Elevance Health Inc. (NYSE:ELV)

Goodwill and intangible assets exhibited notable fluctuations over the five-year period. Overall, the combined value of these assets increased from approximately US$34.8 billion in 2021 to US$39.5 billion in 2025, though not consistently.

Goodwill

Goodwill demonstrated a consistent upward trend, increasing from US$24.2 billion in 2021 to US$28.3 billion in 2025. The most significant increase occurred between 2022 and 2023 (US$934 million) and again between 2023 and 2024 (US$2,960 million), suggesting potential acquisitions or reassessments of fair value during those periods.

Intangible Assets with Finite Lives

The gross carrying amount of intangible assets with finite lives increased from US$6.5 billion in 2021 to US$8.7 billion in 2024, before decreasing to US$6.2 billion in 2025. Accumulated amortization also increased steadily from US$3.5 billion in 2021 to US$4.5 billion in 2024, then decreased to US$3.2 billion in 2025. Consequently, the net carrying amount of these assets followed a more volatile pattern, rising from US$3.0 billion in 2021 to US$4.2 billion in 2024, and then declining to US$3.0 billion in 2025. The 2025 decrease in both gross carrying amount and accumulated amortization suggests potential asset disposals or impairment.

Customer Relationships

Customer relationships experienced growth from US$5.6 billion in 2021 to a peak of US$7.9 billion in 2024, before decreasing substantially to US$5.5 billion in 2025. This fluctuation could be attributed to changes in customer base valuation, acquisition activity, or write-downs.

Intangible Assets with Indefinite Lives

Intangible assets with indefinite lives remained relatively stable between 2021 and 2023 at approximately US$7.5 billion. A moderate increase was observed in 2024 (US$7.9 billion) and continued into 2025 (US$8.2 billion). This suggests consistent value in long-term intangible assets like trademarks and licenses.

Other Intangible Assets

Other intangible assets showed an initial decrease from US$10.6 billion in 2021 to US$10.3 billion in 2022, followed by an increase to US$12.1 billion in 2024, and a subsequent decrease to US$11.2 billion in 2025. This category appears to be the most volatile, potentially encompassing a diverse range of assets subject to frequent valuation adjustments.

The combined value of goodwill and other intangible assets increased overall, but the composition shifted significantly. The substantial increases in goodwill and certain finite-lived intangible assets in 2024 were partially offset by declines in 2025, particularly within customer relationships and other intangible assets. These changes warrant further investigation to understand the underlying drivers and potential implications for future financial performance.

An examination of the financial information reveals a significant adjustment related to goodwill and intangible assets, impacting reported asset and equity values. Over the five-year period, reported total assets demonstrate a consistent upward trend, increasing from US$97,460 million in 2021 to US$121,494 million in 2025. However, adjusted total assets, reflecting the removal of goodwill, present a more moderate growth pattern, rising from US$73,232 million to US$93,150 million during the same timeframe.

Shareholders’ equity also exhibits an overall increase when reported, moving from US$36,060 million in 2021 to US$43,882 million in 2025. The adjusted shareholders’ equity, however, shows a more volatile pattern. While increasing from US$11,832 million in 2021 to US$13,989 million in 2023, it declines to US$13,038 million in 2024 before recovering to US$15,538 million in 2025.

Reported shareholders’ net income remains relatively stable throughout the period, fluctuating between US$5,662 million and US$6,104 million. The adjusted shareholders’ net income mirrors this trend for the majority of the period, with a notable increase to US$6,086 million in 2024, before returning to US$5,662 million in 2025.

Asset Impact

The difference between reported and adjusted total assets widens over time, indicating a substantial amount of goodwill initially present on the balance sheet. The removal of this goodwill results in a significantly lower asset base. The growth rate of adjusted assets is consistently lower than that of reported assets, suggesting that a considerable portion of the reported asset growth is attributable to goodwill rather than organic asset accumulation.

Equity Impact

The adjustment to shareholders’ equity is substantial, reducing the reported equity position significantly. The fluctuation in adjusted shareholders’ equity, particularly the decline in 2024, warrants further investigation. This could be due to specific impairment charges or other adjustments related to intangible assets impacting equity.

