Stock Analysis on Net

Cigna Group (NYSE:CI)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Cigna Group, balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Operating Assets
Total assets 152,761 143,932 154,889 155,451 155,774
Less: Cash and cash equivalents 7,822 5,924 5,081 10,182 4,619
Less: Investments 925 905 920 1,331 937
Operating assets 144,014 137,103 148,888 143,938 150,218
Operating Liabilities
Total liabilities 106,410 98,981 107,705 105,065 110,395
Less: Short-term debt 2,775 2,993 2,545 3,374 5,514
Less: Long-term debt 28,155 28,100 31,125 29,545 31,893
Operating liabilities 75,480 67,888 74,035 72,146 72,988
 
Net operating assets1 68,534 69,215 74,853 71,792 77,230
Balance-sheet-based aggregate accruals2 (681) (5,638) 3,061 (5,438)
Financial Ratio
Balance-sheet-based accruals ratio3 -0.99% -7.83% 4.17% -7.30%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Abbott Laboratories 6.06% -0.73% -1.76% -1.55%
CVS Health Corp. 16.15% -9.86% -3.68% -0.89%
Danaher Corp. 3.48% -1.55% 16.41% 52.50%
Elevance Health Inc. 7.14% 0.32% 14.93% -15.16%
Humana Inc. -11.37% -44.43% 111.97% 18.14%
Intuitive Surgical Inc. 15.55% -10.21% 50.02% -8.55%
Medtronic PLC 2.69% -1.37% 3.72% -1.48% 0.51%
UnitedHealth Group Inc. 13.41% 17.32% 4.32% 5.27%
Balance-Sheet-Based Accruals Ratio, Sector
Health Care Equipment & Services 8.27% -1.25% 5.99% 3.33%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 8.00% 2.36% 5.50% 10.57%

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 144,01475,480 = 68,534

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 68,53469,215 = -681

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -681 ÷ [(68,534 + 69,215) ÷ 2] = -0.99%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Cigna Group improved earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Cigna Group, cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Shareholders’ net income 5,164 6,668 5,365 8,458 5,104
Less: Net cash provided by operating activities 11,813 8,656 7,191 10,350 9,485
Less: Net cash (used in) provided by investing activities (5,174) 3,098 (3,611) 2,976 (734)
Cash-flow-statement-based aggregate accruals (1,475) (5,086) 1,785 (4,868) (3,647)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -2.14% -7.06% 2.43% -6.53%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Abbott Laboratories 3.55% -2.08% -3.29% -2.65%
CVS Health Corp. 13.47% -6.15% -4.20% -2.54%
Danaher Corp. 8.20% 1.44% 18.48% 42.90%
Elevance Health Inc. 12.87% 8.35% 30.34% 4.96%
Humana Inc. 26.92% -7.68% 91.38% 24.85%
Intuitive Surgical Inc. 4.54% -20.88% 33.51% 10.64%
Medtronic PLC 1.80% -0.97% 0.35% 1.16% -2.45%
UnitedHealth Group Inc. 7.40% 21.73% 5.77% 6.56%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Health Care Equipment & Services 7.08% 1.89% 5.76% 3.91%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 8.56% 2.29% 6.44% 6.57%

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -1,475 ÷ [(68,534 + 69,215) ÷ 2] = -2.14%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Cigna Group improved earnings quality from 2022 to 2023.