Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Aggregate Accruals
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Profitability Ratios (Summary)
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 analysis of the provided financial data reveals several key trends in profitability and return metrics over the five-year period ending in 2024.
- Gross profit margin
- The gross profit margin shows a steady decline from 14.43% in 2020 to 10.15% in 2024. This indicates a reduction in the company's efficiency at generating profit from its revenue at the gross level, suggesting increasing cost pressures or pricing challenges affecting the core profitability before operating expenses.
- Operating profit margin
- This margin follows a similar downward trend, decreasing from 5.12% in 2020 to 3.83% in 2024. The gradual decline over the years points to increasing operating costs or reduced operational efficiency, affecting earnings before interest and taxes.
- Net profit margin
- The net profit margin decreases more sharply, from 5.31% in 2020 to 1.4% in 2024. This suggests that after all expenses, including taxes and interest, the company retains a significantly smaller portion of its revenue as profit in recent years. The volatility within the period shows some recovery attempts in 2022, but the general trend remains downward.
- Return on equity (ROE)
- ROE demonstrates a decrease from 16.81% in 2020 to 8.37% in 2024, indicating diminishing efficiency in using shareholders' equity to generate profits. Despite some fluctuations, the overall trend points to lower profitability from the perspective of equity investors.
- Return on assets (ROA)
- The ROA metric also declines from 5.44% in 2020 to 2.2% in 2024. This reduction reflects decreasing effectiveness in utilizing the company's assets to generate earnings, which may be linked to the falling profit margins and potentially increased asset base without proportional income growth.
Overall, the financial indicators reveal a consistent weakening in profitability and returns over the period. Margins are contracting, and key performance ratios such as ROE and ROA show reduced efficiency in capital and asset utilization. These patterns suggest challenges in maintaining profitable growth and operational leverage, highlighting areas that may require strategic review and cost management initiatives.
Return on Sales
Return on Investment
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 | ||||||
| Revenues from external customers | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue from external customers has shown a consistent upward trend over the five-year period. Starting from approximately 159 billion US dollars at the end of 2020, it increased each year, reaching nearly 246 billion US dollars by the end of 2024. This reflects a strong growth trajectory in the company's sales or service income over the timeframe analyzed.
- Gross Profit Analysis
- Gross profit has experienced fluctuations throughout the period. It initially decreased from about 22.96 billion US dollars in 2020 to 21.41 billion in 2021. Thereafter, it rebounded moderately in 2022, and continued to grow in 2023 and 2024, nearing 25 billion US dollars by the end of 2024. Despite the increasing absolute gross profit in the later years, the initial dip suggests some short-term margin pressures or elevated costs in 2021.
- Gross Profit Margin Dynamics
- The gross profit margin percentage presents a declining trend across the reported years. Beginning at 14.43% in 2020, the margin steadily declined to 10.15% by the end of 2024. This reduction indicates that despite revenue growth, the proportion of gross profit relative to revenues is shrinking, potentially due to rising cost of goods sold or increased operational expenses impacting profitability efficiency.
- Overall Insights
- While revenue growth indicates expanding business volume or pricing power, the decreasing gross profit margin suggests that cost management or pricing strategy may warrant closer attention. The combination of rising gross profit in absolute terms with declining margins highlights that while the company is generating more revenue and gross profit in total dollars, it is becoming less efficient at converting revenues into gross profit on a relative basis. This pattern may imply increasing cost pressures or competitive dynamics affecting profitability levels.
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 | ||||||
| Revenues from external customers | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Income from Operations
- Income from operations showed a fluctuating but generally upward trend over the period. It decreased slightly from 8,153 million USD in 2020 to 7,935 million USD in 2021, then increased consistently to reach 9,417 million USD in 2024. This indicates a recovery after the initial dip and a strong growth trajectory in recent years.
- Revenues from External Customers
- Revenues from external customers demonstrated steady and significant growth throughout the period. Starting at 159,157 million USD in 2020, revenues rose incrementally each year to 246,148 million USD in 2024. The increase was particularly notable in 2024, showing a sharp rise compared to previous years, suggesting expansion in market reach or increased sales volume.
- Operating Profit Margin
- The operating profit margin exhibited a consistent decline over the analysis period, moving from 5.12% in 2020 to 3.83% in 2024. Despite fluctuations in income from operations and strong revenue growth, the margin contraction indicates increased costs or lower operational efficiency relative to revenue during these years.
- Overall Analysis
- While income and revenues increased substantially over the five-year period, the declining operating profit margin suggests rising costs or margin pressures impacting profitability. This combination points to growth in scale but reduced profitability efficiency, which may warrant further investigation into cost management and operational strategies.
