Question: Based upon the data shown in Exercises I and II, comment on the operating performance of CVS in comparison to Walgreen.
Exercises I: CVS Corporation operates drugstores throughout the United States, selling prescription drugs, general merchandise, cosmetics, greeting cards, food, and beverages. For 2004, CVS reported (in thousands) net sales of $30,594,300, cost of sales of $22,563,100, and operating income of $1,454,700.
a. Determine CVS's gross profit.
b. Determine the gross profit as a percent of net sales. Round to one decimal place.
c. Determine the operating income as a percent of net sales. Round to one decimal place.
Exercises II: Walgreen Company operates drugstores throughout the United States, selling prescription drugs, general merchandise, cosmetics, food, and beverages. For 2004, Walgreen reported (in thousands) net sales of $37,508,200, cost of sales of $27,310,400, and operating income of $2,126,100.
a. Determine Walgreen's gross profit.
b. Determine the gross profit as a percent of net sales. Round to one decimal place.
c. Determine the operating income as a percent of net sales. Round to one decimal place.