Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
Cigna Group, profitability ratios
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).
The profitability metrics for the five-year period ending December 31, 2024, exhibit a general downward trajectory across all key performance indicators. There is a consistent compression of margins and a reduction in capital efficiency, indicating a period of declining profitability and operational headwinds.
- Margin Compression
- Gross profit margin declined from 14.43% in 2020 to 10.15% in 2024, with a notable acceleration in the decrease during the final year. Operating profit margin showed a steady erosion, falling from 5.12% to 3.83% over the period. The most significant decline is observed in the net profit margin, which dropped from 5.31% in 2020 to 1.40% in 2024, reflecting a substantial reduction in the percentage of revenue converted to bottom-line profit.
- Returns on Capital and Assets
- Return on equity (ROE) experienced significant volatility, starting at 16.81% in 2020 and ending at 8.37% in 2024. While a temporary recovery to 14.86% occurred in 2022, the overall trend is negative. Similarly, return on assets (ROA) declined from 5.44% in 2020 to 2.20% in 2024, signifying a weakened capacity to generate earnings from the company's asset base.
- Overall Profitability Trend
- A synchronous decline across both margin and return ratios suggests that the reduction in profitability is systemic. The parallel movements in ROE and ROA, coupled with the contraction of the net profit margin, indicate that the decline in efficiency is not isolated to a single operational area but affects the entirety of the profitability structure.
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Gross Profit Margin
Cigna Group, gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 24,991) | 24,011) | 22,321) | 21,414) | 22,963) | |
| Revenues from external customers | 246,148) | 194,099) | 179,361) | 172,529) | 159,157) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 10.15% | 12.37% | 12.44% | 12.41% | 14.43% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | 50.93% | 50.28% | 51.54% | 52.21% | — | |
| Elevance Health Inc. | 15.92% | 16.79% | 16.79% | 17.09% | — | |
| Intuitive Surgical Inc. | 67.46% | 66.39% | 67.44% | 69.32% | — | |
| Medtronic PLC | 65.34% | 65.67% | 67.98% | 65.19% | — | |
| UnitedHealth Group Inc. | 21.31% | 23.64% | 24.09% | 23.60% | — | |
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 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues from external customers
= 100 × 24,991 ÷ 246,148 = 10.15%
2 Click competitor name to see calculations.
An analysis of profitability from 2020 to 2024 reveals a divergence between revenue growth and gross profit margins. While absolute gross profit and total revenues have generally increased over the period, the efficiency of generating that profit relative to revenue has consistently declined.
- Revenue Trends
- Revenues from external customers exhibited a consistent upward trajectory, growing from US$ 159,157 million in 2020 to US$ 246,148 million in 2024. The most significant acceleration occurred between 2023 and 2024, representing a substantial expansion in the top-line scale of operations.
- Gross Profit Performance
- Gross profit experienced a contraction in 2021, falling to US$ 21,414 million from US$ 22,963 million in 2020. Following this dip, gross profit entered a period of recovery and steady growth, reaching US$ 24,991 million by the end of 2024. Despite this recovery in absolute terms, the growth rate of gross profit lagged significantly behind the growth rate of total revenues.
- Gross Profit Margin Compression
- The gross profit margin demonstrates a clear downward trend. After a sharp decline from 14.43% in 2020 to 12.41% in 2021, the margin remained relatively stable through 2023. However, a significant compression occurred in 2024, with the margin falling to 10.15%. This pattern indicates that the cost of goods sold or direct service costs have increased disproportionately to revenue growth, resulting in reduced profitability per dollar of revenue generated.
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Operating Profit Margin
Cigna Group, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income from operations | 9,417) | 8,536) | 8,414) | 7,935) | 8,153) | |
| Revenues from external customers | 246,148) | 194,099) | 179,361) | 172,529) | 159,157) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 3.83% | 4.40% | 4.69% | 4.60% | 5.12% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | 16.27% | 16.15% | 19.16% | 19.56% | — | |
| Elevance Health Inc. | 4.16% | 4.47% | 4.94% | 5.15% | — | |
| Intuitive Surgical Inc. | 28.12% | 24.80% | 25.35% | 31.89% | — | |
| Medtronic PLC | 15.89% | 17.56% | 18.15% | 14.89% | — | |
| UnitedHealth Group Inc. | 8.17% | 8.80% | 8.83% | 8.40% | — | |
| Operating Profit Margin, Sector | ||||||
| Health Care Equipment & Services | 8.25% | 8.71% | 9.26% | 9.13% | — | |
| Operating Profit Margin, Industry | ||||||
| Health Care | 12.50% | 12.79% | 18.74% | 18.04% | — | |
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 2024 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenues from external customers
= 100 × 9,417 ÷ 246,148 = 3.83%
2 Click competitor name to see calculations.
An analysis of the financial performance from 2020 to 2024 reveals a divergence between top-line growth and operational efficiency. While both total revenues and absolute operating income have increased over the five-year period, the operating profit margin has experienced a consistent overall decline, indicating that operating expenses have grown at a faster rate than operating income.
