Al Yamamah University Financial Statements of CVS Health Corporation Worksheet please answer in and its optional for the Excel You can write the formula or

Al Yamamah University Financial Statements of CVS Health Corporation Worksheet please answer in and its optional for the Excel You can write the formula or in excel Section A:
Following are the financial statements of CVS Health Corporation for the year ended
December 31, 2016. Prepare a forecasted income statement and balance sheet for the company
for the next year.
CVS Health Corporation
Consolidated Balance Sheets
In millions
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventories
Other current assets
Total current assets
Property and equipment, net
Goodwill
Intangible assets, net
Other assets
Total assets
Dec. 31,
2016
$ 3,371
87
12,164
14,760
660
31,042
10,175
38,249
13,511
1,485
94,462
Dec. 31,
2015
$ 2,459
88
11,888
14,001
722
29,158
9,855
38,106
13,878
1,440
92,437
Accounts payable
Claims and discounts payable
Accrued expenses
Short-term debt
Current portion of long-term debt
Total current liabilities
Long-term debt
Deferred income taxes
Other long-term liabilities
Redeemable noncontrolling interest
7,946
9,451
6,937
1,874
42
26,250
25,615
4,214
1,549
0
7,490
7,653
6,829
0
1,197
23,169
26,267
4,217
1,542
39
Common stock, par value $0.01
Treasury stock, at cost
Shares held in trust
Capital surplus
Retained earnings
Accumulated other comprehensive loss
Total CVS Health shareholders’ equity
Noncontrolling interest
Total shareholders’ equity
Total liabilities and shareholders’ equity
CVS Health Corporation
Consolidated Statements of Income
In millions
17
(33,452)
(31)
31,618
38,983
(305)
36,830
4
36,834
$ 94,462
17
(28,886)
(31)
30,948
35,506
(358)
37,196
7
37,203
$ 92,437
Dec. 31,
Dec. 31,
Net revenues
Cost of revenues
Gross profit
Total operating expenses
Operating profit
Interest expense, net
Loss on early extinguishment of debt
Income before income tax provision
Income tax provision
Income from continuing operations
Income (loss) from discontinued operations,
net
Net income
Net loss attributable to noncontrolling interest
Net income attributable to CVS Health
Corporation
2016
$ 177,526
148,669
28,857
18,519
10,338
1,058
643
8,637
3,317
5,320
2015
$ 153,290
126,762
26,528
17,074
9,454
838
0
8,616
3,386
5,230
(1)
5,319
(2)
9
5,239
(2)
$ 5,317
$ 5,237
To forecast the financial statements, make the following assumptions. For accounts that are not
included in the list below, assume that the amount will not change for the forecasted year.
Growth in net revenues
Cost of revenues
Operating expenses to net revenues
Loss on early extinguishment of
debt…………………………………
Income tax provision to income before income tax provision
Loss from discontinued operations
A/R to net revenues
Inventories to net revenues
CAPEX to net revenues
Forecasted depreciation expense ($ millions)
Forecasted amortization of intangible assets ($ millions)
Long-term debt due 2018 ($ millions)
A/P to net revenues
Claims and discounts payable to net revenues
Accrued expenses to net revenues
Dividends to net income attributable to CVS Health Corp.
5.0%
83.7%
10.4%
$0
38.4%
$0
6.9%
8.3%
1.7%
$1,231
$302
$1,916
4.5%
5.3%
3.9%
20.0%
Question 1: Prepare a forecasted income statement and balance sheet for the company for the
next year. (6 points)
Question 2: Write your analysis about the estimated performance of the company in the income
statement (2 points) and the balance sheet (2 points)
You may use the attached excel sheet to answer
Section B:
Question 1: Everett Company uses the average cost method to account for inventory and has the
following activity during the month of March 2017.
Units
Unit cost
Beginning inventory
350
$22.50
Purchase #1
650
18.00
Purchase #2
250
15.00
During March, Everett sold 850 units.
Compute the
a) cost of goods sold for March (1 point)
b) The ending inventory balance at March 31, 2017. (1 point)
c) Which method of the three cost methods (FIFO, LIFO and Average cost) is bitter and
why? ( 1point)
Section B:
On December 31, 2017, Tri-State Construction Inc. signs a contract with the state of West
Virginia Department of Transportation to manufacture a bridge over the New River. State
anticipates the construction will take three years. The company’s accountants provide the
following contract details relating to the project:
Contract price $780 million
Estimated construction costs $700 million
Estimated total profit $180 million
During the three-year construction period, Tri-State incurred costs as follows:
2018 $ 160 million
2019 $360 million
2020 $180 million
Question 2: Compute the revenue recognized, construction costs expensed, and income earned
for each year using the cost-to-cost method.( 3 points)
Answer:
Construction costs incurred
Percentage to total costs
Revenue recognized
Income earned
2018
$160
2019
$360
2020
$180
Section C:
Selected balance sheet and income statement information for Camden Corporation follows.
