CVS Pharmacy Financial Statement Essay Example

where over the years, the gross revenues have been growing.

On a similar note, the gross profit from their daily operations has increased substantially and this is a promising trend for the organization as it shows positive performance and acceptability of the products by the consumers in the market. Since the organization deals with health products, it is an evidence of trust from the patients and customers that their products are reliable (Henry, 2015).

Remarkably, the net income has also increased substantially over the years and this shows the effectiveness of the managerial decisions as well as excellent performance sign for the organization. Generally, it is a sign that the organization has had an awesome time in their daily operations hence enjoyed the remarkable performance. Therefore, the impressive results for the previous accounting periods can be attributed to proper integration of the organizational resources and managerial decisions (Henry, 2015).

Balance sheet

Balance sheet is also known as the statement of financial position for the organization. It clearly shows the financial performance of various sectors in the organization. The various elements of the balance sheet are the assets. These indicate the organizational worth and endowment. They are those long term and current assets that the organization has exclusive right to utilize for the purpose of expanding the business operations. Current assets are those assets that the organization can easily dispose to realize cash for the purpose of expanding business activities or meeting its obligations.

Equities and liabilities are the other aspects of the balance sheet. The liabilities are the dues that the organization is owed by other stake holders like creditors. Loans from bank and other financial institutions are regarded as

liabilities. There are short term and long term liabilities. Short term are those liabilities that can be settled within a very short period of time while long term are the liabilities that take more than one year to settle. Equities on the other hand equities are those funds that are contributed by the owners of the business (Healy, 2012).

The analysis of financial statement for the company over the years shows that the organization has had an excellent performance. The net performance of the assets shows that the company has stabilized. The total assets have increased gradually hence an indicator that its stability is increasing over the years. Due to the growing size of the organization, the organization has been forced to incur more hence the increase in the liabilities over the years. The balance sheets indicate that the organization is in a stable position to meet its obligations. The current and potential investors use audited report in making their investment decisions. Audited financial statements give surety and authenticity of the information presented in the financial statements. It is imperative to note that financial statements need to be prepared with at most due care and diligence hence get away with unnecessary liabilities to the potential users of the financial statements (Henry, 2015).

Cash flow analysis

This is a financial statement that indicates the flow of funds from various sources and how they have been utilized in the organization. The various aspects that are considered are the operating activities, investing, and financing activities. The operational performance of the organization has been relatively stable s indicated in the financial statement. However, there are remarkable improvements in the performance as there

is net increment in the cash from the operating activities (Healy, 2012).

However, there is sharp irregular performance in the trend for the investing activities performance. The negative trend in the performance of the investing activities is an indication that the organization has been heavily investing in the past five years hence the performance of the investments has not yet reached to breakeven point to realize profits.

Remarkably, the organizational income from the financial activities is impressive with the ultimate performance in the current accounting period indicating positive performance trend. Therefore, this is an indication of prudent cash utilization. Overly the net performance as indicated by the cash and cash related activities indicate a positive performance by the organizational activities.

Conclusion

It is imperative that organizations should always establish sound financial department responsible for all financial operations. This ensures that there are no discrepancies in the activities and accountability is always maintained. Furthermore, sound financial department ensures that accuracy is always upheld and investment decisions are made in line to the organizational objectives. this ensures that organizational goals are easily achieved.

References

• Healy, P. M., & Palepu, K. G. (2012). Business Analysis Valuation: Using Financial Statements.
  Cengage Learning.
• Henry, E., & Robinson, T. R. (2015). Chapter 1. Financial Statement Analysis: An
  Introduction. CFA Institute Investment Books, 2015(2), 1-35.