Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Short-term Activity Ratios (Summary)
Elevance Health Inc., short-term (operating) activity 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).
- Receivables turnover
- The receivables turnover ratio exhibited a decline over the five-year period, decreasing from 19.72 in 2020 to 18.00 in 2024. This trend indicates a gradual reduction in the company's efficiency in collecting its receivables.
- Payables turnover
- The payables turnover ratio showed relative stability with slight fluctuations, starting at 7.75 in 2020, dipping to 7.47 in 2022, and subsequently increasing to 8.10 in 2024. This suggests a modest improvement in the pace at which the company settles its payables toward the end of the period.
- Working capital turnover
- The working capital turnover ratio showed an overall upward trend from 6.39 in 2020, peaking at 8.37 in 2022, before experiencing a slight decline and stabilization around 7.83-7.85 in 2023 and 2024. This pattern may reflect improved utilization of working capital up to 2022, followed by a marginal decrease in efficiency.
- Average receivable collection period
- The average collection period measured in days was relatively stable, remaining near 19-20 days throughout the time frame. This consistency aligns with the decreasing receivables turnover, suggesting a slight elongation in the time taken to collect receivables as receivables turnover declined.
- Average payables payment period
- The average payables payment period experienced minor variability, increasing from 47 days in 2020 to 49 days in 2022, then decreasing to 45 days by 2024. This indicates that while the company initially extended payment terms, it began shortening the payment duration in the most recent years.
Turnover Ratios
Average No. Days
Receivables Turnover
Elevance Health Inc., receivables turnover 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) | ||||||
| Premiums | ||||||
| Premium receivables | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Receivables Turnover, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Receivables Turnover, 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
Receivables turnover = Premiums ÷ Premium receivables
= ÷ =
2 Click competitor name to see calculations.
- Premiums
-
Premiums have shown a steady increase over the five-year period. Starting at 104,109 million USD in 2020, premiums rose each year, reaching 144,166 million USD by 2024. This upward trend indicates consistent growth in the company's revenue generated from premiums.
- Premium Receivables
-
Premium receivables have also increased year over year, from 5,279 million USD in 2020 to 8,011 million USD in 2024. The growth in receivables is somewhat proportional to the growth in premiums, suggesting that while sales have increased, the amount of premiums yet to be collected has also risen.
- Receivables Turnover
-
The receivables turnover ratio has experienced a gradual decline over the period, moving from 19.72 in 2020 down to 18.00 in 2024. This decline suggests a slight decrease in the efficiency with which the company is collecting its premium receivables. A lower turnover ratio implies that premiums are being collected more slowly relative to the outstanding amounts.
- Overall Analysis
-
The company has demonstrated growth in premium revenue consistently over the years. However, the simultaneous increase in premium receivables combined with the slight decline in the receivables turnover ratio points to a potential increase in the average collection period. This trend indicates that while sales are rising, the company may need to focus on improving collections processes to maintain or enhance liquidity.
Payables Turnover
Elevance Health Inc., payables turnover 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) | ||||||
| Benefit expense | ||||||
| Medical claims payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Payables Turnover, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Payables Turnover, 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
Payables turnover = Benefit expense ÷ Medical claims payable
= ÷ =
2 Click competitor name to see calculations.
- Benefit Expense
- The benefit expense has shown a consistent upward trend over the five-year period. Starting at 88,045 million US dollars in 2020, it increased each year to reach 127,567 million US dollars by 2024. This represents a significant growth, indicating rising costs associated with the company's benefits, potentially reflecting higher claims, increased utilization, or inflationary pressures in the healthcare sector.
- Medical Claims Payable
- Medical claims payable also increased steadily from 11,359 million US dollars in 2020 to a peak of 16,111 million US dollars in 2023, before slightly declining to 15,746 million US dollars in 2024. The upward movement suggests a growing liability related to outstanding medical claims, aligning with the increasing benefit expenses. The slight decrease in 2024 may indicate improvements in claims processing or timely settlements.
