operational efficiency and effectiveness in managing its cash conversion cycle.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	31.45	28.98	27.87	27.69	29.93	26.71	26.09	25.71	25.05	24.97	24.12	23.34	22.65	22.32	21.98	21.49	21.32	21.54	21.59	21.56
Total asset turnover	1.47	1.46	1.44	1.45	1.43	1.38	1.36	1.38	1.41	1.36	1.34	1.29	1.25	1.21	1.20	1.18	1.16	1.14	1.12	1.14

The fixed asset turnover ratio for CVS Health Corp has been steadily increasing over the years, indicating improved efficiency in generating revenue from its fixed assets. The ratio has shown a consistent upward trend, reaching a peak of 31.45 at the end of December 2024. This suggests that CVS Health Corp has been effectively utilizing its fixed assets to drive sales.

On the other hand, the total asset turnover ratio, which measures CVS Health Corp's ability to generate sales from all of its assets, has also been increasing over the years. The ratio has shown a gradual uptrend, indicating that the company is becoming more efficient in utilizing all its assets to generate revenue. The ratio reached 1.47 by the end of December 2024, reflecting the company's ability to efficiently convert its assets into sales.

Overall, both the fixed asset turnover and total asset turnover ratios for CVS Health Corp have been on an upward trajectory, showing improved efficiency and effectiveness in utilizing its assets to drive sales and generate revenue. This indicates a positive trend in the company's long-term activity performance.