Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
UnitedHealth Group Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 15,617 – 9.04% × 197,568 = -2,252
The financial performance between 2021 and 2025 is characterized by an initial phase of robust value creation followed by a significant contraction in economic profitability. While operating profits and invested capital both expanded through 2023, a subsequent sharp decline in operating performance, coupled with a substantially larger capital base, resulted in a transition to negative economic profit by 2024.
- Net Operating Profit After Taxes (NOPAT) Trends
- NOPAT demonstrated strong growth for the first three years of the period, increasing from 18,910 million in 2021 to a peak of 26,672 million in 2023. This growth trend reversed abruptly in 2024 and 2025, with NOPAT falling to 18,940 million and 15,617 million, respectively, representing a significant erosion of operating profitability.
- Invested Capital Expansion
- Invested capital showed a consistent upward trajectory from 2021 to 2024, rising from 139,922 million to 198,557 million. A marginal decrease occurred in 2025, with the figure settling at 197,568 million. The steady increase in the capital base expanded the threshold of profit required to achieve a positive economic return.
- Cost of Capital Dynamics
- The cost of capital remained stable between 9.74% and 9.79% from 2021 through 2023. A downward trend was observed in the latter part of the period, with the rate declining to 9.58% in 2024 and further to 9.04% in 2025. Although the reduction in the cost of capital typically improves economic profit, it was insufficient to offset the decline in NOPAT.
- Economic Profit and Value Creation
- Economic profit grew from 5,229 million in 2021 to a high of 8,870 million in 2023, indicating successful value creation above the cost of capital. However, the convergence of falling NOPAT and high invested capital led to a collapse in economic profit, which became negative in 2024 (-81 million) and deteriorated further to -2,252 million in 2025, signaling a shift toward value destruction.
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Net Operating Profit after Taxes (NOPAT)
UnitedHealth Group Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
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 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 4,615 × 5.00% = 231
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 4,233 × 21.00% = 889
7 Addition of after taxes interest expense to net earnings attributable to UnitedHealth Group common shareholders.
Net earnings attributable to UnitedHealth Group common shareholders and net operating profit after taxes (NOPAT) both demonstrate a pattern of initial growth followed by a subsequent decline over the five-year period. NOPAT exhibits a more pronounced increase initially, before experiencing a more significant decrease in later years.
- NOPAT Trend
- NOPAT increased from US$18,910 million in 2021 to US$26,672 million in 2023, representing a cumulative growth of approximately 41.1%. This indicates improving operational profitability during this timeframe. However, NOPAT then decreased to US$18,940 million in 2024 and further to US$15,617 million in 2025. This represents a decline of approximately 26.1% from the 2023 peak. The decrease in NOPAT in 2024 and 2025 suggests potential challenges in maintaining operational efficiency or increased costs.
- Net Earnings Trend
- Net earnings attributable to UnitedHealth Group common shareholders increased from US$17,285 million in 2021 to US$22,381 million in 2023, a growth of approximately 29.5%. Similar to NOPAT, net earnings then declined, reaching US$14,405 million in 2024 and US$12,056 million in 2025. This represents a decrease of approximately 46.3% from the 2023 high. The decline in net earnings mirrors the trend observed in NOPAT, suggesting a correlation between operational profitability and overall earnings.
- Relationship between NOPAT and Net Earnings
- While both metrics generally move in the same direction, NOPAT consistently exceeds net earnings throughout the period. This difference could be attributed to factors such as non-operating income or expenses, or differences in accounting treatment. The magnitude of the difference between NOPAT and net earnings remains relatively stable across the observed years.
The observed declines in both NOPAT and net earnings in 2024 and 2025 warrant further investigation to determine the underlying causes and potential implications for future performance.
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Cash Operating Taxes
UnitedHealth Group Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The provision for income taxes and cash operating taxes both exhibited increasing values from 2021 to 2023, followed by declines in subsequent years. However, the magnitude and timing of these changes differed between the two items.
- Provision for Income Taxes
- The provision for income taxes increased from US$4,578 million in 2021 to US$5,704 million in 2022, representing a 24.6% increase. Further growth was observed in 2023, reaching US$5,968 million. A notable decrease occurred in 2024, with the provision falling to US$4,829 million, and continued to decline significantly in 2025 to US$1,890 million. This represents a substantial reduction over the two-year period from 2023 to 2025.
