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CVS Health Financial Strength

: 5 (As of Jun. 2022)
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CVS Health has the Financial Strength Rank of 5.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

CVS Health's Interest Coverage for the quarter that ended in Jun. 2022 was 7.84. CVS Health's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.23. As of today, CVS Health's Altman Z-Score is 2.38.


Competitive Comparison

For the Healthcare Plans subindustry, CVS Health's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

CVS Health Financial Strength Distribution

For the Healthcare Plans industry and Healthcare sector, CVS Health's Financial Strength distribution charts can be found below:

* The bar in red indicates where CVS Health's Financial Strength falls into.



CVS Health Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

CVS Health's Interest Expense for the months ended in Jun. 2022 was $-583 Mil. Its Operating Income for the months ended in Jun. 2022 was $4,569 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $68,299 Mil.

CVS Health's Interest Coverage for the quarter that ended in Jun. 2022 is

Interest Coverage=-1*Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*4569/-583
=7.84

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

CVS Health's Debt to Revenue Ratio for the quarter that ended in Jun. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(5873 + 68299) / 322544
=0.23

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

CVS Health has a Z-score of 2.38, indicating it is in Grey Zones. This implies that CVS Health is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.38 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* 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.


CVS Health  (NYSE:CVS) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

CVS Health has the Financial Strength Rank of 5.


CVS Health Financial Strength Related Terms

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


CVS Health Business Description

CVS Health logo
Address
One CVS Drive, Woonsocket, RI, USA, 02895
CVS Health Corp, its acquisition of Aetna in late 2018, CVS Health now provides an even more integrated healthcare-services offering for its members. Legacy CVS a sizable pharmacy operation, includes nearly 9,900 retail pharmacy locations primarily in the U.S. Adding a managed-care organization with 35 million medical members gives the company a strong position in the insurance industry and should help CVS better control overall healthcare costs for its clients.
Executives
Chaguturu Sreekanth K officer: EVP and Chief Medical Officer ONE CVS DRIVE WOONSOCKET RI 02895
Peluso Michelle A officer: EVP and Co-President of Retail 3150 SABRE DRIVE SOUTHLAKE TX 76092
Shah Prem S officer: EVP and Co-President of Retail ONE CVS DRIVE WOONSOCKET RI 02895
Brennan Troyen A officer: EVP and Chief Medical Officer AETNA INC. 151 FARMINGTON AVENUE HARTFORD CT 06156
Guertin Shawn M officer: EVP & Chief Financial Officer TRINET GROUP, INC. ONE PARK PLACE, SUITE 600 DUBLIN CA 94568
Havanec Laurie P. officer: EVP and Chief People Officer ONE CARRIER PLACE FARMINGTON CT 06032
Finke Daniel P officer: EVP/Pres, Health Care Benefits ONE CVS DRIVE WOONSOCKET RI 02895
Montgomery Neela officer: EVP and Pres., Pharmacy/Retail C/O LOGITECH INTERNATIONAL S.A. LES CHATAGNIS APPLES V8 1143
Mayhew Jonathan E. officer: EVP, Chief Transformation Off ONE CVS DRIVE WOONSOCKET RI 02895
Ludwig Edward J director C/O BECTON DICKERSON & CO 1 BECTON DR FRANKLIN LAKES NJ 07417
Farah Roger N director POLO RALPH LAUREN CORP 650 MADISON AVE NEW YORK NY 10022
Bertolini Mark T director AETNA INC. 151 FARMINGTON AVENUE HARTFORD CT 06156
Flum Joshua Matthew officer: EVP, Ent. Strategy & Digital 704 EXECUTIVE BOULEVARD VALLEY COTTAGE NY 10989
Lynch Karen S officer: EVP & Pres, Aetna Bus Unit 151 FARMINGTON AVENUE RW61 HARTFORD CT 06156
Aguirre Fernando director CHIQUITA BRANDS INTERNATIONAL 250 EAST FIFTH STREET CINCINNATI OH 45202

CVS Health Headlines

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