Stock Analysis on Net

UnitedHealth Group Inc. (NYSE:UNH)

Economic Value Added (EVA)

Microsoft Excel

Economic Profit

UnitedHealth Group Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net operating profit after taxes (NOPAT)1 18,940 26,672 22,615 18,910 18,059
Cost of capital2 9.86% 10.02% 10.08% 10.07% 9.76%
Invested capital3 198,557 182,841 165,347 139,922 130,513
 
Economic profit4 (632) 8,346 5,943 4,822 5,318

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 18,9409.86% × 198,557 = -632

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. UnitedHealth Group Inc. economic profit increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Net Operating Profit after Taxes (NOPAT)

UnitedHealth Group Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net earnings attributable to UnitedHealth Group common shareholders 14,405 22,381 20,120 17,285 15,403
Deferred income tax expense (benefit)1 (296) (245) (673) 130 (8)
Increase (decrease) in receivables allowances2 765 774 363 (90) 659
Increase (decrease) in unearned revenues3 (38) 280 504 (271) 220
Increase (decrease) in equity equivalents4 431 809 194 (231) 871
Interest expense 3,906 3,246 2,092 1,660 1,663
Interest expense, operating lease liability5 230 196 164 124 133
Adjusted interest expense 4,136 3,442 2,256 1,784 1,796
Tax benefit of interest expense6 (869) (723) (474) (375) (377)
Adjusted interest expense, after taxes7 3,267 2,719 1,782 1,409 1,419
Net income (loss) attributable to noncontrolling interest 837 763 519 447 366
Net operating profit after taxes (NOPAT) 18,940 26,672 22,615 18,910 18,059

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in receivables allowances.

3 Addition of increase (decrease) in unearned revenues.

4 Addition of increase (decrease) in equity equivalents to net earnings attributable to UnitedHealth Group common shareholders.

5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 4,889 × 4.70% = 230

6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 4,136 × 21.00% = 869

7 Addition of after taxes interest expense to net earnings attributable to UnitedHealth Group common shareholders.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. UnitedHealth Group Inc. NOPAT increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Cash Operating Taxes

UnitedHealth Group Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Provision for income taxes 4,829 5,968 5,704 4,578 4,973
Less: Deferred income tax expense (benefit) (296) (245) (673) 130 (8)
Add: Tax savings from interest expense 869 723 474 375 377
Cash operating taxes 5,994 6,936 6,851 4,823 5,358

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. UnitedHealth Group Inc. cash operating taxes increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Invested Capital

UnitedHealth Group Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Short-term borrowings and current maturities of long-term debt 4,545 4,274 3,110 3,620 4,819
Long-term debt, less current maturities 72,359 58,263 54,513 42,383 38,648
Operating lease liability1 4,889 4,898 4,830 4,273 4,447
Total reported debt & leases 81,793 67,435 62,453 50,276 47,914
Shareholders’ equity attributable to UnitedHealth Group 92,658 88,756 77,772 71,760 65,491
Net deferred tax (assets) liabilities2 3,620 3,021 2,769 3,265 3,367
Receivables allowances3 3,849 3,084 2,310 1,947 2,037
Unearned revenues4 3,317 3,355 3,075 2,571 2,842
Equity equivalents5 10,786 9,460 8,154 7,783 8,246
Accumulated other comprehensive (income) loss, net of tax6 3,387 7,027 8,393 5,384 3,814
Redeemable noncontrolling interests 4,323 4,498 4,897 1,434 2,211
Nonredeemable noncontrolling interests 5,610 5,665 3,678 3,285 2,837
Adjusted shareholders’ equity attributable to UnitedHealth Group 116,764 115,406 102,894 89,646 82,599
Invested capital 198,557 182,841 165,347 139,922 130,513

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of unearned revenues.

5 Addition of equity equivalents to shareholders’ equity attributable to UnitedHealth Group.

6 Removal of accumulated other comprehensive income.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. UnitedHealth Group Inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Cost of Capital

UnitedHealth Group Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 428,598 428,598 ÷ 505,352 = 0.85 0.85 × 10.99% = 9.32%
Commercial paper, long-term debt and other financing obligations3 71,865 71,865 ÷ 505,352 = 0.14 0.14 × 4.46% × (1 – 21.00%) = 0.50%
Operating lease liability4 4,889 4,889 ÷ 505,352 = 0.01 0.01 × 4.70% × (1 – 21.00%) = 0.04%
Total: 505,352 1.00 9.86%

Based on: 10-K (reporting date: 2024-12-31).

