Elevance Health Inc. (NYSE:ELV)

The financial performance over the periods shows notable patterns in key profitability and leverage metrics. Analysis of these indicators reveals insights into efficiency, risk, and shareholder returns.

Return on Assets (ROA)

The ROA experienced an overall upward trend from the first quarter of 2021, starting at 4.93%, peaking in late 2021 around 6.26%, indicating improving asset utilization efficiency. However, starting in early 2022, ROA demonstrated a gradual decline, falling back to the mid-4% range by the final periods tracked in 2025. This suggests a deceleration in the ability to generate profits from the company's asset base over the longer term.

Financial Leverage

Financial leverage ratios were relatively stable throughout the observed timeline, fluctuating slightly within a narrow band between approximately 2.66 and 2.92. The leverage ratio peaked near 2.92 in early 2023 but showed a slight declining trend thereafter before stabilizing in 2025. This stability indicates consistent use of debt relative to equity, maintaining a moderate leverage posture without significant increases in financial risk.

Return on Equity (ROE)

ROE mirrored the pattern of ROA but with greater volatility. It started near 13.92% in early 2021, rose sharply to a high of approximately 17.36% in early 2022, reflecting strong returns to shareholders possibly supported by leverage and profitability improvements. Following this peak, ROE followed a declining trajectory, reaching a level near 12.26% in mid-2025. The decline in ROE is consistent with the contraction in ROA, possibly indicating a reduction in net income or efficiency, coupled with relatively stable financial leverage.

Overall, the analysis suggests the company initially improved operational efficiency and returned enhanced value to shareholders through 2021 and early 2022. However, recent years display a period of declining profitability metrics, while maintaining a steady leverage policy. This could suggest emerging challenges in asset utilization or earnings generation, requiring attention to sustain shareholder returns in the future.

The quarterly financial data reveals notable trends and fluctuations across key performance metrics over the observed periods.

Net Profit Margin (%)

The net profit margin exhibits a fluctuating yet generally declining pattern from March 31, 2021, to September 30, 2025. Initially, there is a slight decrease from 3.82% to 3.32%, followed by recovery and stabilization around 4.0% in late 2021 and early 2022. From 2023 onward, the margin gradually decreases from approximately 3.89% to 2.85%-2.86% by the final quarters, indicating compressing profitability relative to revenues over time.

Asset Turnover (ratio)

Asset turnover shows a consistent upward trend across the reported quarters, rising from 1.29 to 1.57. This steady increase suggests improving operational efficiency in utilizing assets to generate sales. The ratio growth is gradual and sustained, with no significant reversals, implying effective asset management and potential expansion in revenue generation capacity.

Financial Leverage (ratio)

Financial leverage ratios fluctuate moderately but maintain a relatively stable range between approximately 2.66 and 2.92. After an initial decline from 2.83 to around 2.7 in late 2021, the leverage increases slightly through 2023 before dipping again towards 2024 and stabilizing near the lower end of the range by September 2025. This stability indicates a consistent reliance on debt financing or equity structure without major shifts in capital composition.

Return on Equity (ROE) (%)

The return on equity shows strong performance in 2021 and early 2022, reaching peaks over 17%. However, from 2023 onward, ROE gradually declines, moving from about 16.6% down to roughly 12.3%-12.6% by the closing periods in 2025. This decline reflects diminishing efficiency in generating shareholder returns, potentially driven by the falling net profit margins despite improving asset turnover and stable financial leverage.

Overall, the company demonstrates increasing efficiency in asset utilization evidenced by rising asset turnover, but faces challenges in maintaining profitability margins and ROE in later periods. Financial leverage remains stable, suggesting no significant changes in the capital structure. The combination of these factors indicates operational improvements offset by margin compression, resulting in lower overall returns to shareholders in the most recent periods.

Tax Burden

The tax burden ratio remained relatively stable throughout the observed periods, fluctuating narrowly around the 0.75 to 0.78 range. This consistency suggests a steady effective tax rate affecting net income after interest expenses.

Interest Burden

The interest burden ratio showed a gradual decline over time, decreasing from 0.89 in early 2021 to 0.84 by late 2025. This trend indicates an improving position in terms of interest expenses relative to earnings before interest and taxes, signifying reduced interest costs or improved interest coverage.

EBIT Margin

The EBIT margin exhibited some variability but generally trended downward after peaking near 6.38% at the end of 2021. From early 2023 onwards, the margin progressively decreased, falling to approximately 4.39% by the last quarter of 2025. This decline may signal rising operating costs or margin compression within the company's core operations.

Asset Turnover

The asset turnover ratio showed a gradual upward trend over the periods reviewed. Starting from 1.29 in early 2021, it increased to 1.57 by late 2025. This indicates improved efficiency in utilizing assets to generate sales or revenue, reflecting potentially better operational performance or asset management.

Financial Leverage

Financial leverage exhibited minor fluctuations but remained generally consistent, staying close to an average ratio near 2.8 throughout the analyzed timeframe. There is a slight reduction around 2023-2024 but overall leverage levels suggest steady use of debt relative to equity.

Return on Equity (ROE)

The ROE displayed variability, increasing from 13.92% at the start of 2021 to a peak of about 17.36% in early 2022, followed by a gradual decline thereafter. By late 2025, ROE decreased to approximately 12.59%. The initial rise reflects improved profitability or leverage effects, whereas the later decline corresponds with the falls in EBIT margin and interest burden ratio, indicating pressure on overall equity returns.

