Introduction
RECALL THAT THE income statement reports a company’s revenues, expenses, and profitability over a specified period of time.
The balance sheet reports the company’s resources (assets) and how those resources were funded (liabilities and shareholders’ equity) on a particular date (end of the quarter or fiscal year) (Exhibit 6.1).
| In millions, except shares and per share amounts | Dec. 31, 2005 | Jan. 1, 2005 | ||
| Assets: | ||||
| Cash and cash equivalents | $513.4 | $392.3 | ||
| Accounts receivable, net | 1,839.6 | 1,764.2 | ||
| Inventories | 5,719.8 | 5,453.9 | ||
| Deferred income taxes | 241.1 | 243.1 | ||
| Other current assets | 78.8 | 66.0 | ||
| Total current assets | 8,392.7 | 7,919.5 | ||
| Property and equipment, net | 3,952.6 | 3,505.9 | ||
| Goodwill | 1,789.9 | 1,898.5 | ||
| Intangible assets, net | 802.2 | 867.9 | ||
| Deferred income taxes | 122.5 | 137.6 | ||
| Other assets | 223.5 | 217.4 | ||
| Total assets | $ 15,283.4 | $ 14,546.8 | ||
| Liabilities: | ||||
| Accounts payable | $2,467.5 | $2,275.9 | ||
| Accrued expenses | 1,521.4 | 1,666.7 | ||
| Short-term debt | 253.4 | 885.6 | ||
| Current portion of long-term debt | 341.6 | 30.6 | ||
| Total current liabilities | 4,583.9 | 4,858.8 | ||
| Long-term debt | 1,594.1 | 1,925.9 | ||
| Other long-term liabilities | 774.2 | 774.9 | ||
| Commitments and contingencies (Note10) | ||||
| Shareholders’ equity: | ||||
| Preferred stock, $0.01 par value: authorized 120,619 shares; no shares issued or outstanding | — | — | ||
| Preference stock, series one ESOP convertible, par value $1.00: authorized 50,000,000 shares; issued and outstanding 4,165,000 shares December 31, 2005 and 4,273,000 shares at January1, 2005 | 222.6 | 228.4 | ||
| Common stock, par value $0.01: authorized1,000,000,000 shares; issued 838,841,000 shares at December 31, 2005 and 828,552,000 shares at January1, 2005 | 8.4 | 8.3 | ||
| Treasury stock, at cost: 24,533,000 shares at December 31, 2005 and 26,634,000 shares at January1, 2005 | (356.5) | (385.9) | ||
| Guaranteed ESOP obligation | (114.0) | (140.9) | ||
| Capital surplus | 1,922.4 | 1,687.3 | ||
| Retained earnings | 6,738.6 | 5,645.5 | ||
| Accumulated other comprehensive loss | (90.3) | (55.5) | ||
| Total shareholders’ equity | 8,331.2 | 6,987.2 | ||
| Total liabilities and shareholders’ equity | $ 15,283.4 | $ 14,546.8 | ||
Source: Used with permission of CVS Corporation. 2005 Annual Report, 2005 10-K, © CVS Corporation, 2005.
Also Referred to As:Statement of Financial Position |
The fundamental balance sheet equation in accounting is:
| Assets = Liabilities + Shareholders’ Equity |
| Resources How Those Resources Are Funded |
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