Stock Analysis on Net

HCA Healthcare Inc. (NYSE:HCA)

This company has been moved to the archive! The financial data has not been updated since May 3, 2022.

Economic Value Added (EVA)

Microsoft Excel

Economic Profit

HCA Healthcare Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net operating profit after taxes (NOPAT)1 9,050 5,607 5,941 5,865 4,332
Cost of capital2 13.98% 13.60% 12.87% 13.30% 11.39%
Invested capital3 36,837 34,570 33,534 29,729 27,635
 
Economic profit4 3,900 906 1,625 1,912 1,183

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 9,05013.98% × 36,837 = 3,900

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. HCA Healthcare Inc. economic profit decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Net Operating Profit after Taxes (NOPAT)

HCA Healthcare Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income attributable to HCA Healthcare, Inc. 6,956 3,754 3,505 3,787 2,216
Deferred income tax expense (benefit)1 17 (109) 278 15 432
Increase (decrease) in equity equivalents2 17 (109) 278 15 432
Interest expense 1,566 1,584 1,824 1,755 1,690
Interest expense, operating lease liability3 94 98 98 94 90
Adjusted interest expense 1,660 1,682 1,922 1,849 1,780
Tax benefit of interest expense4 (349) (353) (404) (388) (623)
Adjusted interest expense, after taxes5 1,312 1,329 1,518 1,461 1,157
Net income (loss) attributable to noncontrolling interest 765 633 640 602 527
Net operating profit after taxes (NOPAT) 9,050 5,607 5,941 5,865 4,332

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in equity equivalents to net income attributable to HCA Healthcare, Inc..

3 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 2,147 × 4.40% = 94

4 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,660 × 21.00% = 349

5 Addition of after taxes interest expense to net income attributable to HCA Healthcare, Inc..

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. HCA Healthcare Inc. NOPAT decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Cash Operating Taxes

HCA Healthcare Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Provision for income taxes 2,112 1,043 1,099 946 1,638
Less: Deferred income tax expense (benefit) 17 (109) 278 15 432
Add: Tax savings from interest expense 349 353 404 388 623
Cash operating taxes 2,444 1,505 1,225 1,319 1,829

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. HCA Healthcare Inc. cash operating taxes increased from 2019 to 2020 and from 2020 to 2021.

Invested Capital

HCA Healthcare Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Long-term debt due within one year 237 209 145 788 200
Long-term debt due after one year, less debt issuance costs and discounts 34,342 30,795 33,577 32,033 32,858
Operating lease liability1 2,147 2,052 1,849 1,708 1,725
Total reported debt & leases 36,726 33,056 35,571 34,529 34,783
Stockholders’ equity (deficit) attributable to HCA Healthcare, Inc. (933) 572 (2,808) (4,950) (6,806)
Net deferred tax (assets) liabilities2 (395) (385) (300) (478) (510)
Equity equivalents3 (395) (385) (300) (478) (510)
Accumulated other comprehensive (income) loss, net of tax4 404 502 460 381 278
Noncontrolling interests 2,422 2,320 2,243 2,032 1,811
Adjusted stockholders’ equity (deficit) attributable to HCA Healthcare, Inc. 1,498 3,009 (405) (3,015) (5,227)
Construction in progress5 (1,387) (1,495) (1,632) (1,785) (1,921)
Invested capital 36,837 34,570 33,534 29,729 27,635

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of equity equivalents to stockholders’ equity (deficit) attributable to HCA Healthcare, Inc..

4 Removal of accumulated other comprehensive income.

5 Subtraction of construction in progress.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. HCA Healthcare Inc. invested capital increased from 2019 to 2020 and from 2020 to 2021.