The financial data reveals several notable trends across the examined periods for key profitability and efficiency metrics.

Net Profit Margin (%)

The net profit margin initially rose to a high of 4.46% by the end of 2021, followed by a gradual decline with some fluctuations throughout 2022 and 2023. Starting from early 2024, the margin displays a downward trajectory reaching approximately 2.86% by the third quarter of 2025. This suggests a weakening in the company's ability to convert revenue into net profit over the most recent periods.

Asset Turnover (ratio)

The asset turnover ratio has shown a consistent upward trend over the entire timeline, increasing from 1.29 in early 2021 to 1.57 by late 2025. This steady increase indicates improving efficiency in using assets to generate sales, reflecting better operational performance or asset management capabilities.

Return on Assets (ROA) (%)

ROA peaked at 6.26% at the end of 2021 and then experienced a slow but steady decline through 2022 and into 2023. It shows some stabilization around mid-2024 before diminishing again towards 4.51% by the third quarter of 2025. The decline in ROA suggests that despite improvements in asset utilization, overall profitability relative to assets is weakening, likely impacted by narrowing profit margins.

Overall, the company demonstrates enhanced asset efficiency as evidenced by the rising asset turnover ratio. However, the declining profit margins and return on assets highlight pressures on profitability, which could be due to increased costs, pricing challenges, or other operational factors impacting net earnings. This combination of trends warrants further investigation into cost control and revenue management strategies to sustain and improve profitability.

Tax Burden

The tax burden has remained relatively stable over the observed periods, fluctuating slightly around the 0.75 to 0.78 range. There is a minor decline observed toward the later periods, reaching lows of around 0.76 before increasing again to 0.78 at the most recent date. This indicates consistent tax expenses relative to earnings before tax.

Interest Burden

The interest burden ratio shows a gradual declining trend from 0.89 in early 2021 to 0.84 by late 2025. This steady decrease suggests an improvement in the company’s ability to manage interest expenses relative to its EBIT, which may reflect reduced debt levels or more favorable interest terms over time.

EBIT Margin

EBIT margin fluctuates throughout the timeframe, starting at 5.75% in the first quarter of 2021 and peaking slightly above 6% during 2021 and early 2022. However, from mid-2023 onward, there is a noticeable downward trend, dropping to approximately 4.39% by the final period. This decline indicates a reduction in operational profitability as a percentage of revenues, potentially reflecting increased costs or pricing pressures.

Asset Turnover

Asset turnover demonstrates a steady increase over the entire period under review, starting from 1.29 and progressively rising to 1.57 by late 2025. This trend signals an enhanced efficiency in utilizing assets to generate revenue, with a consistent improvement in how effectively the company uses its asset base.

Return on Assets (ROA)

ROA exhibits some volatility, beginning at 4.93% and climbing to a peak of approximately 6.26% in late 2021. However, following this peak, there is a gradual decline, bringing ROA down to around 4.51% by the last period. This pattern suggests that despite improvements in asset turnover, profitability on assets has weakened in the latter periods, likely influenced by the declining EBIT margin and interest burden dynamics.

The financial data reveals several noteworthy trends in the company's profitability and operational efficiency ratios over the observed periods. The tax burden ratio remains relatively stable, fluctuating narrowly around the 0.75 to 0.78 range. This steadiness indicates consistent relative tax expenses in relation to earnings before tax, suggesting no significant changes in tax strategies or tax rates impacting the company's effective tax rate throughout the time frame.

The interest burden ratio exhibits a mild downward trend over time, starting near 0.89 and gradually declining to approximately 0.84 by the end of the most recent period. This suggests a slight increase in interest expenses relative to earnings before interest and taxes, potentially reflecting growing debt levels or higher interest costs, which may be exerting a modest pressure on the company's earnings before tax.

Analyzing the EBIT margin, a gradual decrease can be observed, albeit with some fluctuations. Initially, the margin rises to a peak of just over 6% but begins a slow decline thereafter, dropping to below 4.5% by the last quarter. This diminishing trend in the EBIT margin may indicate increasing operating costs or pressures on the company's core profitability, possibly due to competitive forces, increased expenses, or changes in revenue mix.

The net profit margin mirrors the pattern seen in the EBIT margin but at a lower level, starting above 3.8% and falling below 3.0% by the end of the series. The narrowing gap between EBIT and net profit margins, combined with the stable tax burden and decreasing interest burden, suggests that while operating profitability is reduced, the company is relatively consistent in managing its financing costs and tax obligations. The overall decline in net profit margin highlights potential challenges in achieving bottom-line growth, implying that factors outside of financing and taxes, such as cost control or revenue growth, likely contribute to the downward pressure on profitability.

Tax Burden

Stable around 0.75-0.78, indicating consistent effective tax rates.

Interest Burden

Gradual decline from 0.89 to 0.84, suggesting a modest increase in interest expenses relative to EBIT.

EBIT Margin

Peaked near 6.4% early in the series but progressively decreased to approximately 4.4%, pointing to weakening operating profitability.

Net Profit Margin

Declined from about 3.8% to just below 3.0%, paralleling EBIT margin trends and highlighting overall profitability challenges.

In summary, the company demonstrates stable tax efficiency and a slight increase in interest burden, alongside a notable decline in operating and net profit margins over the analyzed periods. These patterns suggest attention may be warranted on operating cost management and revenue quality to sustain profitability in the future.