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Cvs

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Accounting

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Name of the Company- CVS

CVS Health is an American organization which provides health care and is also a Retailer

Company.

Revenue, also called sales, is all the money the company has collected from sales, fees, interest,

dividends, and rents for producing goods or rendering services. Revenues for 2013: $126,761

million. While there appears to be a continued growth trend in revenues from 2009 to 2013, it

has slowed from almost 15% in 2012 to just under 3% in 2013.

Liabilities

CVS listed their liabilities as: Accounts payable; Claims and discounts payable; Accrued

expenses; Short-term debt; Current portion of long-term debt; Long-term debt; Deferred income

taxes; & Other long-term liabilities (CVS Caremark, n.d.). There was no short-term debt reported

in 2013 on CVS’s balance sheet, but all other current liabilities have increased from the 2012.

The largest rise was in long-term debt by 8% however, their current ratio has improved from

1.43 to 1.64 as well as their acid-test ratio from .645 to .926 meaning that their assets has seen

substantial growth.

Contingencies

A contingency is an existing situation that may or may not occur, a condition that must be met in

order for a contract to be legally binding, or circumstance involving uncertainty on the chance of

a gain or loss that may be resolved in the future. Reading the financial statements without these

notes would leave potential investors and creditors unaware of these events and possible

financial requirements that may change the value of their holdings within a specified period.

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Any gains/ losses and how they affect the company.

CVS Caremark recorded lease guarantees as well as legal matters under note 12- commitments

and contingencies. It listed 11 different legal matters that it is currently involved in, but states

that they “are subject to significant uncertainties and (they) are unable to reasonably estimate a

possible loss”. Each one is described and listed under the heading “Commitments and

Contingencies- Legal Matters” under notes on pages 82-85 of the SEC 10K.

Investments and Revenue Recognition

Companies can have two types of investments, short-term and long-term. Short term investments

are held for short periods, usually less than a year and/ or intends to convert them to cash soon;

they are reported as a current asset. However, long-term investments are reported under the

Investments section of the balance sheet and are held for many years. The company recognizes

(reports) interest when it is earned and gains or loss only when sold.

Revenue Recognition

CVS Caremark discloses that there are different segments used in their accounting policies. They

separate the pharmacy services from the retail segment.. The Pharmacy side has a few more

recognition issues.

Capital stock and Retained Earnings

Common stockholders have voting rights on the company’s board of directors but preferred

shareholders do not.

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Name of the Company- CVS CVS Health is an American organization which provides health care and is also a Retailer Company. Revenue, also called sales, is all the money the company has collected from sales, fees, interest, dividends, and rents for producing goods or rendering services. Revenues for 2013: $126,761 million. While there appears to be a continued growth trend in revenues from 2009 to 2013, it has slowed from almost 15% in 2012 to just under 3% in 2013. Liabilities CVS listed their liabilities as: Accounts payable; Claims and discounts payable; Accrued expenses; Short-term debt; Current portion of long-term debt; Long-term debt; Deferred income taxes; & Other long-term liabilities (CVS Caremark, n.d.). There was no short-term debt reported in 2013 on CVS’s balance sheet, but all other current liabilities have increased from the 2012. The largest rise was in long-term debt by 8% however, their current ratio has improved from 1.43 to 1.64 as well as their acid-test ratio from .645 to .926 meaning that their assets has seen substantial growth. Contingencies A contingency is an existing situation that may or may not occur, a condition that must be met in order for a contract to be legally binding, or circumstance involving uncertainty on the chance of a gain or loss that may be resolved in the future. Reading the financial statements without these notes would leave potential investors and creditors unaware of these events and possible financial requirements that may ...
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Tags: accounting Statement SEC cvs