- Revenue Growth Trends
- Revenues from external customers demonstrated continuous and accelerating growth, rising from 159,157 million US dollars in 2020 to 246,148 million US dollars by 2024. The most significant increase occurred between 2023 and 2024, where revenues grew by approximately 26.8%, marking a substantial expansion in the scale of operations.
- Operating Income Performance
- Income from operations followed a generally positive trajectory, increasing from 8,153 million US dollars in 2020 to 9,417 million US dollars in 2024. Although there was a slight contraction in 2021, the absolute growth in operating profit remained positive over the long term, with a notable peak in 2024.
- Operating Profit Margin Compression
- Despite the growth in absolute operating income, the operating profit margin exhibited a downward trend, falling from 5.12% in 2020 to 3.83% in 2024. This compression highlights a decrease in operational leverage; the growth in revenue significantly outpaced the growth in operating profit. The most pronounced decline occurred in 2024, where the margin reached its lowest point in the observed period despite achieving the highest absolute operating income.
In summary, the financial data indicates a strategy of aggressive revenue expansion that has come at the cost of margin percentage. The widening gap between the growth rates of revenue and operating income suggests an increase in the cost of generating each dollar of revenue over the last five years.
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Net Profit Margin
Cigna Group, net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Shareholders’ net income | 3,434) | 5,164) | 6,668) | 5,365) | 8,458) | |
| Revenues from external customers | 246,148) | 194,099) | 179,361) | 172,529) | 159,157) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 1.40% | 2.66% | 3.72% | 3.11% | 5.31% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | 31.95% | 14.27% | 15.88% | 16.42% | — | |
| Elevance Health Inc. | 3.41% | 3.52% | 3.87% | 4.46% | — | |
| Intuitive Surgical Inc. | 27.81% | 25.24% | 21.25% | 29.85% | — | |
| Medtronic PLC | 11.36% | 12.03% | 15.90% | 11.97% | — | |
| UnitedHealth Group Inc. | 3.65% | 6.09% | 6.25% | 6.06% | — | |
| Net Profit Margin, Sector | ||||||
| Health Care Equipment & Services | 6.09% | 6.43% | 7.05% | 7.14% | — | |
| Net Profit Margin, Industry | ||||||
| Health Care | 8.84% | 11.49% | 14.65% | 15.24% | — | |
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 2024 Calculation
Net profit margin = 100 × Shareholders’ net income ÷ Revenues from external customers
= 100 × 3,434 ÷ 246,148 = 1.40%
2 Click competitor name to see calculations.
A significant divergence is observed between revenue growth and net profitability over the five-year period from 2020 to 2024. While top-line revenues expanded consistently, net income exhibited a general downward trajectory, resulting in a substantial compression of the net profit margin.
- Revenue Performance
- Revenues from external customers demonstrated a steady and accelerating upward trend, increasing from 159,157 million US dollars in 2020 to 246,148 million US dollars in 2024. The most pronounced growth occurred between 2023 and 2024, where revenues rose by approximately 26.8% in a single fiscal year.
- Net Income Volatility
- Shareholders’ net income failed to scale with revenue growth and experienced considerable volatility. After a peak of 8,458 million US dollars in 2020, net income declined to 5,365 million US dollars in 2021, saw a partial recovery to 6,668 million US dollars in 2022, and then entered a period of steady decline, reaching a low of 3,434 million US dollars by December 31, 2024.
- Net Profit Margin Erosion
- The net profit margin reflects a consistent downward trend, falling from 5.31% in 2020 to 1.40% in 2024. Despite a brief marginal improvement in 2022 to 3.72%, the margin contracted sharply in the subsequent two years. The decline to 1.40% in 2024, occurring simultaneously with record-high revenues, indicates a significant increase in operating costs or other non-operating expenses that have outpaced revenue gains.