Net Income Impact

The adjusted net income is identical to the reported net income for most years, except for 2024. The increase in adjusted net income in 2024 suggests that the removal of goodwill or related amortization expenses positively impacted earnings in that year. This could be due to the elimination of non-cash charges associated with the goodwill.

In summary, the adjustments made for goodwill and intangible assets have a material effect on the reported financial position and, to a lesser extent, the reported financial performance. The consistent difference between reported and adjusted figures highlights the importance of understanding the composition of the company’s assets and equity, and the potential impact of goodwill impairment on future financial results.

The financial metrics demonstrate a significant impact from adjusting for goodwill and intangible assets. Reported ratios generally exhibit more moderate changes compared to their adjusted counterparts, suggesting that goodwill and intangibles represent a substantial portion of the company’s reported assets. A consistent pattern emerges where adjustments lead to notably higher values for profitability and efficiency ratios, while financial leverage also increases substantially upon adjustment.

Profitability

Reported net profit margin experienced a gradual decline from 4.46% in 2021 to 2.87% in 2025. The adjusted net profit margin remained consistent with the reported margin across the period, indicating that goodwill and intangible assets do not materially affect net income. However, the adjusted Return on Equity (ROE) shows a much more pronounced decrease, falling from 51.59% in 2021 to 36.44% in 2025, while the reported ROE decreased from 16.93% to 12.90% over the same period. Similarly, the adjusted Return on Assets (ROA) decreased from 8.34% to 6.08%, a larger change than the reported ROA’s decline from 6.26% to 4.66%. This suggests that the removal of goodwill and intangibles significantly reduces the asset base against which profits are measured, leading to a higher, but ultimately declining, profitability picture when adjusted.

Asset Efficiency

Reported total asset turnover increased from 1.41 in 2021 to 1.63 in 2025, indicating improving efficiency in asset utilization. The adjusted total asset turnover shows a more substantial increase, moving from 1.87 in 2021 to 2.12 in 2025. This difference highlights that the inclusion of goodwill and intangibles in the reported asset base artificially lowers the turnover ratio. The adjusted ratio provides a clearer picture of how efficiently the company generates sales from its operating assets.

Financial Leverage

Reported financial leverage remained relatively stable, fluctuating between 2.70 and 2.83 over the period. In contrast, adjusted financial leverage exhibited a more significant range, increasing from 6.19 in 2021 to 6.80 in 2024 before decreasing slightly to 5.99 in 2025. This substantial difference indicates that goodwill and intangible assets reduce the reported level of debt relative to assets. Removing these items reveals a considerably higher degree of financial leverage, suggesting a greater reliance on debt financing when considering the true economic scale of the assets.

In summary, the adjustments for goodwill and intangible assets reveal a fundamentally different financial profile. While reported ratios suggest moderate performance, the adjusted ratios indicate a more substantial, though declining, profitability and efficiency, coupled with a significantly higher level of financial leverage. This suggests that the company’s reported financial position is materially influenced by the accounting treatment of these assets.

Analysis of the presented financial information reveals consistent trends in both reported and adjusted shareholders’ net income and associated profit margins over the five-year period. While both reported and adjusted net income exhibit relative stability, a subtle decline is observable towards the end of the period. The adjusted net profit margin mirrors this pattern, demonstrating a gradual decrease over time.

Shareholders’ Net Income

Reported shareholders’ net income remained relatively flat between 2021 and 2023, fluctuating around US$6.0 billion. A slight decrease is noted in 2024, followed by a more pronounced decline in 2025 to US$5.662 billion. Adjusted shareholders’ net income follows a similar trajectory, with a minor increase in 2024 before decreasing in 2025.

Reported Net Profit Margin

The reported net profit margin experienced a consistent downward trend, decreasing from 4.46% in 2021 to 2.87% in 2025. The decline was most significant between 2021 and 2022, followed by more gradual decreases in subsequent years. The margin stabilized at 2.87% in the final year of the period.

Adjusted Net Profit Margin

The adjusted net profit margin exhibits a pattern nearly identical to the reported net profit margin. It decreased from 4.46% in 2021 to 2.87% in 2025, with a similar pattern of decline over the years. The adjusted margin also stabilized at 2.87% in 2025. The consistency between reported and adjusted margins suggests that adjustments made to net income do not materially impact the overall profitability trend.

