Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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Economic Profit
UnitedHealth Group Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial trajectory between 2021 and 2025 reveals a significant reversal in value creation, transitioning from a period of robust growth to a state of economic value destruction. While the initial years showed a strong positive correlation between increasing operational profits and economic profit, a sharp divergence emerged after 2023, leading to a negative economic profit by the end of the period.
- Net Operating Profit After Taxes (NOPAT)
- A period of expansion is observed from 2021 to 2023, with NOPAT increasing from 18,910 million to a peak of 26,672 million. However, this trend reversed sharply in 2024 and 2025, with profits falling to 18,940 million and 15,617 million, respectively. The substantial decline in the final two years suggests a contraction in operational efficiency or a significant increase in operating expenses.
- Invested Capital and Cost of Capital
- Invested capital demonstrated a consistent upward trend through 2024, growing from 139,922 million to a peak of 198,557 million before a slight contraction to 197,568 million in 2025. Concurrently, the cost of capital remained relatively stable before trending downward from 9.41% in 2021 to 8.73% in 2025. Despite the lowering cost of capital, the absolute capital charge increased over time due to the expanded capital base.
- Economic Profit Performance
- Economic profit peaked in 2023 at 9,526 million, reflecting a period where NOPAT significantly exceeded the cost of invested capital. A precipitous decline occurred in 2024, with economic profit dropping to 610 million. By 2025, the figure reached -1,626 million, indicating that the company's operating returns were insufficient to cover the required return on its invested capital, resulting in a destruction of shareholder value.
The analysis indicates that the increase in invested capital during the growth phase became a liability during the subsequent profit decline. The combination of shrinking NOPAT and a high level of invested capital led to the collapse of economic profit, moving the organization from high value-added performance to a deficit in economic terms.
Net Operating Profit after Taxes (NOPAT)
UnitedHealth Group Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in receivables allowances.
3 Addition of increase (decrease) in unearned revenues.
4 Addition of increase (decrease) in equity equivalents to net earnings attributable to UnitedHealth Group common shareholders.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net earnings attributable to UnitedHealth Group common shareholders.
Net earnings attributable to UnitedHealth Group common shareholders and net operating profit after taxes (NOPAT) both demonstrate a pattern of initial growth followed by a subsequent decline over the five-year period. NOPAT exhibits a more pronounced increase initially, before experiencing a more significant decrease in later years.
- NOPAT Trend
- NOPAT increased from US$18,910 million in 2021 to US$26,672 million in 2023, representing a cumulative growth of approximately 41.1%. This indicates improving operational profitability during this timeframe. However, NOPAT then decreased to US$18,940 million in 2024 and further to US$15,617 million in 2025. This represents a decline of approximately 26.1% from the 2023 peak. The decrease in NOPAT in 2024 and 2025 suggests potential challenges in maintaining operational efficiency or increased costs.
- Net Earnings Trend
- Net earnings attributable to UnitedHealth Group common shareholders increased from US$17,285 million in 2021 to US$22,381 million in 2023, a growth of approximately 29.5%. Similar to NOPAT, net earnings then declined, reaching US$14,405 million in 2024 and US$12,056 million in 2025. This represents a decrease of approximately 46.3% from the 2023 high. The decline in net earnings mirrors the trend observed in NOPAT, suggesting a correlation between operational profitability and overall earnings.
- Relationship between NOPAT and Net Earnings
- While both metrics generally move in the same direction, NOPAT consistently exceeds net earnings throughout the period. This difference could be attributed to factors such as non-operating income or expenses, or differences in accounting treatment. The magnitude of the difference between NOPAT and net earnings remains relatively stable across the observed years.
The observed declines in both NOPAT and net earnings in 2024 and 2025 warrant further investigation to determine the underlying causes and potential implications for future performance.
Cash Operating Taxes
UnitedHealth Group Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The provision for income taxes and cash operating taxes both exhibited increasing values from 2021 to 2023, followed by declines in subsequent years. However, the magnitude and timing of these changes differed between the two items.
