week 4.edited
docx
keyboard_arrow_up
School
University of Phoenix *
*We aren’t endorsed by this school
Course
571
Subject
Finance
Date
Apr 3, 2024
Type
docx
Pages
5
Uploaded by MajorSnake3929
Summative Assessment University of Phoenix Fin/571 Corporate Finance Professor Sommers 12/11/2023
Walgreen information
As society continues to evolve consumers and businesses require more goods and services. In the development stage of an economic cycle, consumers' demands will outweigh the supply of goods, allowing producers to increase their prices resulting in economic inflation.
Previous Economic Condition
In the beginning stage of the pandemic pharmaceutical companies such as Walgreens saw
an increase in sales as consumers began to stock up on medical supplies and other necessities like disinfecting wipes and cleaners. During such time Walgreens filled over 600 million prescriptions showing a 4% increase in Medicaid prescriptions and a 20% increase in Medicare prescriptions which increased the company's divisional pharmacy sales by 39% however the company retail sales, gross profit dollars, and margin are highly competitive in health and beauty
and the company sales continue to remain strong showing an increase in sales by 61% in 2020 with an ROA at -.70% showing a significant decline from the previous year of 4.98% and a difference in net income by –(3526.00).
Economic changes/ company sales The severity, lockdown, and duration of COVID-19 reduced the number of patronages in-person shopping however, the company sales continued to increase as consumers stocked up on personal
protective equipment, vitamins, and other immune boosters as a way of staying healthy. Walgreens 4
th
quarter for 2021 the company filled over 800 million prescriptions whereas pharmacy sales increased by 76% and retail by 24%. Increasing the company's profit by $1,795. The overall pharmaceuticals industry is expected an in 6.1% sales by 2029. However, the
company's net operating income decreased by 23%, and EPS decreased by 18% within the same year. Market condition in 2022 – Present The overall pharmaceutical industry in the United States has emerged as one of the fastest-
growing leading industries in the market at an annual rate of 6.2% with pharmaceutical revenue in the United States at 1245 billion and expected to reach 1589 billion in 2024. Increase pricing on prescription drugs. Walgreens Financial in 2022 – Present Investors are constantly seeking companies that can provide a good growth rate with reasonable/ affordable prices. According to Walgreens's financial in their 4
th
quarter of 2022, they had a price-to-ratio of -10.9 which was a significant change from 2021 when their P/E was
7.03 this reflected some environmental changes such as the recent pandemic. A negative price-
to-ratio indicates the Walgreen had negative earnings in 2022 with an undervalued stock at $22 per share which is 50% below the levels at the end of the 3
rd
quarter in 2021. However, with federal price increases Walgreens (WBA) stock was trading at $35 and is currently 35% below the stock level, the slow sales rate and growth performance is a direct effect of the slow decline in Covid case within the United States and consumers demands for vaccinations, medications, and additional testing and the recent impact on opioid death related cases. Conclude how the market conditions that year influenced the company’s performance, such as interest rates, and pricing.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Inflation rates and other economic issues such as lower tax refund has led consumers to a more discretionary spending habit. In 2021, Walgreens stock was $26.80 the lowest amount for the company in 11 years with a 3.3% decline in sales at its retail division, with the decrease in the company stock also has a reflection on the company's net operating income which shows a decline of 170% from the previous year with an estimated loss of 3 billion dollars. In the previous year, Walgreens had a net operating income of 1.0 billion and a decrease of 30%. The company's net cash from its operating activities was 1.2 billion in the first quarter which was an
increase of 40% from the previous time frame. Conclusion As of today, the company price-to-ratio reflects they are at a loss, compared to this time last year.
The current price-to-ratio indicates the company stock is overvalued compared to the same time last year. The Return on assets tells us how well Walgreens is utilizing its assets to help the company generate additional profit. As of today, the company's return on assets is -$3.17 for investors this is not a good sign compared to previous years when their return on assets was over 5%. This is a clear indicator that the company is not generating efficient income from the use of its assets. As for Walgreens's return on equity currently, as of the 3
rd
quarter of 2023, the company's ROE is -11.03% compared to 2022 with an ROE of 22% the higher the ROE the better look for investors, and the lower risk on investment returns.
Reference
Dukart, H.
,
Lanoue, L.
,
Rezende, M.
, &
RUTTEN, P.
(2022, October).
Emerging from disruption: The future of pharma operations strategy
.
https://www.mckinsey.com/capabilities/operations/our-insights/emerging-from-
disruption-the-future-of-pharma-operations-strategy
Walgreens Boots Alliance, Inc
.
(2023, December 1).
https://finance.yahoo.com/quote/WBA
BARON, C.
(2023).
Revenue of the worldwide pharmaceutical market from 2001 to 2022
. https://www.statista.com/statistics/263102/pharmaceutical-market-worldwide-
revenue-since-2001/
Walgreen Financial Statements2009-2023/WBA
. (n.d.).
MacroTrends. https://www.macrotrends.net/stocks/
charts/WBA/walgreens/financial-statements
Related Questions
PLEASE ANSWER QUESTION B
arrow_forward
Please answer fast please arjent help please
arrow_forward
FE1
Show your work for problem solving questions. If you use one or more sources of information in preparing any answer, provide an APA-style reference, identify any quoted information, and cite a reference wherever it is used.
How would each of the following events change the equilibrium financial market value of a company? (a)an increase in its cost of production; (b) an increase in its cost of financing; (c) an increase in the market’s discount rate; (d) an increase in its sales revenue; and (e) an increase in its projected future profits.
arrow_forward
Chapter 17
1.
Suppose the consumption function is
C= $400 billion + 0.8Y
and the government wants to stimulate the economy. By how much will aggregate demand
at current prices increase with each of the following options?
(a) A S50 billion increase in government purchases
(b) A S50 billion increase in income transfers
arrow_forward
COVID-19 Pandemic: Learning Lessons and a Vision for a Better Health System
The fight against COVID-19 is ongoing and will require a great deal more effort and coordination through local and global initiatives. It is clear that the outbreak will have a lasting impact on healthcare investments and delivery models for many years to come. The COVID-19 pandemic has driven the world into another recession. For 2020, it will be worse than the global financial crisis of 2008. The economic damage is mounting across multiple sectors and across the globe. In Oman, the first two cases of COVID-19 were reported on 24 February 2020 in the capital city Muscat, linked to travel to Iran. Therefore, equipped with lessons from the pandemic, health leaders and health-policy-makers should be urged to proactively argue the economic case for continuing to increase investment in healthcare. The following lessons are early reflections from the pandemic to help strive for better health systems.
Strengthening…
arrow_forward
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
arrow_forward
c. Which of the following correctly identifies a risk facing SSC that might adversely affect sales during the coming years?
Multiple Choice
A general slowdown in the economy.
Sales to many smaller customers other than Wingo Corporation.
Increased attention to developing new products.
A board of directors dominated by management.
pdf
Untitled docume....pdf
*led d ocume
arrow_forward
I want answer with detailed explanation
arrow_forward
Finance question
arrow_forward
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
arrow_forward
??
arrow_forward
1. Interactions between financial market participants
Financial markets facilitate the transfer of excess funds from those who have them to those who need them.
In the following table, determine whether each financial market participant is a surplus unit or deficit unit.
Financial Market Participant
A state that is constantly running a budget deficit
A firm that issues equity securities to expand operations
A consumer that purchases equity securities from a new tech company
Surplus Unit Deficit Unit
S
An angel investor
Suppose Moonlit Productions needs to raise money to finance its new manufacturing facility, but their CFO does not want to part with any of the firm's
equity. In this case, Moonlit Productions would likely issue
securities to obtain the funding.
Which of the following are ways that Moonlit Productions could obtain funds to finance the expansion of its operations, given its stated preference in
the previous question? Check all that apply.
Issue common stocks
Issue…
arrow_forward
Under Armour's Strategy in 2019: Its Struggle to Revive North
American Sales and Profitability
These point should be put in your answer (1) Company's current performance;
(2) Strategic Position; (3) External/Internal Environment; &
(4) Recommended Strategy
arrow_forward
Risk analysis Green Energy is considering expanding its investment in renewable energy generation. Two possible types, wind and solar, of energy generation are under review. After investigating the possible outcomes, the company made the estimates shown in the following table:
wind farm solar farm
initial investment 120 million 120 million
annual rate of return
pessimistic 4% -6%
most likely 20% 20%
optimistic 36% 46%
The pessimistic and optimistic outcomes occur with a probablity of 25%, and the most likely outcome occurs with a probability of 50%.
a. Determine the range of the rates of return for each of the two projects.
b. Which project is less risky?
c. If you were making the investment decision, which one would you choose? What does this imply about your feelings…
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you

Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub

Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Related Questions
- PLEASE ANSWER QUESTION Barrow_forwardPlease answer fast please arjent help pleasearrow_forwardFE1 Show your work for problem solving questions. If you use one or more sources of information in preparing any answer, provide an APA-style reference, identify any quoted information, and cite a reference wherever it is used. How would each of the following events change the equilibrium financial market value of a company? (a)an increase in its cost of production; (b) an increase in its cost of financing; (c) an increase in the market’s discount rate; (d) an increase in its sales revenue; and (e) an increase in its projected future profits.arrow_forward
- Chapter 17 1. Suppose the consumption function is C= $400 billion + 0.8Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices increase with each of the following options? (a) A S50 billion increase in government purchases (b) A S50 billion increase in income transfersarrow_forwardCOVID-19 Pandemic: Learning Lessons and a Vision for a Better Health System The fight against COVID-19 is ongoing and will require a great deal more effort and coordination through local and global initiatives. It is clear that the outbreak will have a lasting impact on healthcare investments and delivery models for many years to come. The COVID-19 pandemic has driven the world into another recession. For 2020, it will be worse than the global financial crisis of 2008. The economic damage is mounting across multiple sectors and across the globe. In Oman, the first two cases of COVID-19 were reported on 24 February 2020 in the capital city Muscat, linked to travel to Iran. Therefore, equipped with lessons from the pandemic, health leaders and health-policy-makers should be urged to proactively argue the economic case for continuing to increase investment in healthcare. The following lessons are early reflections from the pandemic to help strive for better health systems. Strengthening…arrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forward
- c. Which of the following correctly identifies a risk facing SSC that might adversely affect sales during the coming years? Multiple Choice A general slowdown in the economy. Sales to many smaller customers other than Wingo Corporation. Increased attention to developing new products. A board of directors dominated by management. pdf Untitled docume....pdf *led d ocumearrow_forwardI want answer with detailed explanationarrow_forwardFinance questionarrow_forward
- help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forward??arrow_forward1. Interactions between financial market participants Financial markets facilitate the transfer of excess funds from those who have them to those who need them. In the following table, determine whether each financial market participant is a surplus unit or deficit unit. Financial Market Participant A state that is constantly running a budget deficit A firm that issues equity securities to expand operations A consumer that purchases equity securities from a new tech company Surplus Unit Deficit Unit S An angel investor Suppose Moonlit Productions needs to raise money to finance its new manufacturing facility, but their CFO does not want to part with any of the firm's equity. In this case, Moonlit Productions would likely issue securities to obtain the funding. Which of the following are ways that Moonlit Productions could obtain funds to finance the expansion of its operations, given its stated preference in the previous question? Check all that apply. Issue common stocks Issue…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT

Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub

Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT