Stock Analysis on Net

Elevance Health Inc. (NYSE:ELV)

$24.99

Analysis of Liquidity Ratios

Microsoft Excel

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Liquidity Ratios (Summary)

Elevance Health Inc., liquidity ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio
Quick ratio
Cash ratio

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 ratios over the five-year period reveals several noteworthy trends related to liquidity management.

Current Ratio
The current ratio exhibited a gradual decline from 1.55 in 2020 to 1.4 in 2022, indicating a slight reduction in the company's ability to cover short-term liabilities with current assets during this period. Thereafter, a moderate recovery was observed, with ratios increasing to 1.44 in 2023 and 1.45 in 2024. Despite the slight rebound, the ratio remained below the initial 2020 value, suggesting cautious management of working capital.
Quick Ratio
The quick ratio followed a downward trajectory from 1.42 in 2020 to 1.27 in 2022, reflecting a decline in the company's liquidity when excluding inventories. This was followed by a modest improvement in 2023 and 2024, reaching 1.3 and 1.32 respectively. This pattern parallels the current ratio trend, indicating persistent but slightly alleviated pressure on liquid asset availability.
Cash Ratio
The cash ratio showed a consistent decrease across the entire period, from 1.04 in 2020 to 0.85 in 2024. This steady decline suggests diminishing cash and cash-equivalent reserves relative to current liabilities. Unlike the other liquidity measures, no recovery was observed in the last two years, signaling a potential tightening of immediate cash resources.

In summary, the company experienced a general decline in liquidity ratios over the initial three years, signaling reduced short-term financial flexibility. Although the current and quick ratios demonstrated some recovery in the latter years, the cash ratio's continued decline may point to a more conservative cash position or utilization of cash reserves. These patterns highlight evolving liquidity management strategies and potential changes in working capital structure.


Current Ratio

Elevance Health Inc., current ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Current assets
Current liabilities
Liquidity Ratio
Current ratio1
Benchmarks
Current Ratio, Competitors2
Abbott Laboratories
CVS Health Corp.
Intuitive Surgical Inc.
Medtronic PLC
UnitedHealth Group Inc.
Current Ratio, Sector
Health Care Equipment & Services
Current Ratio, 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
Current ratio = Current assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.

The analysis of the annual financial data reveals several notable trends regarding liquidity and short-term financial stability over the five-year period.

Current Assets
Current assets demonstrated a steady growth from US$45,751 million at the end of 2020 to US$60,029 million by the end of 2023. However, there is a slight decline in 2024, with current assets falling to US$58,942 million. Overall, this indicates an upward trend in liquid and short-term assets held over the period, contributing positively to the company's liquidity base.
Current Liabilities
Current liabilities also increased consistently from US$29,453 million in 2020 to US$41,791 million in 2023, followed by a small reduction to US$40,581 million in 2024. The increase in short-term obligations parallels the growth observed in current assets, suggesting an expansion in the company’s operational scale or increased short-term financing requirements.
Current Ratio
The current ratio exhibits a gradual decline from 1.55 in 2020 to 1.40 in 2022, indicating a reduction in short-term liquidity relative to current liabilities during this period. However, the ratio recovers slightly in 2023 and 2024, rising to 1.44 and 1.45 respectively. Despite the initial decline, the ratio remains above 1.4 throughout, suggesting that the company maintains a comfortable margin to cover its short-term liabilities with current assets.

In summary, both current assets and current liabilities increased substantially over the five years, reflecting growth in the scale of operations. The current ratio shows a slight downward trend initially but stabilizes above 1.4 later, indicating efficient management of short-term liquidity risks despite growing obligations. The minor decrease in current assets and liabilities in 2024 warrants attention but does not significantly impact the overall liquidity position.


Quick Ratio

Elevance Health Inc., quick ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cash and cash equivalents
Fixed maturity securities
Equity securities
Premium receivables
Self-funded receivables
Other receivables
Total quick assets
 
Current liabilities
Liquidity Ratio
Quick ratio1
Benchmarks
Quick Ratio, Competitors2
Abbott Laboratories
CVS Health Corp.
Intuitive Surgical Inc.
Medtronic PLC
UnitedHealth Group Inc.
Quick Ratio, Sector
Health Care Equipment & Services
Quick Ratio, 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
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.

Total Quick Assets
The total quick assets show a consistent upward trend from 41,691 million US dollars in 2020 to 54,234 million in 2023, indicating an increase in highly liquid assets available to meet short-term obligations. However, there is a slight decline in 2024 to 53,752 million, which may suggest a small reduction in liquid asset accumulation or a shift in asset composition.
Current Liabilities
Current liabilities have increased steadily from 29,453 million US dollars in 2020 to 41,791 million in 2023, reflecting growing short-term obligations. In 2024, current liabilities slightly decrease to 40,581 million, indicating a minor reduction in immediate financial obligations.
Quick Ratio
The quick ratio demonstrates a gradual decline from 1.42 in 2020 to 1.27 in 2022, suggesting a decreasing coverage of current liabilities by quick assets over this period. Subsequently, there is a moderate improvement in 2023 and 2024, reaching 1.3 and 1.32 respectively, which implies a recovery in the ability to cover short-term liabilities with liquid assets. Despite this improvement, the quick ratio in 2024 remains below the 2020 level, indicating a slightly lower liquidity buffer compared to the beginning of the analyzed period.

Cash Ratio

Elevance Health Inc., cash ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cash and cash equivalents
Fixed maturity securities
Equity securities
Total cash assets
 
Current liabilities
Liquidity Ratio
Cash ratio1
Benchmarks
Cash Ratio, Competitors2
Abbott Laboratories
CVS Health Corp.
Intuitive Surgical Inc.
Medtronic PLC
UnitedHealth Group Inc.
Cash Ratio, Sector
Health Care Equipment & Services
Cash Ratio, 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
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.

The financial data reveals several noteworthy trends over the five-year period under review. Total cash assets experienced a steady increase from 30,733 million US dollars at the end of 2020 to a peak of 36,369 million US dollars by the end of 2023, followed by a slight decline to 34,681 million US dollars in 2024. This indicates a general upward trajectory in available cash resources with a minor reduction in the most recent year.

Current liabilities showed a consistent upward trend throughout the period, rising from 29,453 million US dollars in 2020 to 40,581 million US dollars in 2024. This growth in liabilities has outpaced the growth in cash assets, signifying an increasing level of short-term financial obligations.

Correspondingly, the cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, declined over the years. The ratio dropped from 1.04 in 2020 to 0.85 in 2024, indicating a reduced margin of liquidity relative to current liabilities. The decline in this ratio suggests a tightening liquidity position, despite the firm maintaining substantial cash reserves.

Total Cash Assets
Steady increase until 2023, slight decrease in 2024.
Current Liabilities
Continuous growth from 2020 through 2024, surpassing growth in cash assets.
Cash Ratio
Gradual decline from above 1 in 2020 to 0.85 in 2024, indicating decreasing liquidity coverage.

In summary, the data reflects a company that has increased its cash holdings but has taken on proportionally more current liabilities, leading to reduced liquidity as measured by the cash ratio. This trend points to a growing reliance on short-term obligations and a potential need to monitor liquidity management closely going forward.