UnitedHealth Group Inc. (NYSE:UNH)

The analysis of the quarterly financial ratios reveals various trends in the company's leverage and ability to cover interest expenses over the observed periods.

Debt to Equity Ratio

This ratio exhibited a general declining trend from March 2020 (0.91) until December 2020 (0.66), indicating a reduction in reliance on debt relative to equity. It then remained relatively stable around 0.64 to 0.74 during 2021 and 2022 with minor fluctuations. In 2023, the ratio showed a slight increase, peaking at 0.87 in March 2023, followed by a gradual decline toward the end of the year. The first quarter of 2024 saw a renewed increase reaching 0.86 by March 2025. This pattern suggests periods of both deleveraging and modest increases in debt usage relative to equity in recent times.

Debt to Capital Ratio

The debt to capital ratio started at 0.48 in March 2020 and decreased steadily to 0.39 by December 2020, signifying less debt relative to total capital. From 2021 through 2022, it fluctuated between 0.39 and 0.43, stabilizing overall. In 2023, the ratio increased slightly again to 0.46 in March and held relatively steady through March 2025. The minor rise after 2022 indicates a moderate increase in debt proportion within the capital structure but no significant leverage shifts.

Debt to Assets Ratio

This ratio trended downward from 0.27 in March 2020 to 0.22 by December 2020, reflecting a reduced use of debt to finance assets. It remained largely stable with minor fluctuations around 0.22 to 0.25 during 2021 and 2022. Starting 2023, the ratio increased slightly reaching 0.26 by 2024 and remained steady through early 2025. This hints at a small but consistent increase in assets financed through debt in recent quarters.

Financial Leverage Ratio

The financial leverage ratio declined from 3.32 in March 2020 to approximately 2.93 by September 2020, indicating a reduction in total assets relative to shareholders' equity. Thereafter, it remained near 3.0 through 2021, followed by a modest increase peaking at 3.49 in March 2023. After this, a decrease to around 3.08 occurred, followed by moderate rises oscillating near 3.2 through March 2025. Overall, this suggests some variability but a general maintenance of leverage levels above 3 times equity during most periods.

Interest Coverage Ratio

Data for this ratio is available from December 2020 onward, starting at 13.47 and increasing to 14.88 in the following quarter, denoting strong ability to cover interest expenses. Coverage remained robust, fluctuating between 13.03 and 14.66 throughout 2021 and 2022. However, starting in early 2023, the ratio declined steadily, dropping to a low of 6.14 by December 2024. A slight recovery to 7.94 was observed by March 2025. This downward trend indicates a decreasing ability to service interest costs over time, implying potential pressures on profitability or higher interest expenses in recent periods.

In summary, the company’s leverage ratios indicate initial deleveraging through 2020 followed by stabilization and mild increases in debt levels relative to equity, capital, and assets in subsequent years. Financial leverage remained relatively consistent with minor fluctuations. The interest coverage ratio trend is more concerning, showing a marked decline from very strong coverage to lower levels, which may warrant further analysis of profit margins and interest expenses to assess financial risk going forward.

The financial data reveals several notable trends in the company’s debt and equity structure over the periods analyzed.

Total Debt

Total debt experienced a decline from March 2020 (US$51.6 billion) to December 2020 (US$43.5 billion), followed by a generally increasing trend through the subsequent periods. By December 2022, the total debt peaked at US$57.6 billion and demonstrated fluctuations thereafter. The debt level reached US$81.3 billion by March 2025, marking the highest point within the time frame. This reflects an overall upward movement in borrowing or liabilities over the five-year span despite some interim decreases.

Shareholders’ Equity

Shareholders' equity showed consistent growth throughout the periods. Starting from US$57.0 billion at the end of Q1 2020, it rose steadily to US$77.8 billion by December 2022. This upward trend continued throughout 2023 and into early 2025, reaching approximately US$95.0 billion by March 2025. The continuous increase in equity suggests improving retained earnings or additional equity infusions.

