Elevance Health Inc. (NYSE:ELV)

The financial data exhibits several notable trends over the five-year period analyzed.

Net Operating Profit After Taxes (NOPAT)

The company's NOPAT increased significantly from 4,739 million USD in 2020 to 7,193 million USD in 2021, representing strong profitability growth. However, after a slight decline to 6,841 million USD in 2022, the NOPAT continued to decrease in 2023 to 6,415 million USD before recovering slightly to 7,015 million USD in 2024. Overall, the NOPAT shows volatility but remains substantially higher in the later years compared to 2020.

Cost of Capital

The cost of capital demonstrated an upward trend from 10.6% in 2020 to a peak of approximately 11.52% in 2022 and 2023. It then decreased somewhat to 10.8% in 2024. This indicates increasing capital costs over the initial years, which then moderated slightly in the final year.

Invested Capital

The invested capital has steadily grown throughout the period, increasing from 56,634 million USD in 2020 to 78,241 million USD in 2024. This steady upward trajectory suggests ongoing capital investment or asset growth within the company.

Economic Profit

Economic profit remained negative for most of the period, with an exception in 2021 where a marginal positive value of 57 million USD was recorded. After 2021, economic profit declined substantially, reaching -1,613 million USD in 2023 and slightly improving to -1,439 million USD in 2024. This persistent negative economic profit indicates that despite positive operating profits, the returns do not sufficiently exceed the cost of capital, reflecting value destruction during most of the assessed years.

In summary, while operating profit after taxes has generally improved with some fluctuations, the rising cost of capital combined with increased invested capital has resulted in predominantly negative economic profit throughout the period. This suggests that the company is struggling to generate returns above its cost of capital, pointing to potential challenges in value creation despite growing scale and revenue-generating capability.

Shareholders’ Net Income

The shareholders’ net income exhibited an upward trend from 2020 to 2021, increasing significantly from 4,572 million USD to 6,104 million USD. However, this upward momentum did not sustain in the following years. From 2021 to 2022, net income slightly decreased to 6,025 million USD, followed by a marginal decline in 2023 to 5,987 million USD. By the end of 2024, the figure remained relatively stable at 5,980 million USD, indicating a plateau after the initial growth.

Net Operating Profit After Taxes (NOPAT)

NOPAT showed a robust increase from 4,739 million USD in 2020 to 7,193 million USD in 2021, signaling improved operational effectiveness and profitability. Subsequent years showed a decline in NOPAT to 6,841 million USD in 2022 and further down to 6,415 million USD in 2023, suggesting a reduction in operating efficiency or increased costs during this period. Notably, there was a recovery in 2024, with NOPAT rising again to 7,015 million USD, reaching levels approaching the 2021 peak.

Overall Observations

Both shareholders’ net income and NOPAT experienced substantial growth from 2020 to 2021. Following this peak, net income maintained relatively steady levels with minor declines, while NOPAT exhibited more volatility, decreasing over two years before partially rebounding in 2024. This pattern could indicate external or operational factors affecting profitability after initial gains. The relative steadiness in net income compared to NOPAT fluctuations may also suggest effective management of non-operating factors such as taxes, financing costs, or extraordinary items during the period analyzed.

The financial data over the five-year period reveals several notable trends related to tax expenses and cash operating taxes.

Income Tax Expense

The income tax expense showed a general upward trend from 2020 to 2024, starting at 1,666 million US dollars in 2020 and increasing to 1,933 million US dollars in 2024. There was a slight dip in 2022 compared to 2021, where the expense decreased from 1,830 million to 1,750 million, followed by a minor further decline in 2023 to 1,724 million. However, the expense rose significantly in 2024, reaching the highest recorded value over the period.

Cash Operating Taxes

Cash operating taxes demonstrated greater volatility during the period. The value initially decreased from 2,363 million US dollars in 2020 to 1,823 million in 2021, indicating a substantial reduction of approximately 22.9%. This trend reversed in the following years, with cash operating taxes increasing to 1,931 million in 2022, then surging to 2,637 million in 2023. Although there was a slight decline in 2024 to 2,550 million, cash operating taxes remained well above the 2021 and 2022 levels.

Overall, the patterns suggest that while income tax expense has been relatively stable with minor fluctuations, cash operating taxes have experienced more pronounced changes with a sharp decline early in the period and a significant rebound later. The year 2024 marked a notable peak for income tax expense, and cash operating taxes remain elevated compared to the middle years of the timeframe.

Total Reported Debt & Leases

The total reported debt and leases show a consistent upward trend over the five-year period. Starting from US$20,992 million at the end of 2020, the figure rose to US$24,028 million in 2021, reflecting a substantial increase of approximately 14.5%. This growth continued at a slower but steady pace in 2022 and 2023, reaching US$25,046 million and US$25,969 million, respectively. The most significant increase occurred in 2024, where debt and leases climbed markedly to US$32,043 million. This sharp rise in the final year signals a potential strategic increase in leverage or financing activities.