1 US$ in millions

2 Equity. See details »

3 Commercial paper, long-term debt and other financing obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 459,381 459,381 ÷ 525,218 = 0.87 0.87 × 10.99% = 9.61%
Commercial paper, long-term debt and other financing obligations3 60,939 60,939 ÷ 525,218 = 0.12 0.12 × 4.16% × (1 – 21.00%) = 0.38%
Operating lease liability4 4,898 4,898 ÷ 525,218 = 0.01 0.01 × 4.00% × (1 – 21.00%) = 0.03%
Total: 525,218 1.00 10.02%

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

2 Equity. See details »

3 Commercial paper, long-term debt and other financing obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 451,806 451,806 ÷ 511,062 = 0.88 0.88 × 10.99% = 9.72%
Commercial paper, long-term debt and other financing obligations3 54,426 54,426 ÷ 511,062 = 0.11 0.11 × 4.07% × (1 – 21.00%) = 0.34%
Operating lease liability4 4,830 4,830 ÷ 511,062 = 0.01 0.01 × 3.40% × (1 – 21.00%) = 0.03%
Total: 511,062 1.00 10.08%

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in millions

2 Equity. See details »

3 Commercial paper, long-term debt and other financing obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 449,966 449,966 ÷ 506,822 = 0.89 0.89 × 10.99% = 9.76%
Commercial paper, long-term debt and other financing obligations3 52,583 52,583 ÷ 506,822 = 0.10 0.10 × 3.57% × (1 – 21.00%) = 0.29%
Operating lease liability4 4,273 4,273 ÷ 506,822 = 0.01 0.01 × 2.90% × (1 – 21.00%) = 0.02%
Total: 506,822 1.00 10.07%

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in millions

2 Equity. See details »

3 Commercial paper, long-term debt and other financing obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 316,351 316,351 ÷ 373,348 = 0.85 0.85 × 10.99% = 9.31%
Commercial paper, long-term debt and other financing obligations3 52,550 52,550 ÷ 373,348 = 0.14 0.14 × 3.80% × (1 – 21.00%) = 0.42%
Operating lease liability4 4,447 4,447 ÷ 373,348 = 0.01 0.01 × 3.00% × (1 – 21.00%) = 0.03%
Total: 373,348 1.00 9.76%

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in millions

2 Equity. See details »

3 Commercial paper, long-term debt and other financing obligations. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

UnitedHealth Group Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 (632) 8,346 5,943 4,822 5,318
Invested capital2 198,557 182,841 165,347 139,922 130,513
Performance Ratio
Economic spread ratio3 -0.32% 4.56% 3.59% 3.45% 4.07%
Benchmarks
Economic Spread Ratio, Competitors4
Abbott Laboratories -2.28% -2.59% -0.38% 0.08% -3.19%
Cigna Group -2.35% -2.83% 0.22% -0.69% 2.20%
CVS Health Corp. -3.22% -0.45% -4.90% -0.91% -0.27%
Elevance Health Inc. -1.84% -2.32% -1.29% 0.09% -2.24%
Intuitive Surgical Inc. 10.03% 3.59% 3.30% 18.91% 6.90%
Medtronic PLC -5.06% -4.81% -3.57% -5.18% -4.27%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -632 ÷ 198,557 = -0.32%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. UnitedHealth Group Inc. economic spread ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Economic Profit Margin

UnitedHealth Group Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 (632) 8,346 5,943 4,822 5,318
 
Revenues, customers 395,076 367,533 322,132 285,273 255,639
Add: Increase (decrease) in unearned revenues (38) 280 504 (271) 220
Adjusted revenues, customers 395,038 367,813 322,636 285,002 255,859
Performance Ratio
Economic profit margin2 -0.16% 2.27% 1.84% 1.69% 2.08%
Benchmarks
Economic Profit Margin, Competitors3
Abbott Laboratories -3.27% -3.85% -0.53% 0.11% -5.56%
Cigna Group -0.78% -1.25% 0.10% -0.36% 1.29%
CVS Health Corp. -1.14% -0.17% -1.88% -0.41% -0.14%
Elevance Health Inc. -0.82% -0.95% -0.55% 0.04% -1.05%
Intuitive Surgical Inc. 9.33% 3.58% 2.85% 14.88% 7.08%
Medtronic PLC -10.72% -10.85% -7.83% -12.43% -10.51%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues, customers
= 100 × -632 ÷ 395,038 = -0.16%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. UnitedHealth Group Inc. economic profit margin improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.