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Return on Equity (ROE)
Cigna Group, ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Shareholders’ net income | 3,434) | 5,164) | 6,668) | 5,365) | 8,458) | |
| Shareholders’ equity | 41,033) | 46,223) | 44,872) | 47,112) | 50,321) | |
| Profitability Ratio | ||||||
| ROE1 | 8.37% | 11.17% | 14.86% | 11.39% | 16.81% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Abbott Laboratories | 28.12% | 14.83% | 18.90% | 19.75% | — | |
| Elevance Health Inc. | 14.47% | 15.23% | 16.59% | 16.93% | — | |
| Intuitive Surgical Inc. | 14.13% | 13.51% | 11.98% | 14.32% | — | |
| Medtronic PLC | 7.32% | 7.30% | 9.59% | 7.01% | — | |
| UnitedHealth Group Inc. | 15.55% | 25.22% | 25.87% | 24.09% | — | |
| ROE, Sector | ||||||
| Health Care Equipment & Services | 16.02% | 17.13% | 18.40% | 17.28% | — | |
| ROE, Industry | ||||||
| Health Care | 15.74% | 19.40% | 24.82% | 25.44% | — | |
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 2024 Calculation
ROE = 100 × Shareholders’ net income ÷ Shareholders’ equity
= 100 × 3,434 ÷ 41,033 = 8.37%
2 Click competitor name to see calculations.
The profitability profile for the period ending December 31, 2024, reflects a general downward trajectory in Return on Equity (ROE), characterized by significant volatility in net income and a gradual reduction in the shareholders' equity base.
- Shareholders' Net Income
- Net income exhibited substantial fluctuations, starting at US$ 8,458 million in 2020 and ending at US$ 3,434 million in 2024. A notable decrease occurred between 2020 and 2021, followed by a partial recovery to US$ 6,668 million in 2022, before entering a consistent decline through 2024. The final reported value represents a decrease of approximately 59% from the 2020 peak.
- Shareholders' Equity
- The equity base demonstrated a general contraction over the five-year interval. From a high of US$ 50,321 million in 2020, equity declined to US$ 41,033 million by 2024. Although a minor increase was observed in 2023, the overall trend indicates a reduction in the total capital attributable to shareholders.
- Return on Equity (ROE)
- ROE experienced a comprehensive decline, falling from 16.81% in 2020 to 8.37% in 2024. The ratio showed temporary resilience in 2022, rising to 14.86%, but subsequently declined for two consecutive years. The contraction in ROE is primarily driven by the sharp decrease in net income, which significantly outpaced the reduction in shareholders' equity, resulting in diminished capital efficiency.
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Return on Assets (ROA)
Cigna Group, ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Shareholders’ net income | 3,434) | 5,164) | 6,668) | 5,365) | 8,458) | |
| Total assets | 155,881) | 152,761) | 143,932) | 154,889) | 155,451) | |
| Profitability Ratio | ||||||
| ROA1 | 2.20% | 3.38% | 4.63% | 3.46% | 5.44% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Abbott Laboratories | 16.46% | 7.82% | 9.31% | 9.40% | — | |
| Elevance Health Inc. | 5.12% | 5.50% | 5.86% | 6.26% | — | |
| Intuitive Surgical Inc. | 12.39% | 11.64% | 10.19% | 12.58% | — | |
| Medtronic PLC | 4.09% | 4.13% | 5.54% | 3.87% | — | |
| UnitedHealth Group Inc. | 4.83% | 8.18% | 8.19% | 8.15% | — | |
| ROA, Sector | ||||||
| Health Care Equipment & Services | 6.57% | 7.05% | 7.49% | 7.28% | — | |
| ROA, Industry | ||||||
| Health Care | 5.73% | 7.19% | 9.66% | 9.46% | — | |
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 2024 Calculation
ROA = 100 × Shareholders’ net income ÷ Total assets
= 100 × 3,434 ÷ 155,881 = 2.20%
2 Click competitor name to see calculations.
The analysis of profitability over the period from 2020 to 2024 reveals a significant decline in the efficiency of asset utilization. While the total asset base remained relatively stable, a substantial contraction in net income has led to a progressive erosion of the Return on Assets (ROA).
- Net Income Trends
- Shareholders' net income exhibited significant volatility and an overall downward trajectory, starting at 8,458 million USD in 2020 and falling to 3,434 million USD by 2024. Although a partial recovery occurred in 2022, with income rising to 6,668 million USD, the subsequent two years saw a consistent decline, resulting in a total reduction of approximately 59% over the five-year period.
- Total Asset Stability
- Total assets remained largely consistent, ending the period at 155,881 million USD, a value nearly identical to the 155,451 million USD reported in 2020. A temporary contraction was observed in 2022, where assets decreased to 143,932 million USD, followed by a recovery back to baseline levels in 2023 and 2024.
- Return on Assets (ROA) Performance
- The ROA decreased from a high of 5.44% in 2020 to a period low of 2.20% in 2024. Because the total asset base remained stable, the decline in ROA is directly attributable to the diminishing net income. The ratio fluctuated in alignment with earnings, showing a dip in 2021 (3.46%), a recovery in 2022 (4.63%), and a final sharp descent through 2023 and 2024.
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