Debt to Equity Ratio

The debt to equity ratio exhibited a decline from 0.91 in March 2020 to a low of 0.64 by December 2021, indicating a stronger equity base relative to debt. However, beginning in late 2021, the ratio reversed direction and started to rise again, reaching 0.87 in the first quarter of 2023. After some fluctuations through 2023, it stabilized around the mid-0.8 range in 2024 and early 2025. This increasing ratio reflects a growing reliance on debt financing compared to shareholders’ equity during the later periods.

In summary, the data highlights an initial period of debt reduction paired with equity growth, leading to lowering leverage ratios. Subsequently, the company increased its debt levels at a faster pace than equity, resulting in rising leverage. Despite the increase in debt, the company's shareholders’ equity also expanded significantly, maintaining a solid net asset base. The upward trend in the debt to equity ratio towards the end of the period signals heightened financial leverage, which warrants monitoring for potential impacts on risk and financial flexibility.

Total Debt

The total debt exhibits a fluctuating upward trend over the analyzed periods. Starting at approximately $51.6 billion in March 2020, it initially decreased to around $43.5 billion by December 2020. Subsequently, there was a steady increase with some fluctuations, reaching nearly $70.6 billion in March 2023. After this peak, debt slightly declined and stabilized near the $62.5 billion to $65.6 billion range through the end of 2023. The debt resumed its upward trend in 2024, surpassing previous highs and reaching over $81.2 billion by March 2025.

Total Capital

Total capital showed a relatively gradual and consistent increase during the period. Beginning at approximately $108.6 billion in March 2020, it rose steadily with minor variations, peaking at about $151.9 billion in March 2023. Following a brief plateau and slight dip in late 2023, it increased again in 2024. By March 2025, total capital was around $176.3 billion, indicating solid growth in the company’s capital base over the five years.

Debt to Capital Ratio

The debt-to-capital ratio started at 0.48 in March 2020, reflecting a moderate leverage position. It declined over 2020, reaching a low of 0.39 by December 2020, suggesting an improvement in capital structure and a reduction in reliance on debt relative to total capital. From 2021 onwards, the ratio displayed some volatility but generally remained between 0.39 and 0.46. Notably, it increased during 2022 and early 2023, indicating higher leverage. In 2024 and early 2025, the ratio stabilized near 0.45 to 0.46, signaling consistent leverage levels slightly above the earlier years but not materially altering the overall capital structure.

Overall Insights

Across the reviewed periods, both total debt and total capital have grown significantly, with capital increasing at a faster rate, particularly in the early phases. The initial reduction in the debt-to-capital ratio indicates effective capital management and deleveraging. However, the ratio’s rebound to around 0.45 later in the timeline points to a strategic return to higher leverage, accompanying the rise in absolute debt levels. This pattern may reflect financing decisions aligned with investment, expansion, or other corporate strategies impacting the balance between debt and equity capital.

Total Debt

The total debt indicates a fluctuating upward trend over the periods analyzed. Starting at approximately $51.6 billion in March 2020, there was an initial decrease to around $43.5 billion by December 2020. Subsequently, debt levels gradually increased, with notable peaks in December 2022 and March 2025, reaching over $81.2 billion. The general movement suggests a gradual increase in indebtedness with intermittent declines.

Total Assets

Total assets show a consistent upward trajectory throughout the observed quarters. The value rose from approximately $189.1 billion in March 2020 to over $309.7 billion by March 2025. There are minor fluctuations in some quarters, but the overall trend is an increase of more than 63% over the five-year period, indicating asset growth and potentially expanded operational scale or investment.

Debt to Assets Ratio

The debt to assets ratio started at 0.27 in March 2020 and decreased steadily to a low of 0.20 by September 2022, suggesting improved leverage or asset growth relative to debt during this period. However, from late 2022 onwards, the ratio rose again, stabilizing around 0.26 from March 2024 through March 2025. This indicates a recent increase in leverage relative to assets, potentially due to rising debt levels outpacing asset growth in the latest quarters.

