Stock Analysis on Net

UnitedHealth Group Inc. (NYSE:UNH)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

UnitedHealth Group Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Operating Assets
Total assets 273,720 245,705 212,206 197,289 173,889
Less: Cash and cash equivalents 25,427 23,365 21,375 16,921 10,985
Less: Short-term investments 4,201 4,546 2,532 2,860 3,260
Less: Assets under management 3,755 4,087 4,449 4,076 3,076
Operating assets 240,337 213,707 183,850 173,432 156,568
Operating Liabilities
Total liabilities 174,801 159,358 135,727 126,750 111,727
Less: Short-term borrowings and current maturities of long-term debt 4,274 3,110 3,620 4,819 3,870
Less: Long-term debt, less current maturities 58,263 54,513 42,383 38,648 36,808
Operating liabilities 112,264 101,735 89,724 83,283 71,049
 
Net operating assets1 128,073 111,972 94,126 90,149 85,519
Balance-sheet-based aggregate accruals2 16,101 17,846 3,977 4,630
Financial Ratio
Balance-sheet-based accruals ratio3 13.41% 17.32% 4.32% 5.27%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Abbott Laboratories 6.06% -0.73% -1.76% -1.55%
Cigna Group -0.99% -7.83% 4.17% -7.30%
CVS Health Corp. 16.15% -9.86% -3.68% -0.89%
Danaher Corp. 3.48% -1.55% 16.41% 52.50%
Elevance Health Inc. 7.14% 0.32% 14.93% -15.16%
Humana Inc. -11.37% -44.43% 111.97% 18.14%
Intuitive Surgical Inc. 15.55% -10.21% 50.02% -8.55%
Medtronic PLC 2.69% -1.37% 3.72% -1.48% 0.51%
Balance-Sheet-Based Accruals Ratio, Sector
Health Care Equipment & Services 8.27% -1.25% 5.99% 3.33%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 8.00% 2.36% 5.50% 10.57%

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

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 240,337112,264 = 128,073

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 128,073111,972 = 16,101

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 16,101 ÷ [(128,073 + 111,972) ÷ 2] = 13.41%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, UnitedHealth Group Inc. improved earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

UnitedHealth Group Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net earnings attributable to UnitedHealth Group common shareholders 22,381 20,120 17,285 15,403 13,839
Less: Cash flows from operating activities 29,068 26,206 22,343 22,174 18,463
Less: Cash flows used for investing activities (15,574) (28,476) (10,372) (12,532) (12,699)
Cash-flow-statement-based aggregate accruals 8,887 22,390 5,314 5,761 8,075
Financial Ratio
Cash-flow-statement-based accruals ratio1 7.40% 21.73% 5.77% 6.56%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Abbott Laboratories 3.55% -2.08% -3.29% -2.65%
Cigna Group -2.14% -7.06% 2.43% -6.53%
CVS Health Corp. 13.47% -6.15% -4.20% -2.54%
Danaher Corp. 8.20% 1.44% 18.48% 42.90%
Elevance Health Inc. 12.87% 8.35% 30.34% 4.96%
Humana Inc. 26.92% -7.68% 91.38% 24.85%
Intuitive Surgical Inc. 4.54% -20.88% 33.51% 10.64%
Medtronic PLC 1.80% -0.97% 0.35% 1.16% -2.45%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Health Care Equipment & Services 7.08% 1.89% 5.76% 3.91%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 8.56% 2.29% 6.44% 6.57%

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

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 8,887 ÷ [(128,073 + 111,972) ÷ 2] = 7.40%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, UnitedHealth Group Inc. improved earnings quality from 2022 to 2023.