Income Statement
Year Ended December 31 (In millions)
Net sales
Products
Service
Cost of sales
Products
Service
Unallocated corporate costs
Other income and (expenses), net
Operating profit
Interest expense
Earnings before taxes
Income tax expense
Net earnings
Balance Sheet
December 31 (In millions)
Assets
Cash and cash equivalents
Short-term investments
Receivables
Inventories
Deferred income taxes
Other current assets
Total current assets
Property, plant and equipment, net
Investments in equity securities
Goodwill
Purchased intangibles, net
Prepaid pension asset
Other assets
Total assets
2017
2016
$ 31,518
5,695
37,213
$ 30,202
5,324
35,526
28,800
5,073
803
34,676
2,537
449
2,986
370
2,616
791
$ 1,825
27,879
4,765
914
33,558
1,968
121
2,089
425
1,664
398
$ 1,266
2017
2016
$ 4,244
429
4,579
1,921
861
495
12,529
3,924
196
10,047
560
1,360
2,728
$ 31,344
$ 3,060
396
4,094
1,864
982
557
10,953
3,599
812
9,492
672
1,030
2,596
$ 29,154
Balance Sheet—continued
December 31 (In millions)
Liabilities and stockholders’ equity
Accounts payable
Customer advances and amounts in excess of
costs incurred
Salaries, benefits and payroll taxes
Current maturities of long-term debt
Other current liabilities
Total current liabilities
Long-term debt
Accrued pension liabilities
Other postretirement
benefit liabilities
Other liabilities
Total liabilities
Stockholders’ equity
Common stock, $1 par value per share
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Other
Total stockholders’ equity
Total liabilities and stockholders’ equity
2017
2016
$ 1,998
$ 1,726
4,331
1,475
202
1,422
9,428
6,284
2,097
4,028
1,346
15
1,451
8,566
6,604
1,660
1,277
2,291
21,377
1,236
1,967
20,033
432
1,724
9,378
(1,553)
(14)
9,967
$ 31,344
438
2,223
8,015
(1,532)
(23)
9,121
$ 29,154
Question 1: Compute
a) ROE for both years (1 point)
b) Nonowners financing for both years (1 point)
c) Write your analysis on the difference on numbers computed in parts a and b. (2 points)
2017
2016
analysis
ROE
Nonwners financing
Good luck
CVS Health Corporation
Consolidated Balance Sheets
In millions
Cash and cash equivalents
Dec. 31,
Dec. 31,
2016
2015
$3,371
$2,459
87
88
Accounts receivable, net
12,164
11,888
Inventories
14,760
14,001
Other current assets
660
722
Total current assets
31,042
29,158
Property and equipment, net
10,175
9,855
Goodwill
38,249
38,106
Intangible assets, net
13,511
13,878
Other assets
1,485
1,440
Total assets
94,462
92,437
Accounts payable
7,946
7,490
Claims and discounts payable
9,451
7,653
Accrued expenses
6,937
6,829
Short-term debt
1,874
0
42
1,197
Total current liabilities
26,250
23,169
Long-term debt
25,615
26,267
Deferred income taxes
4,214
4,217
Other long-term liabilities
1,549
1,542
0
39
17
17
-33,452
-28,886
-31
-31
Short-term investments
Current portion of long-term debt
Redeemable noncontrolling interest
Common stock, par value $0.01
Treasury stock, at cost
Shares held in trust
Capital surplus
Retained earnings
Accumulated other comprehensive
loss
Total CVS Health shareholders’
equity
Noncontrolling interest
31,618
38,983
30,948
35,506
-305
-358
36,830
37,196
4
7
Total shareholders’ equity
36,834
37,203
$94,462
$92,437
Total liabilities and shareholders’
equity
CVS Health Corporation
Consolidated Statements of Income
Dec. 31,
In millions
Growth in net revenues
5.00%
Net revenues
2016
$177,526
Cost of revenues
148,669
Gross profit
Total operating
Loss on early extinguishment of debt…………………………………
$0
expenses
Income tax provision to income before income
38.40%
tax provision Operating profit
28,857
Cost of revenues
Operating expenses to net revenues
Loss from discontinued operations
83.70%
10.40%
$0
A/R to net revenues
6.90%
Inventories to net revenues
8.30%
CAPEX to net revenues
1.70%
Forecasted depreciation expense ($ millions)$1,231
Forecasted amortization of intangible assets ($ $302
millions)
Long-term debt due 2018 ($ millions)
$1,916
A/P to net revenues
4.50%
Claims and discounts payable to net revenues 5.30%
Accrued expenses to net revenues
3.90%
Dividends to net income attributable to CVS 20.00%
Health Corp.
Interest expense, net
Loss on early
extinguishment of
Income before
Income tax
provision
Income from
continuing
Income (loss) from
discontinued
Net income
Net loss attributable
to noncontrolling
Net income
attributable to CVS
18,519
10,338
1,058
643
8,637
3,317
5,320
-1
5,319
-2
$5,317
tion
ents of Income
Dec. 31,
Dec. 31,
2016
2015
$177,526
$153,290
148,669
126,762
28,857
26,528
18,519
17,074
10,338
9,454
1,058
838
643
0
8,637
8,616
3,317
3,386
5,320
5,230
-1
5,319
9
5,239
-2
-2
$5,317
$5,237

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