The analysis of the quarterly financial data reveals several noteworthy trends in the company's key financial metrics over the examined period.

Total assets

The total assets demonstrate a consistent upward trajectory from March 31, 2020, starting at approximately $189 billion, increasing steadily to reach about $310 billion by March 31, 2025. This growth indicates ongoing expansion and asset accumulation, despite minor fluctuations within some quarters. Notably, the largest increases are observed between the early 2023 quarters and the first quarter of 2025, suggesting heightened investment or acquisition activity during that time frame.

Shareholders’ equity attributable to UnitedHealth Group

The shareholders' equity also shows a positive trend, rising from roughly $57 billion in March 2020 to $95 billion by the end of the first quarter of 2025. Although the growth is generally steady, the rate of increase appears somewhat slower compared to the total assets, which could imply that leverage is being used to finance asset growth. Overall, the equity base strengthens over the period, reflecting retained earnings and possibly new equity injections.

Financial leverage

The financial leverage ratio fluctuates between approximately 2.9 and 3.5 throughout the timeframe, indicating varied reliance on debt versus equity financing. The ratio is lowest around the third quarter of 2020 (2.93) and peaks near the beginning of 2023 (3.49), suggesting a higher proportion of liabilities relative to equity during this interval. Following this peak, leverage decreases somewhat but remains above 3.0 in most subsequent quarters, showing a moderate to high use of debt in the capital structure consistently over time.

In summary, the company exhibits sustained growth in total assets and shareholders’ equity, supporting an expanding operational scale. The financial leverage ratio's movements imply active management of the capital structure, with a tendency towards increased borrowing at certain points balanced by periods of deleveraging. This balanced approach suggests strategic financial management aimed at optimizing growth and maintaining financial stability.

The Earnings Before Interest and Tax (EBIT) values demonstrate significant fluctuations over the observed periods, with a general upward trend despite notable short-term volatility. Starting from a modest level in early 2020, EBIT peaks sharply in mid-2020, declines in the subsequent quarters through late 2020, and then shows a cyclical increase with some variation throughout 2021 and 2022. The highest EBIT values are recorded in the early to mid-2023 quarters, followed by some decreases and increases that suggest periodic operational shifts or external market influences. The last recorded value for the first quarter of 2025 indicates a strong recovery or growth phase.

Interest expense displays a steady increasing trend across the period. Beginning at a moderate level in early 2020, it rises gradually through each subsequent quarter, with a more pronounced increase starting from late 2021 and continuing into 2024. This indicates a growing cost of debt or a higher level of borrowing, which could impact overall financial leverage and profitability if not offset by earnings growth.

The interest coverage ratio, a measure of the company’s ability to meet interest expenses from EBIT, is available for later periods and shows a clear declining trend over time. Initially, the ratio is high, reflecting strong EBIT relative to interest expenses, but declines steadily from above 14 in late 2020 to values below 10 from mid-2022 onward. By early 2024, the ratio reaches its lowest levels around 6, indicating increased pressure on earnings to cover rising interest obligations. The slight uptick at the final period suggests some temporary easing in this pressure, potentially from EBIT improvements or stabilizing interest costs.

EBIT Trends

Highly variable with peaks in mid-2020 and early 2023; shows general growth with intermittent downturns.

Interest Expense Trends

Consistent upward trajectory indicating higher borrowing costs or leverage over time.

Interest Coverage Ratio

Steady decline from strong coverage in 2020 to weaker levels by 2024, reflecting heightened risk in meeting interest obligations.

Overall, the data suggests the company has experienced growth in operating income, but rising interest expenses and declining interest coverage ratios point to increased financial risk and pressure on earnings capacity. Monitoring these trends will be critical for assessing financial stability and the sustainability of operational performance in the coming periods.