# McKesson Corporation (MCK) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/MCK/thesis · /stocks/MCK/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: MCK
step: "04"
title: Financial Snapshot — 3-Year P&L Summary
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### 3-Year Income Statement Summary

All figures in USD millions unless noted. McKesson fiscal year ends March 31.

##### Income Statement (GAAP)

| Metric | FY2022 | FY2023 | FY2024 | 2-yr CAGR |
|--------|--------|--------|--------|-----------|
| **Revenue** | $238,228M | $276,251M | $308,952M | +13.8% |
| Cost of Sales | $229,281M | $266,303M | $297,832M | +13.9% |
| **Gross Profit** | $8,947M | $9,948M | $11,120M | +11.6% |
| Gross Margin | 3.75% | 3.60% | 3.60% | — |
| Operating Expenses (SG&A + Amort) | $5,842M | $6,183M | $6,564M | +6.0% |
| Opioid Charges & Restructuring | $274M | $191M | $165M | — |
| **GAAP Operating Income** | $2,831M | $3,574M | $4,391M | +24.5% |
| GAAP Operating Margin | 1.19% | 1.29% | 1.42% | — |
| Interest & Other (net) | ($268M) | ($209M) | ($265M) | — |
| **GAAP Pre-Tax Income** | $2,563M | $3,365M | $4,126M | +26.9% |
| Income Tax Expense | ($639M) | ($862M) | ($993M) | — |
| Effective Tax Rate | 24.9% | 25.6% | 24.1% | — |
| **GAAP Net Income** | $1,707M | $2,306M | $2,859M | +29.4% |
| **GAAP EPS (diluted)** | $11.86 | $16.71 | $21.72 | +35.4% |
| Diluted Shares Outstanding | 143.9M | 138.0M | 131.6M | -4.5% |

##### Adjusted (Non-GAAP) P&L

McKesson's primary reporting metric is Adjusted Operating Profit and Adjusted EPS. These exclude: opioid litigation charges, amortization of acquisition-related intangibles, restructuring charges, and certain discrete tax items.

| Metric | FY2022 | FY2023 | FY2024 | 2-yr CAGR |
|--------|--------|--------|--------|-----------|
| **Adjusted Operating Profit** | $4,146M | $4,440M | $5,100M | +11.1% |
| Adjusted Operating Margin | 1.74% | 1.61% | 1.65% | — |
| Adjusted Interest/Other (net) | ($165M) | ($178M) | ($208M) | — |
| **Adjusted Pre-Tax Income** | $3,981M | $4,262M | $4,892M | +10.8% |
| Adjusted Tax | ($890M) | ($950M) | ($1,116M) | — |
| Adjusted Effective Tax Rate | 22.4% | 22.3% | 22.8% | — |
| **Adjusted Net Income** | $3,091M | $3,312M | $3,776M | +10.4% |
| **Adjusted EPS (diluted)** | $22.95 | $26.00 | $31.22 | +16.7% |

*Note: GAAP EPS grew faster than Adjusted EPS in FY2022→FY2024 due to reversal of prior opioid charge accruals and lower prior-year GAAP base.*

#### Profitability Analysis

##### Margin Structure

McKesson operates with razor-thin margins by design — it is a distribution business where scale, not margin, drives profitability. The key metrics are:

| Metric | FY2022 | FY2023 | FY2024 | Commentary |
|--------|--------|--------|--------|------------|
| GAAP Gross Margin | 3.75% | 3.60% | 3.60% | Stable; slight pressure from branded drug mix |
| Adjusted Operating Margin | 1.74% | 1.61% | 1.65% | Slight recovery as RxTS/Oncology grow |
| RxTS Segment Margin | ~18% | ~19% | ~20% | High-margin software/tech layer |
| US Pharma Segment Margin | ~1.2% | ~1.2% | ~1.2% | Stable distribution margin |
| Med-Surg Segment Margin | ~7.5% | ~6.5% | ~6.4% | Post-COVID normalization pressure |

**Key insight**: Adjusted EPS growing at 16–17% CAGR despite revenue growing at ~14% reflects operating leverage + ~4–5% annual share count reduction via buybacks.

##### EPS Bridge (FY2023 → FY2024)

| Component | Impact on Adjusted EPS |
|-----------|------------------------|
| US Pharma profit growth | +$2.90 |
| RxTS profit growth | +$0.60 |
| Med-Surg profit decline | -$0.50 |
| International improvement | +$0.15 |
| Interest expense (higher debt) | -$0.25 |
| Share count reduction (~5%) | +$1.35 |
| Tax rate change | +$0.97 |
| **Total Adjusted EPS change** | **+$5.22** ($26.00 → $31.22) |

#### Cash Flow Summary

| Metric | FY2022 | FY2023 | FY2024 |
|--------|--------|--------|--------|
| Operating Cash Flow | $4,018M | $4,243M | $4,847M |
| Capital Expenditures | ($594M) | ($705M) | ($831M) |
| **Free Cash Flow** | $3,424M | $3,538M | $4,016M |
| FCF Margin (on revenue) | 1.44% | 1.28% | 1.30% |
| FCF Conversion (FCF/Adj. Net Income) | 110.8% | 106.8% | 106.3% |

**FCF quality**: Highly consistent. FCF slightly exceeds Adjusted Net Income due to working capital benefits (McKesson collects from customers faster than it pays manufacturers in some programs). Capex is primarily IT/distribution infrastructure; moderate and predictable.

#### Balance Sheet Highlights (FY2024)

| Item | Amount | Notes |
|------|--------|-------|
| Cash & Equivalents | $3.8B | Available for buybacks/M&A |
| Total Assets | $67.2B | ~65% current assets (inventory, receivables) |
| Total Debt (gross) | $8.9B | Mix of senior notes, term loans |
| Net Debt | ~$5.1B | Gross debt minus cash |
| Total Equity | $3.2B | Low due to accumulated buybacks reducing book equity |
| Net Debt / Adjusted EBITDA | ~0.9x | Conservative leverage; investment grade |

#### FY2025 and FY2026 Outlook (Consensus/Guidance)

McKesson guided FY2025 Adjusted EPS of $37.00–$37.80 (midpoint ~$37.40), implying ~19–21% growth from FY2024's $31.22.

| Metric | FY2025E | FY2026E |
|--------|---------|---------|
| Revenue | ~$340B | ~$370B |
| Adjusted Operating Profit | ~$5.8B | ~$6.5B |
| Adjusted EPS | ~$37.40 | ~$43.00 |
| EPS Growth | ~20% | ~15% |
| FCF | ~$4.5–5.0B | ~$5.0–5.5B |

*Note: MCK typically guides conservatively and has a multi-year history of beating initial guidance.*

#### Key Financial Ratios

| Ratio | FY2022 | FY2023 | FY2024 |
|-------|--------|--------|--------|
| P/E (GAAP, year-end price) | ~16x | ~18x | ~19x |
| P/E (Adjusted, year-end price) | ~17x | ~18x | ~19x |
| EV/EBITDA | ~14x | ~14x | ~15x |
| Price/FCF | ~17x | ~18x | ~19x |
| Net Debt/EBITDA | 1.1x | 1.0x | 0.9x |
| Dividend Yield | ~0.5% | ~0.5% | ~0.4% |

*Year-end prices approximate based on fiscal year-end (March 31) closing prices.*

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/MCK/fundamental

## Navigation

- Overview: /stocks/MCK
- Financials (this page): /stocks/MCK/financials
- Thesis: /stocks/MCK/thesis
- Investment Memo: /stocks/MCK/memo
- Coverage universe: /stocks