CVS Health (CVS Health) Operating Income

: $14,599 Mil (TTM As of Dec. 2023)

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CVS Health's Operating Income for the three months ended in Dec. 2023 was $3,373 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $14,599 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. CVS Health's Operating Income for the three months ended in Dec. 2023 was $3,373 Mil. CVS Health's Revenue for the three months ended in Dec. 2023 was $93,813 Mil. Therefore, CVS Health's Operating Margin % for the quarter that ended in Dec. 2023 was 3.60%.

Warning Sign:

CVS Health Corp operating margin has been in a 5-year decline. The average rate of decline per year is -3%.

CVS Health's 5-Year average Growth Rate for Operating Margin % was -3.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. CVS Health's annualized ROC % for the quarter that ended in Dec. 2023 was 5.37%. CVS Health's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 44.51%.

CVS Health Operating Income Historical Data

The historical data trend for CVS Health's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

CVS Health Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

12,218.00

13,911.00

15,099.00

16,290.00

14,599.00

CVS Health Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Operating Income																3,770.00	3,795.00	3,730.00	3,701.00	3,373.00

CVS Health Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $14,599 Mil.

CVS Health (NYSE:CVS) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

CVS Health's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	13492 * ( 1 - 24.33% )	/	( (191224	+	189050)	/ 2 )
=	10209.3964	/	190137
=	5.37 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	251306	-	71492	-	( 16188	-	max(0, 81553	-	70143	+	16188	))
=	191224

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	249728	-	72009	-	( 11455	-	max(0, 79189	-	67858	+	11455	))
=	189050

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

CVS Health's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	13580	/	( ( (30586 + max(-46228, 0))	+	(30435 + max(-41392, 0)) )	/	2 )
=	13580	/	( ( 30586	+	30435 )	/	2 )
=	13580	/	30510.5
=	44.51 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(10424	+	17954	+	3074)	-	(71492	+	0	+	6188)
=	-46228

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(11908	+	18025	+	3151)	-	(72009	+	0	+	2467)
=	-41392

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

CVS Health's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	3373	/	93813
	=	3.60 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

CVS Health Operating Income Related Terms

Thank you for viewing the detailed overview of CVS Health's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

CVS Health (CVS Health) Business Description

Industry

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Address

One CVS Drive, Woonsocket, RI, USA, 02895

Website

https://www.cvshealth.com

CVS Health offers a diverse set of healthcare services. Its roots are in its retail pharmacy operations, where it operates over 9,000 stores primarily in the U.S. CVS is also the largest pharmacy benefit manager (acquired through Caremark), processing over 2 billion adjusted claims annually. It also operates a top-tier health insurer (acquired through Aetna) where it serves about 26 million medical members. The company's recent acquisition of Oak Street adds primary care services to the mix, which could have significant synergies with all its existing business lines.

Executives

Edward J Ludwig	director	C/O BECTON DICKERSON & CO, 1 BECTON DR, FRANKLIN LAKES NJ 07417
Michael F Mahoney	director	BOSTON SCIENTIFIC CORPORATION, 300 BOSTON SCIENTIFIC WAY, MARLBOROUGH MA 01752-1234
Thomas F. Cowhey	officer: SVP, Interim CFO	310 SEVEN SPRINGS WAY, SUITE 500, BRENTWOOD TN 37027
J Scott Kirby	director	233 S. WACKER DRIVE 11TH FL WHQLD, CHICAGO IL 60606
Brian A Kane	officer: EVP/President, Aetna	500 W MAIN STREET, LOUISVILLE KY 40202
James David Clark	officer: SVP, Cont & Chief Acct Officer	ONE CVS DRIVE, WOONSOCKET RI 02760
Karen S Lynch	officer: EVP & Pres, Aetna Bus Unit	151 FARMINGTON AVENUE, RW61, HARTFORD CT 06156
Samrat S. Khichi	officer: EVP, CPO and General Counsel	C/O CATALENT, INC., 14 SCHOOLHOUSE ROAD, SOMERSET NJ 08873
Thomas M Moriarty	officer: EVP & General Counsel	100 PARSONS POND DRIVE, FRANKLIN LAKES NJ 07417
Jeffrey R. Balser	director	3657 RICHLAND AVE., NASHVILLE TN 37205
Alan Lotvin	officer: EVP, Transformation	55 NOD ROAD, AVON CT 06001
Daniel P Finke	officer: EVP/Pres, Health Care Benefits	ONE CVS DRIVE, WOONSOCKET RI 02895
Tilak Mandadi	officer: EVP, Chief Technology Officer	3600 LAS VEGAS BLVD. SOUTH, LAS VEGAS NV 89109
Sreekanth K Chaguturu	officer: EVP and Chief Medical Officer	ONE CVS DRIVE, WOONSOCKET RI 02895
Prem S Shah	officer: EVP and Co-President of Retail	ONE CVS DRIVE, WOONSOCKET RI 02895