Shareholders’ Equity

Shareholders' equity experienced a positive growth trajectory throughout the period. Beginning at US$33,199 million in 2020, equity expanded steadily to US$36,060 million in 2021 and US$36,307 million in 2022, showing moderate annual increases. The upward movement became more pronounced in the subsequent years, culminating in an equity balance of US$41,315 million by the end of 2024. This steady accumulation of equity suggests ongoing profitability or capital retention strategies enhancing the company’s net assets.

Invested Capital

Invested capital also displayed a consistent increasing pattern, starting from US$56,634 million in 2020 and growing annually through to 2024. Elevations to US$63,876 million in 2021, US$66,804 million in 2022, and US$69,669 million in 2023 illustrate gradual capital expansion. By 2024, invested capital reached US$78,241 million, indicating an accelerated growth rate. This trend points to ongoing investments in operational or business assets, which may correspond to expansion efforts or increased asset base supporting growth initiatives.

Overall Financial Position Insights

The data reveals a pattern of expanding financial resources alongside increasing obligations. The rise in total debt and leases is proportionally higher than the growth in shareholders' equity, especially in the latest period, reflecting potentially greater reliance on external financing. Simultaneously, the increase in invested capital suggests that the company has been actively deploying capital into its business operations. The balance between rising debt and equity levels indicates a leveraged growth strategy, which may affect risk profiles and financial flexibility going forward. Monitoring the impact of this leverage on profitability and cash flows would be essential for a comprehensive financial assessment.

The financial data reveals several notable trends over the five-year period from 2020 to 2024. The economic profit shows a significant degree of volatility and predominantly negative values, with a brief positive spike in 2021.

Economic Profit

The economic profit was negative in 2020, at -1265 million US dollars, turning positive to 57 million in 2021. However, it then reverted to negative values for the following years: -857 million in 2022, -1613 million in 2023, and -1439 million in 2024.

This pattern indicates fluctuating profitability, with only one year exhibiting a marginal economic profit, followed by a deterioration in subsequent years.

Invested Capital

Invested capital has shown a steady upward trend throughout the period. It increased from 56,634 million US dollars in 2020 to 78,241 million US dollars in 2024.

The consistent growth in invested capital suggests ongoing investments or asset accumulation despite the economic profit challenges.

Economic Spread Ratio

The economic spread ratio closely mirrors the economic profit trend, showing negative spreads in most years except for a slight positive 0.09% in 2021.

Specifically, it was -2.23% in 2020, improved marginally to 0.09% in 2021, then declined again to -1.28% in 2022, further down to -2.32% in 2023, and slightly improved to -1.84% in 2024.

This indicates that the return on invested capital generally fell below the cost of capital, except for the minor positive anomaly in 2021.

In summary, the company has been increasing its invested capital over the years but has struggled to generate positive economic profit consistently. The economic spread ratio reinforces this challenge by illustrating a return on capital that mostly fails to surpass the capital cost, with only a brief respite in 2021. The overall pattern highlights ongoing profitability issues amid expanding capital investment.

The financial data reveals several key trends over the five-year period examined. Operating revenue has shown consistent growth each year, increasing from approximately $120.8 billion in 2020 to an estimated $175.2 billion in 2024. This steady upward trajectory reflects expanding business operations or increasing market share over the period.

In contrast, economic profit exhibits significant volatility and persistent negative values in most years. Starting with a substantial loss of $1.265 billion in 2020, the metric improves sharply to a positive $57 million in 2021. However, this positive outcome is short-lived, as economic profit declines again to negative values in the subsequent years, reaching losses of $857 million in 2022, $1.613 billion in 2023, and $1.439 billion in 2024. This pattern suggests challenges in converting revenue growth into sustainable economic profit.

Supporting this observation, the economic profit margin similarly fluctuates and remains negative for the majority of the period, except for a marginally positive 0.04% in 2021. The margin moves from -1.05% in 2020 to -0.82% in 2024, indicating that despite revenue increases, profitability relative to the economic capital employed remains under pressure and below breakeven levels for most years.

Operating Revenue

Consistently growing year-over-year, increasing by approximately 45% over the five-year span, indicating robust top-line expansion.

Economic Profit

Highly variable and predominantly negative, with a one-year improvement in 2021 before reverting to sizeable economic losses, highlighting difficulties in generating returns above the cost of capital.

Economic Profit Margin

Mostly negative percentages align with economic profit trends, confirming that profitability relative to revenues and capital employed remains weak, despite growing sales.

Overall, the data suggests that while revenue growth is strong and consistent, converting that growth into economic value is a challenge, with sustained periods of losses indicating potential issues with cost management, capital efficiency, or pricing strategy. The brief positive inflection in 2021 may warrant further examination to identify factors that contributed to temporary improved profitability.