Tony Tian

[Tony Tian @Sum20CVSCFO1]

@ProfLowell CVS currently seems to be in a solid state without need of raising extra capital as can be seen by its ability to bring on 50,000 new hires as well as returning its COVID stimulus funds. #Fin2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell Recently CVS hired 50,000 new workers due to increased demand and traffic from COVID-19. Some of these jobs will be temporary while others long-term. CVS is also offering bonuses to current employees. #Fin2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell CVS saw a massive increase in short term investments from 2017 to 2018, from $111M to $2.52B most likely due to the merger with Aetna at the time. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell CVS took on a massive amount of debt beginning in the 2018 year, raising its D/E ratio from 0.59 to 1.59. Currently, it is sitting at 1.29. This massive bump in debt was due to CVS's bid to acquire Aetna at the time. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell Since April 2017, the dividend amount has been $0.50. The yield% of this dividend however has varied from as low as 2.5% to as high as 3.8%. The most recent quarter was a 3.3% yield. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell Since IPO, CVS has had a steady increase in dividend payout, starting from $.125 to the most recent increase of $0.50 3 years ago. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell CVS yearly IRR have outperformed health sector ETFs over the past month but have under performed vs the SP500. However compared to 3,5,and 10 years past, CVS has under performed vs both. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell CVS hit lows of $52.04 in mid-march and has recovered to $65.64 as of June 1st bringing an excellent return of $13.60 in a matter of 2.5 months. One could expect further recovery as CVS is an essential part of COVID recovery. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell For current YTD, CVS stock has brought a return of -8.52$ for investors. This can primarily be blamed on the downturn of the overall market from COVID19. #FIN2209

[Tony Tian @Sum20CVSCFO1]

This action brings good PR for the company and it showcases that CVS seems to be staying strong through the pandemic without the need of this federal financial support. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell Recently, CVS announced it will be returning more than $43mil it received as part of the federal CARES act in hopes of it being able to help other institutions facing more pressing financial pressure from the pandemic. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell While CVS has seen overall growth over the past year in stock price despite the recent downturn, the 5 year chart displays a different story of around a 40% decrease in share price over time. CVS needs to find a way to turn their trend around. #FIN2209

[Tony Tian @Sum20CVSCFO1]

@ProfLowell It will be interesting to see the final results of COVID on businesses like eToys that have been operating with an assumed growing or steady market that has now been shattered. Have these businesses prepared for market downturns or will they bankrupt.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell According to analysts, eToys went bankrupt because they were operating without room for a dip in sales and overall retailer climate. It grew too ambitiously without a base to fall back on.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell With an annual rate of return of 4%, she would need to invest $11,567.44 yearly, more than 10x the original amount, to achieve the previous FV.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell She could invest more money every year, suppose $1500 per year instead of $1095. She could also invest the money in monthly increments instead of waiting to the end of the year. Especially since it is unrealistic to achieve a 12% return in today's climate.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell Assuming the student invests $1095 every year into her brokerage account, the FV of her investment should be worth $1,487,261.89 by the time she is 65 years old. If she only invested an initial $1095 and left it, it would be worth 179,566.43 by age 65.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell For 2019, CVS reported gross profit margins of 17.41%, up from previous years around 15-16%. Compared to one of their biggest competitors in WBA, CVS's gross profit margins are significantly smaller as WBA reported 21.97% for 2019.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell CVS reports current ratio of 0.94 for 2019, higher than sector average of 0.87. It also reports quick ratio of 0.52, higher than sector average of 0.45. Both ratios have seen steady decrease over the past 5 years from 1.31 and 0.62 respectively.

[Tony Tian @Sum20CVSCFO1]

@ProfLowell I am choosing CVS because I am a pharmacy major and am interested in the business/financial sides of pharmacies too. It will also be interesting to see how they have been affected by COVID-19.