Cost of Capital

HCA Healthcare Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 74,109 74,109 ÷ 114,797 = 0.65 0.65 × 19.67% = 12.70%
Long-term debt3 38,541 38,541 ÷ 114,797 = 0.34 0.34 × 4.60% × (1 – 21.00%) = 1.22%
Operating lease liability4 2,147 2,147 ÷ 114,797 = 0.02 0.02 × 4.40% × (1 – 21.00%) = 0.07%
Total: 114,797 1.00 13.98%

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in millions

2 Equity. See details »

3 Long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 60,291 60,291 ÷ 98,157 = 0.61 0.61 × 19.67% = 12.08%
Long-term debt3 35,814 35,814 ÷ 98,157 = 0.36 0.36 × 5.00% × (1 – 21.00%) = 1.44%
Operating lease liability4 2,052 2,052 ÷ 98,157 = 0.02 0.02 × 4.80% × (1 – 21.00%) = 0.08%
Total: 98,157 1.00 13.60%

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in millions

2 Equity. See details »

3 Long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 50,124 50,124 ÷ 88,999 = 0.56 0.56 × 19.67% = 11.08%
Long-term debt3 37,026 37,026 ÷ 88,999 = 0.42 0.42 × 5.20% × (1 – 21.00%) = 1.71%
Operating lease liability4 1,849 1,849 ÷ 88,999 = 0.02 0.02 × 5.30% × (1 – 21.00%) = 0.09%
Total: 88,999 1.00 12.87%

Based on: 10-K (reporting date: 2019-12-31).

1 US$ in millions

2 Equity. See details »

3 Long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 48,621 48,621 ÷ 83,216 = 0.58 0.58 × 19.67% = 11.49%
Long-term debt3 32,887 32,887 ÷ 83,216 = 0.40 0.40 × 5.50% × (1 – 21.00%) = 1.72%
Operating lease liability4 1,708 1,708 ÷ 83,216 = 0.02 0.02 × 5.50% × (1 – 21.00%) = 0.09%
Total: 83,216 1.00 13.30%

Based on: 10-K (reporting date: 2018-12-31).

1 US$ in millions

2 Equity. See details »

3 Long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 35,284 35,284 ÷ 71,698 = 0.49 0.49 × 19.67% = 9.68%
Long-term debt3 34,689 34,689 ÷ 71,698 = 0.48 0.48 × 5.20% × (1 – 35.00%) = 1.64%
Operating lease liability4 1,725 1,725 ÷ 71,698 = 0.02 0.02 × 5.20% × (1 – 35.00%) = 0.08%
Total: 71,698 1.00 11.39%

Based on: 10-K (reporting date: 2017-12-31).

1 US$ in millions

2 Equity. See details »

3 Long-term debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

HCA Healthcare Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit1 3,900 906 1,625 1,912 1,183
Invested capital2 36,837 34,570 33,534 29,729 27,635
Performance Ratio
Economic spread ratio3 10.59% 2.62% 4.85% 6.43% 4.28%
Benchmarks
Economic Spread Ratio, Competitors4
Abbott Laboratories 0.84% -2.43% -3.75%
Cigna Group -0.07% 2.82% -0.39%
CVS Health Corp. 0.10% 0.53% -0.25%
Danaher Corp. -1.99% -3.39% -6.79%
Elevance Health Inc. 1.23% -0.76% 0.08%
Humana Inc. 2.86% 9.74% 7.88%
Intuitive Surgical Inc. 20.76% 8.74% 25.42%
Medtronic PLC -3.99% -3.13% -2.04% -5.62%
UnitedHealth Group Inc. 4.76% 5.33% 5.35%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 3,900 ÷ 36,837 = 10.59%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. HCA Healthcare Inc. economic spread ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Economic Profit Margin

HCA Healthcare Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit1 3,900 906 1,625 1,912 1,183
Revenues 58,752 51,533 51,336 46,677 43,614
Performance Ratio
Economic profit margin2 6.64% 1.76% 3.17% 4.10% 2.71%
Benchmarks
Economic Profit Margin, Competitors3
Abbott Laboratories 1.21% -4.24% -6.84%
Cigna Group -0.04% 1.66% -0.24%
CVS Health Corp. 0.05% 0.27% -0.14%
Danaher Corp. -4.97% -9.93% -22.02%
Elevance Health Inc. 0.58% -0.36% 0.04%
Humana Inc. 1.06% 2.80% 2.31%
Intuitive Surgical Inc. 16.33% 8.96% 18.84%
Medtronic PLC -9.58% -7.70% -4.84% -13.31%
UnitedHealth Group Inc. 2.34% 2.72% 2.61%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Economic profit. See details »

2 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × 3,900 ÷ 58,752 = 6.64%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. HCA Healthcare Inc. economic profit margin deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.