- Payables Turnover
- The payables turnover ratio remained relatively stable over the period, fluctuating slightly but generally maintaining between 7.47 and 8.10. It dipped marginally from 7.75 in 2020 to 7.47 in 2022 but then improved to 8.10 by 2024. This stability and eventual improvement in turnover suggest that the company has maintained or enhanced its efficiency in managing payables, potentially improving cash flow management despite increasing expenses and liabilities.
Working Capital Turnover
Elevance Health Inc., working capital turnover 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) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Premiums | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Working Capital Turnover, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Working Capital Turnover, 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
Working capital turnover = Premiums ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibits a relatively stable pattern from 2020 to 2024, maintaining levels in the range of approximately 15.9 billion to 18.4 billion US dollars. There is a slight decline observed between 2020 and 2022, followed by a noticeable increase beginning in 2023 and continuing into 2024.
- Premiums
- Premium revenues demonstrate a consistent and strong upward trajectory over the five-year period. Starting at just over 104 billion US dollars in 2020, premiums increase each year, reaching more than 144 billion US dollars by 2024. This represents a cumulative growth of roughly 38% over the period analyzed.
- Working Capital Turnover Ratio
- The working capital turnover ratio, which measures the efficiency of working capital usage in generating premiums, shows a general increasing trend from 6.39 in 2020 to a peak of 8.37 in 2022. After this peak, there is a slight decline, stabilizing around 7.83 to 7.85 in the last two periods. Despite the slight recent decrease, the ratio remains significantly higher than the starting point, indicating improved efficiency over the longer term.
- Overall Insights
- The data indicates that while working capital remains relatively stable, the company has achieved substantial revenue growth through premiums over the five-year horizon. The improvement in the working capital turnover ratio suggests better utilization of capital resources to generate revenue, though the recent slight dip may warrant further observation. The combination of increased premiums and relatively steady working capital suggests a positive operational leverage effect, enhancing overall financial performance.
Average Receivable Collection Period
Elevance Health Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Average Receivable Collection Period, 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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibits a downward trend over the five-year period. Starting at 19.72 in 2020, it increased slightly to 20.66 in 2021 but then steadily declined to 18.81 in 2022, 18.08 in 2023, and further to 18 in 2024. This decline suggests a gradual decrease in the efficiency with which the company collects its receivables.
- Average Receivable Collection Period
- The average receivable collection period shows a corresponding upward trend, indicating that the number of days taken to collect receivables has increased. It started at 19 days in 2020, improved to 18 days in 2021, but then lengthened to 19 days in 2022 and stabilized at 20 days for both 2023 and 2024. This increase is consistent with the decline observed in the receivables turnover ratio and reflects slower collection times.
- Overall Analysis
- The inverse relationship between receivables turnover and the average collection period is clearly evident. The overall pattern suggests that the company’s receivables management has become less efficient from 2021 onward, leading to longer collection periods. Maintaining or improving collection efficiency could be an area for management focus to optimize working capital and cash flow.
Average Payables Payment Period
Elevance Health Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Average Payables Payment Period, 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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio shows a slight decline from 7.75 in 2020 to 7.47 in 2022, suggesting that the company took marginally longer to pay its suppliers during this period. However, from 2022 onwards, the ratio improved, rising to 7.72 in 2023 and further to 8.1 in 2024, indicating an acceleration in the rate at which the company settles its payables.
- Average Payables Payment Period
- The average payables payment period complements the trend observed in the payables turnover ratio. It increased from 47 days in 2020 to a peak of 49 days in 2022, reflecting a slight lengthening in payment terms or slower payment practices. Subsequently, this period contracted to 47 days in 2023 and further to 45 days in 2024, consistent with the company reducing the time taken to pay suppliers.
- Overall Analysis
- Overall, the data indicates that while the company experienced a gradual slowdown in payments between 2020 and 2022, reflected by a lower payables turnover and longer payment periods, it reversed this trend in the following years. By 2024, the company demonstrated improved efficiency in managing payables, characterized by a higher turnover ratio and shorter average payment period, which may positively impact supplier relationships and working capital management.