- Cash Operating Taxes
- Cash operating taxes demonstrated a similar upward trend initially, rising from US$4,823 million in 2021 to US$6,851 million in 2022, a 42.3% increase. The value continued to increase in 2023, reaching US$6,936 million. A decrease was then observed in 2024, with cash operating taxes falling to US$5,994 million. The decline continued into 2025, with cash operating taxes reported at US$4,531 million. While decreasing, the rate of decline appears less pronounced than that of the provision for income taxes.
- Relationship between Provision and Cash Taxes
- In 2021 and 2022, cash operating taxes were consistently higher than the provision for income taxes. This difference narrowed in 2023, and reversed in 2024 and 2025, with the provision for income taxes exceeding cash operating taxes. The divergence in 2025 is particularly significant, suggesting a substantial difference between reported tax expense and actual cash outflows for tax purposes. This could be attributable to changes in deferred tax assets or liabilities, tax credits, or other non-cash tax effects.
The observed trends suggest a potential shift in the company’s tax profile. The significant decline in both measures from 2023 to 2025 warrants further investigation to understand the underlying drivers and potential implications for future financial performance.
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Invested Capital
UnitedHealth Group Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
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.
The invested capital of the organization demonstrates a consistent upward trend over the analyzed period, though the rate of increase fluctuates. Total reported debt & leases and shareholders’ equity attributable to UnitedHealth Group both contribute to this overall growth. A detailed examination of each component reveals specific patterns.
- Total Reported Debt & Leases
- Total reported debt & leases exhibits a steady increase from US$50,276 million in 2021 to US$83,004 million in 2025. The growth is not linear; a more substantial increase is observed between 2022 and 2023 (US$15,000 million) and again between 2023 and 2024 (US$14,358 million). The increase from 2024 to 2025 is comparatively modest, at US$207 million.
- Shareholders’ Equity
- Shareholders’ equity attributable to UnitedHealth Group also shows an increasing trend, rising from US$71,760 million in 2021 to US$94,110 million in 2025. The rate of growth is relatively consistent throughout the period, with increases ranging from approximately US$5,000 million to US$7,000 million annually. The largest increase occurs between 2022 and 2023 (US$10,984 million).
- Invested Capital
- Invested capital, calculated as the sum of total reported debt & leases and shareholders’ equity, increases from US$139,922 million in 2021 to US$197,568 million in 2025. The growth rate mirrors the combined trends of its components, with larger increases observed in 2023 and 2024. Notably, the increase in invested capital slows considerably between 2024 and 2025, rising by only US$754 million, suggesting a potential stabilization in capital deployment.
The consistent growth in both debt and equity suggests ongoing investment and financing activities. The slight deceleration in the growth of invested capital in the most recent year warrants further investigation to determine if this represents a strategic shift or a temporary fluctuation.
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Cost of Capital
UnitedHealth Group Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 267,701) | 267,701) | ÷ | 346,708) | = | 0.77 | 0.77 | × | 10.66% | = | 8.23% | ||
| Commercial paper, long-term debt and other financing obligations3 | 74,392) | 74,392) | ÷ | 346,708) | = | 0.21 | 0.21 | × | 4.48% × (1 – 21.00%) | = | 0.76% | ||
| Operating lease liability4 | 4,615) | 4,615) | ÷ | 346,708) | = | 0.01 | 0.01 | × | 5.00% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 346,708) | 1.00 | 9.04% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | 428,598) | 428,598) | ÷ | 505,352) | = | 0.85 | 0.85 | × | 10.66% | = | 9.04% | ||
| 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 | 9.58% | ||||||||||
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 | × | 10.66% | = | 9.33% | ||
| 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 | 9.74% | ||||||||||
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 | × | 10.66% | = | 9.43% | ||
| 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 | 9.79% | ||||||||||
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 | × | 10.66% | = | 9.47% | ||
| 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 | 9.78% | ||||||||||
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 »
Economic Spread Ratio
UnitedHealth Group Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (2,252) | (81) | 8,870) | 6,422) | 5,229) | |
| Invested capital2 | 197,568) | 198,557) | 182,841) | 165,347) | 139,922) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -1.14% | -0.04% | 4.85% | 3.88% | 3.74% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | -2.33% | -4.57% | -4.75% | -2.51% | -2.02% | |
| Elevance Health Inc. | -1.08% | -0.68% | -1.03% | 0.01% | 1.33% | |
| Intuitive Surgical Inc. | 1.16% | 3.74% | -2.71% | -2.99% | 12.62% | |
| Medtronic PLC | -4.80% | -6.60% | -6.38% | -5.14% | -6.78% | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -2,252 ÷ 197,568 = -1.14%