In summary, the financial information indicates a gradual erosion of profitability as measured by both reported and adjusted net profit margins. While net income remained relatively stable for the majority of the period, the declining margins suggest increasing cost pressures or decreasing revenue growth. The stabilization of margins at 2.87% in 2025 warrants further investigation to determine if this represents a new normal or a temporary plateau.

An examination of the financial information reveals increasing trends in both reported and adjusted total assets over the five-year period. However, the adjusted total asset turnover ratio demonstrates a more pronounced and consistent upward trajectory than the reported ratio.

Reported Total Assets

Reported total assets increased steadily from US$97,460 million in 2021 to US$121,494 million in 2025. The largest year-over-year increase occurred between 2023 and 2024, with an addition of US$7,961 million. Growth was consistent, though slightly decelerating in the final observed year.

Adjusted Total Assets

Adjusted total assets also exhibited a consistent increase, rising from US$73,232 million in 2021 to US$93,150 million in 2025. Similar to reported assets, the most substantial increase was observed between 2023 and 2024, adding US$5,001 million. The adjusted asset base consistently remained lower than the reported asset base throughout the period.

Reported Total Asset Turnover

The reported total asset turnover ratio showed an initial increase from 1.41 in 2021 to 1.56 in 2023, indicating improved efficiency in generating revenue from reported assets. However, the ratio decreased slightly to 1.50 in 2024 before recovering to 1.63 in 2025. This suggests some fluctuation in the efficiency of asset utilization when considering the reported asset base.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio demonstrated a more consistent upward trend, increasing from 1.87 in 2021 to 2.12 in 2025. This indicates a continuous improvement in the efficiency of revenue generation when considering the adjusted asset base. A slight dip occurred in 2024, falling to 1.98, but the ratio quickly rebounded in the following year. The adjusted ratio consistently exceeded the reported ratio, suggesting that the adjustments made to total assets provide a more accurate representation of the assets actively contributing to revenue generation.

The divergence between the reported and adjusted asset turnover ratios suggests that a significant portion of the reported total assets may not be directly contributing to revenue generation, or that the adjustments made to calculate adjusted total assets more accurately reflect the assets utilized in core business operations. The consistent increase in the adjusted ratio is a positive indicator of improving operational efficiency.

An examination of the financial information reveals distinct trends in both reported and adjusted asset and equity figures over the five-year period. The adjusted financial leverage ratio demonstrates more pronounced fluctuations than its reported counterpart, suggesting a significant impact from the adjustments made to assets and equity.

Total Assets

Reported total assets exhibit a consistent upward trend, increasing from US$97,460 million in 2021 to US$121,494 million in 2025. This represents a cumulative growth of approximately 24.6%. Adjusted total assets also increase over the same period, moving from US$73,232 million to US$93,150 million, a growth of roughly 27.2%. The difference between reported and adjusted total assets widens over time, indicating a growing proportion of assets are being adjusted.

Shareholders’ Equity

Reported shareholders’ equity shows a steady, albeit moderate, increase from US$36,060 million in 2021 to US$43,882 million in 2025, representing a growth of approximately 21.7%. Adjusted shareholders’ equity demonstrates a more volatile pattern. While it increases from US$11,832 million in 2021 to US$15,538 million in 2025, there is a decrease observed between 2023 (US$13,989 million) and 2024 (US$13,038 million). The disparity between reported and adjusted equity is substantial and remains consistently large throughout the period.

Financial Leverage

Reported financial leverage remains relatively stable, fluctuating between 2.70 and 2.83 over the five years. In contrast, adjusted financial leverage exhibits greater variability. It begins at 6.19 in 2021, rises to 6.80 in 2024, and then decreases to 5.99 in 2025. The adjusted leverage ratio is consistently higher than the reported ratio, indicating that the company’s financial risk is considerably greater when considering the adjustments made to assets and equity. The peak in adjusted financial leverage in 2024 warrants further investigation to understand the underlying drivers of this increase.

The adjustments to both total assets and shareholders’ equity significantly impact the calculated financial leverage. The increasing difference between reported and adjusted figures suggests that intangible assets and/or goodwill may be a substantial component of the reported asset base, and that the adjustments reflect a more conservative valuation of these items. The fluctuations in adjusted financial leverage highlight the sensitivity of this metric to changes in the adjusted equity base, particularly the decrease observed between 2023 and 2024.