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 | ||||||
| Revenues from external customers | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Shareholders’ Net Income
- The shareholders' net income displayed a declining trend over the analyzed period. Beginning at 8,458 million US dollars in 2020, the net income decreased sharply to 5,365 million in 2021. A moderate recovery occurred in 2022, with net income rising to 6,668 million, but this was followed by another decline to 5,164 million in 2023 and further down to 3,434 million in 2024. Overall, the net income dropped by more than half from 2020 to 2024, indicating potential challenges in profitability or increased costs affecting the company’s bottom line.
- Revenues from External Customers
- The revenue from external customers showed a consistent upward trend throughout the five-year period. Starting at 159,157 million US dollars in 2020, the revenues increased steadily year over year, reaching 172,529 million in 2021, 179,361 million in 2022, and 194,099 million in 2023. The most notable growth occurred between 2023 and 2024, where the revenue surged to 246,148 million. This upward trajectory suggests expanding sales or service provision and increasing market demand for the company’s offerings.
- Net Profit Margin
- The net profit margin exhibited a declining pattern from 2020 to 2024. It started relatively healthy at 5.31% in 2020 but decreased significantly to 3.11% in 2021. A slight improvement took place in 2022, raising the margin to 3.72%, yet the margin declined again sharply to 2.66% in 2023 and further halved to 1.4% in 2024. This decline in profitability relative to revenue indicates that despite rising revenues, the company is experiencing reduced efficiency in converting sales into actual profits, potentially due to rising costs, pricing pressure, or other operational inefficiencies.
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 | ||||||
| Shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| ROE, Sector | ||||||
| Health Care Equipment & Services | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Shareholders’ Net Income
- The shareholders’ net income displays a fluctuating trend over the five-year period. It began at $8,458 million in 2020 and declined significantly to $5,365 million in 2021. There was a partial recovery in 2022 to $6,668 million, followed by another decline in 2023 to $5,164 million, and a further decrease in 2024 to $3,434 million. Overall, the net income has shown a downward trajectory since 2020 with intermittent recovery years not fully offsetting previous declines.
- Shareholders’ Equity
- The shareholders’ equity shows a consistent downward trend over the period. Starting from $50,321 million in 2020, it decreased to $47,112 million in 2021 and continued to fall each subsequent year, reaching $41,033 million by the end of 2024. This steady decline indicates a reduction in the net value of the company attributable to shareholders, which may reflect accumulated losses or distributions exceeding earnings.
- Return on Equity (ROE)
- The ROE follows a generally declining pattern, beginning at 16.81% in 2020. It decreased sharply to 11.39% in 2021, slightly rebounded to 14.86% in 2022, and then continued a decline to 11.17% in 2023, ending at 8.37% in 2024. This declining ROE trend indicates deteriorating efficiency in generating profits from shareholders' equity, aligning with the declines observed in net income and equity levels.
Return on Assets (ROA)
Cigna Group, ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Shareholders’ net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| ROA, Sector | ||||||
| Health Care Equipment & Services | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Shareholders’ Net Income
- The net income exhibited a fluctuating trend over the five-year period. It started at a high of 8,458 million US dollars in 2020, decreased significantly to 5,365 million in 2021, then rose to 6,668 million in 2022. However, the following two years saw a decline, with net income dropping to 5,164 million in 2023 and further to 3,434 million in 2024. This indicates an overall weakening in profitability, especially noticeable in the last two years.
- Total Assets
- The total assets showed relative stability with minor fluctuations. The asset base was 155,451 million US dollars in 2020, slightly declining to 154,889 million in 2021 and then more noticeably decreasing to 143,932 million in 2022. The assets rebounded in 2023 to 152,761 million and continued to grow slightly to 155,881 million in 2024. This pattern suggests some mid-term contraction followed by recovery toward the end of the period assessed.
- Return on Assets (ROA)
- The ROA declined steadily over the five years, starting at 5.44% in 2020 and falling sharply to 3.46% in 2021. There was a modest recovery to 4.63% in 2022, but the ratio again decreased to 3.38% in 2023 and further dropped to 2.2% in 2024. This trend reflects diminishing efficiency in generating profits from the assets, aligning with the decline observed in net income despite the stabilization of total assets.
- Overall Insights
- The combined analysis of net income, total assets, and ROA reveals a pattern of declining profitability and efficiency after 2020. Although the asset base remained relatively stable with a temporary contraction, the company's ability to convert assets into net income weakened notably. The significant drop in net income and ROA in the last two years indicates potential operational challenges or market pressures impacting earnings quality. This calls for a focused review of operational effectiveness and profit drivers to address the downward trend in returns.