Elevance Health Inc. (NYSE:ELV)

An analysis of the short-term operating activity ratios reveals a general trend of decelerating receivables collection and an acceleration in the settlement of payables, contributing to a shift in the organization's operating cycle efficiency over the observed period.

Receivables Management

A downward trend in receivables turnover is evident, declining from a high of 19.84 in September 2024 to 14.30 by March 31, 2026. This contraction is mirrored in the average receivable collection period, which has expanded from a low of 18 to 19 days in 2022 to a peak of 26 days by the end of the period. This indicates a gradual slowdown in the speed at which credit sales are converted into cash.

Payables Management

Payables turnover has demonstrated a modest but consistent upward trajectory, rising from 7.28 in March 2022 to 8.06 by March 2026. Consequently, the average payables payment period has shortened from 50 days in early 2022 to 45 days in early 2026, with a temporary dip to 42 days in December 2025. This suggest a trend toward more rapid settlement of obligations to suppliers.

Working Capital Utilization

The working capital turnover ratio exhibits significant volatility, peaking at 9.11 in September 2022 before fluctuating between 6.87 and 8.59 throughout the remainder of the period. The lack of a linear trend suggests that changes in current assets and liabilities are not scaling proportionally with revenue growth, leading to intermittent shifts in capital efficiency.

Overall, the convergence of an increasing collection period and a decreasing payment period suggests a tightening of the cash conversion cycle, which may indicate an increased reliance on available liquidity to fund short-term operations.

The analysis of short-term operating activity reveals a period of sustained growth in premium volumes accompanied by a gradual decline in receivables turnover efficiency. While premiums increased steadily over the analyzed period, the growth in net premium receivables has exerted downward pressure on the turnover ratio, indicating a slower rate of collection relative to revenue generation.

Premium and Receivables Growth

Premiums exhibited a consistent upward trajectory, rising from $32.79 billion in March 2022 to $41.02 billion by March 2026. During the same period, net premium receivables increased from $7.35 billion to $11.53 billion. The expansion of the receivables balance suggests that a larger volume of capital remains tied up in unpaid premiums as the scale of operations increases.

Receivables Turnover Volatility

The turnover ratio demonstrates significant quarterly fluctuation, suggesting a cyclical pattern in collection activity. Performance typically peaks in the third quarter, with notable highs of 19.51 in September 2022 and 19.84 in September 2024. Conversely, troughs are frequently observed in the first quarter of the year, reaching a period low of 14.30 in March 2026.

Long-term Efficiency Trend

A comparative analysis of year-over-year first-quarter data indicates a steady erosion of collection efficiency. The turnover ratio declined from 16.67 in March 2022 to 15.98 in March 2023, 14.42 in March 2024, and finally to 14.30 in March 2026. This downward trend reflects a lengthening of the average collection period over the four-year span, despite the overall increase in premium revenue.

The analysis of short-term operating activity reveals a general upward trend in payables turnover from March 2022 through December 2025, indicating an increase in the frequency with which medical claims are settled. While the turnover ratio experienced a slight correction in the first quarter of 2026, the overall trajectory suggests improved efficiency in the management of claims liabilities relative to the volume of benefit expenses.

Benefit Expense Trends

Benefit expenses demonstrated a consistent growth pattern for the majority of the period, rising from 28,215 million US dollars in March 2022 to a peak of 38,140 million US dollars in September 2025. This represents a significant expansion in the cost of healthcare benefits delivered. A moderate decline is noted in the final quarter of the analysis, with expenses adjusting to 35,615 million US dollars by March 2026.

Medical Claims Payable Dynamics

Medical claims payables exhibited a gradual and steady increase, moving from 14,713 million US dollars in March 2022 to 18,425 million US dollars by March 2026. The growth in payables was less aggressive than the growth in benefit expenses, which contributed to the expansion of the turnover ratio.

Payables Turnover Analysis

The payables turnover ratio increased from 7.28 in March 2022 to a peak of 8.68 in December 2025. This progression indicates that the organization accelerated its payment cycle over time. Between March 2024 and December 2025, the ratio consistently remained above 7.80, signaling a more rapid transition of claims from liability to payment. The subsequent drop to 8.06 in March 2026 suggests a seasonal shift or a strategic adjustment in payment timing at the start of the new fiscal year.