4 Click competitor name to see calculations.
A significant reversal in value creation is observed between 2021 and 2025. The period is characterized by an initial phase of growth in economic profit and efficiency, followed by a sharp transition into value destruction starting in 2024.
- Economic Profit Trends
- Economic profit experienced steady growth from 2021 to 2023, rising from 5,229 million US$ to a peak of 8,870 million US$. However, a precipitous decline occurred in 2024, where profit turned negative at -81 million US$, and further deteriorated to -2,252 million US$ by the end of 2025. This indicates that the company ceased generating returns above its cost of capital in the final two years of the period.
- Invested Capital Trajectory
- Invested capital showed a consistent upward trend for the majority of the analyzed period, increasing from 139,922 million US$ in 2021 to a peak of 198,557 million US$ in 2024. A marginal contraction is noted in 2025, with capital settling at 197,568 million US$. The expansion of the capital base occurred concurrently with the growth in economic profit until 2023, but failed to yield positive economic returns thereafter.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrors the trend of economic profit, peaking at 4.85% in 2023. This indicates that the company was efficiently creating value relative to its invested capital during the first three years. A critical inflection point occurred in 2024, as the ratio dropped to -0.04%, signaling that the return on invested capital fell slightly below the cost of capital. This negative trend intensified in 2025, reaching -1.14%, which confirms a state of value erosion.
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Economic Profit Margin
UnitedHealth Group Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (2,252) | (81) | 8,870) | 6,422) | 5,229) | |
| Revenues, customers | 443,647) | 395,076) | 367,533) | 322,132) | 285,273) | |
| Add: Increase (decrease) in unearned revenues | 96) | (38) | 280) | 504) | (271) | |
| Adjusted revenues, customers | 443,743) | 395,038) | 367,813) | 322,636) | 285,002) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -0.51% | -0.02% | 2.41% | 1.99% | 1.83% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Abbott Laboratories | -3.28% | -6.55% | -7.06% | -3.52% | -2.92% | |
| Elevance Health Inc. | -0.44% | -0.30% | -0.42% | 0.00% | 0.62% | |
| Intuitive Surgical Inc. | 1.31% | 3.48% | -2.70% | -2.58% | 9.93% | |
| Medtronic PLC | -10.08% | -13.98% | -14.41% | -11.28% | -16.28% | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues, customers
= 100 × -2,252 ÷ 443,743 = -0.51%
3 Click competitor name to see calculations.
A significant divergence is observed between revenue growth and the creation of economic value over the five-year period ending December 31, 2025. While adjusted revenues grew consistently and substantially each year, economic profit transitioned from a period of growth to a sharp decline, ultimately becoming negative in the final two years of the analysis.
- Revenue Performance
- Adjusted revenues exhibited a steady upward trajectory, increasing from 285,002 million USD in 2021 to 443,743 million USD in 2025. This represents continuous expansion in the top-line scale of operations throughout the entire period.
- Economic Profit Trends
- Economic profit experienced a growth phase between 2021 and 2023, peaking at 8,870 million USD. However, a severe reversal occurred in 2024, where the figure dropped to -81 million USD, further deteriorating to -2,252 million USD by 2025. This indicates that in the latter years, the returns generated were insufficient to cover the cost of capital.
- Economic Profit Margin Analysis
- The economic profit margin closely mirrored the trend of absolute economic profit. The margin expanded from 1.83% in 2021 to a peak of 2.41% in 2023. This was followed by a collapse to -0.02% in 2024 and a further decline to -0.51% in 2025. The transition to negative margins suggests that despite increasing revenues, the efficiency of value creation relative to the capital employed declined significantly.
The data indicates a period of value erosion starting in 2024. The fact that revenues continued to rise while economic profit turned negative suggests that the costs associated with generating those revenues, or the cost of the capital invested, grew at a rate that outpaced operational gains.
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