Analysis reveals significant divergence between reported and adjusted return on equity (ROE) figures over the five-year period. While reported ROE demonstrates a consistent, albeit gradual, decline, adjusted ROE exhibits substantial fluctuations.

Reported ROE

Reported ROE decreased steadily from 16.93% in 2021 to 12.90% in 2025. This represents a cumulative decrease of approximately 4.03 percentage points over the period. The rate of decline appears relatively consistent year-over-year.

Adjusted ROE

Adjusted ROE began at a considerably higher level of 51.59% in 2021, then decreased to 50.53% in 2022, followed by a more pronounced drop to 42.80% in 2023. A partial recovery was observed in 2024, with adjusted ROE increasing to 46.68%, but this was followed by another decline to 36.44% in 2025. This indicates considerable volatility in the adjusted ROE, with a net decrease of 15.15 percentage points from 2021 to 2025.

The difference between reported and adjusted ROE is substantial. This suggests that adjustments to shareholders’ equity have a significant impact on profitability metrics. Reported shareholders’ equity increased consistently throughout the period, while adjusted shareholders’ equity experienced fluctuations, decreasing from 2023 to 2024 before increasing again in 2025. This pattern in adjusted shareholders’ equity likely contributes to the volatility observed in adjusted ROE.

Net Income

Reported shareholders’ net income remained relatively stable between 2021 and 2024, fluctuating within a narrow range around US$6.0 billion. A decrease to US$5.662 billion was observed in 2025. Adjusted shareholders’ net income mirrored this trend, with the same decrease in 2025. The consistency in net income suggests that changes in ROE are primarily driven by changes in shareholders’ equity rather than profitability.

The considerable difference between reported and adjusted ROE warrants further investigation into the nature of the adjustments made to shareholders’ equity. Understanding these adjustments is crucial for a comprehensive assessment of the company’s financial performance and underlying economic reality.

Analysis reveals distinct trends in shareholders’ net income and total assets between 2021 and 2025. While reported figures demonstrate moderate growth in total assets alongside relatively stable net income, adjusted figures present a more nuanced picture of underlying performance. The adjusted return on assets (ROA) consistently exceeds the reported ROA throughout the period, suggesting that adjustments to asset valuation significantly impact profitability metrics.

Shareholders’ Net Income

Reported shareholders’ net income exhibits a slight decline over the five-year period, decreasing from US$6,104 million in 2021 to US$5,662 million in 2025. The adjusted shareholders’ net income mirrors this trend, with a similar decrease from US$6,104 million to US$5,662 million. A minor increase is observed in the adjusted net income in 2024, reaching US$6,086 million, before returning to the 2021-2023 level in 2025.

Total Assets

Reported total assets show a consistent upward trend, increasing from US$97,460 million in 2021 to US$121,494 million in 2025. However, adjusted total assets, while also increasing, demonstrate a more moderate growth rate, rising from US$73,232 million in 2021 to US$93,150 million in 2025. This difference between reported and adjusted asset values indicates the presence of significant items, such as goodwill and intangible assets, impacting the reported figures.

Reported Return on Assets (ROA)

The reported ROA experiences a steady decline from 6.26% in 2021 to 4.66% in 2025. This downward trend suggests diminishing profitability relative to the reported asset base. The rate of decline decelerates slightly between 2024 and 2025.

Adjusted Return on Assets (ROA)

The adjusted ROA also exhibits a declining trend, though at a slower pace than the reported ROA. It decreases from 8.34% in 2021 to 6.08% in 2025. The adjusted ROA remains notably higher than the reported ROA throughout the period, indicating that the adjustments made to total assets result in a more favorable profitability assessment. The increase in adjusted ROA from 6.87% in 2024 to 6.08% in 2025 is less pronounced than the decrease observed in the reported ROA during the same period.

The divergence between reported and adjusted ROA highlights the importance of considering the impact of goodwill and intangible assets on overall financial performance. The consistent difference suggests these items are substantial and their valuation significantly influences the reported profitability. The slower decline in adjusted ROA indicates that underlying operational profitability, when excluding the impact of these adjustments, is more resilient than the reported figures suggest.