The financial trajectory from March 2022 to March 2026 indicates a significant expansion in working capital accompanied by a steady, then accelerated, increase in premium revenue. While both metrics trended upward, the growth in working capital frequently outpaced premium growth, leading to a general compression of the working capital turnover ratio over the observed period.

Working Capital Trends

A consistent upward trajectory is observed, with working capital increasing from 14,164 million USD in March 2022 to 21,723 million USD by March 2026. A notable period of expansion occurred between December 2022 and June 2023, with a subsequent peak of 22,900 million USD reached in September 2025. This suggests a sustained increase in the company's short-term net asset position over the four-year span.

Premium Revenue Growth

Premiums exhibited gradual growth from 32,785 million USD in March 2022, remaining largely within the 33,000 to 36,000 million USD range through December 2024. A significant shift occurred in March 2025, where premiums stepped up to a new baseline exceeding 40,000 million USD and remained at this elevated level through March 2026. This indicates a substantial increase in top-line operating activity starting in the first quarter of 2025.

Working Capital Turnover Efficiency

The working capital turnover ratio reached an early peak of 9.11 in September 2022 before entering a period of decline, hitting a low of 6.87 in September 2023. Despite a temporary recovery to 8.59 in March 2024, the ratio largely remained lower than its 2022 levels, concluding at 7.59 in March 2026. The overall decline in the ratio suggests that the company required a progressively larger investment in working capital to generate each unit of premium income, indicating a decrease in short-term operating efficiency relative to the start of the period.

The average receivable collection period exhibits a general upward trajectory over the observed period, indicating a gradual extension in the time required to convert receivables into cash. While the collection cycle remained relatively stable between 19 and 22 days throughout 2022 and 2023, a more pronounced increase is evident from 2024 onward, culminating in a peak at the end of the analyzed timeframe.

Collection Period Trends

The duration for collecting receivables fluctuated between a minimum of 18 days and a maximum of 26 days. A period of high efficiency was maintained during the majority of 2022, where the cycle stabilized at 19 days for three consecutive quarters. However, the collection period began to lengthen more consistently starting in March 2024, rising from 23 days to 26 days by March 31, 2026.

Receivables Turnover Correlation

An inverse relationship is maintained between the receivables turnover ratio and the average collection period. The highest operational efficiency was recorded on September 30, 2024, characterized by a peak turnover ratio of 19.84 and a corresponding collection period of 18 days. Conversely, the lowest turnover ratio of 14.30 on March 31, 2026, aligns with the longest collection period of 26 days, reflecting a decline in the velocity of receivable recovery.

Quarterly Seasonality

A recurring seasonal pattern is observable, with collection periods typically peaking in the first quarter (March 31) and contracting in the second or third quarters. This cycle suggests periodic volatility in cash inflows or systematic delays in payment receipts at the beginning of the fiscal year, followed by a period of accelerated collection.

An analysis of the operating activity ratios reveals a consistent trend toward accelerated settlement of short-term obligations over the observed period from March 2022 through March 2026. This is characterized by a steady increase in the efficiency of payables management and a corresponding reduction in the time required to discharge liabilities to suppliers.

Payables Turnover

The payables turnover ratio demonstrated a general upward trajectory, rising from 7.28 in March 2022 to a peak of 8.68 in December 2025. While the ratio remained relatively stable between 7.47 and 7.61 throughout 2022 and 2023, a more pronounced acceleration began in June 2024, where the ratio climbed to 8.09 and continued to trend upward. This increase indicates that liabilities are being turned over more frequently, reflecting a more rapid cycle of procurement and payment.

Average Payables Payment Period

The average payables payment period exhibited a gradual compression, inversely correlating with the turnover ratio. Starting at 50 days in the first half of 2022, the payment period declined steadily to 47 days by December 2023. A further contraction occurred during 2024 and 2025, reaching a low of 42 days in December 2025. A slight correction to 45 days was observed in March 2026, though the period remained significantly lower than the 2022 baseline.

The synchronized movement of these two metrics suggests an intentional or systemic shift toward shorter payment cycles. The transition from a 50-day payment window to a range between 42 and 45 days indicates improved liquidity or a strategic decision to optimize supplier relationships through faster payments. The most significant period of efficiency gains occurred between June 2024 and December 2025, marking the most aggressive phase of payment acceleration within the analyzed timeframe.