- Provision for Income Taxes
- The provision for income taxes increased from US$4,578 million in 2021 to US$5,704 million in 2022, representing a 24.6% increase. Further growth was observed in 2023, reaching US$5,968 million. A notable decrease occurred in 2024, with the provision falling to US$4,829 million, and continued to decline significantly in 2025 to US$1,890 million. This represents a substantial reduction over the two-year period from 2023 to 2025.
- Cash Operating Taxes
- Cash operating taxes demonstrated a similar upward trend initially, rising from US$4,823 million in 2021 to US$6,851 million in 2022, a 42.3% increase. The value continued to increase in 2023, reaching US$6,936 million. A decrease was then observed in 2024, with cash operating taxes falling to US$5,994 million. The decline continued into 2025, with cash operating taxes reported at US$4,531 million. While decreasing, the rate of decline appears less pronounced than that of the provision for income taxes.
- Relationship between Provision and Cash Taxes
- In 2021 and 2022, cash operating taxes were consistently higher than the provision for income taxes. This difference narrowed in 2023, and reversed in 2024 and 2025, with the provision for income taxes exceeding cash operating taxes. The divergence in 2025 is particularly significant, suggesting a substantial difference between reported tax expense and actual cash outflows for tax purposes. This could be attributable to changes in deferred tax assets or liabilities, tax credits, or other non-cash tax effects.
The observed trends suggest a potential shift in the company’s tax profile. The significant decline in both measures from 2023 to 2025 warrants further investigation to understand the underlying drivers and potential implications for future financial performance.
Invested Capital
UnitedHealth Group Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of unearned revenues.
5 Addition of equity equivalents to shareholders’ equity attributable to UnitedHealth Group.
6 Removal of accumulated other comprehensive income.
The invested capital of the organization demonstrates a consistent upward trend over the analyzed period, though the rate of increase fluctuates. Total reported debt & leases and shareholders’ equity attributable to UnitedHealth Group both contribute to this overall growth. A detailed examination of each component reveals specific patterns.
- Total Reported Debt & Leases
- Total reported debt & leases exhibits a steady increase from US$50,276 million in 2021 to US$83,004 million in 2025. The growth is not linear; a more substantial increase is observed between 2022 and 2023 (US$15,000 million) and again between 2023 and 2024 (US$14,358 million). The increase from 2024 to 2025 is comparatively modest, at US$207 million.
- Shareholders’ Equity
- Shareholders’ equity attributable to UnitedHealth Group also shows an increasing trend, rising from US$71,760 million in 2021 to US$94,110 million in 2025. The rate of growth is relatively consistent throughout the period, with increases ranging from approximately US$5,000 million to US$7,000 million annually. The largest increase occurs between 2022 and 2023 (US$10,984 million).
- Invested Capital
- Invested capital, calculated as the sum of total reported debt & leases and shareholders’ equity, increases from US$139,922 million in 2021 to US$197,568 million in 2025. The growth rate mirrors the combined trends of its components, with larger increases observed in 2023 and 2024. Notably, the increase in invested capital slows considerably between 2024 and 2025, rising by only US$754 million, suggesting a potential stabilization in capital deployment.
The consistent growth in both debt and equity suggests ongoing investment and financing activities. The slight deceleration in the growth of invested capital in the most recent year warrants further investigation to determine if this represents a strategic shift or a temporary fluctuation.
Cost of Capital
UnitedHealth Group Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Commercial paper, long-term debt and other financing obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, long-term debt and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Commercial paper, long-term debt and other financing obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, long-term debt and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Commercial paper, long-term debt and other financing obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, long-term debt and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Commercial paper, long-term debt and other financing obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, long-term debt and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Commercial paper, long-term debt and other financing obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, long-term debt and other financing obligations. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
UnitedHealth Group Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial performance from 2021 to 2025 is characterized by an initial period of growth and value creation followed by a sharp contraction and a transition into value destruction. While the first three years show a positive correlation between expanding invested capital and increasing economic profit, the final two years indicate a significant deterioration in the company's ability to generate returns above its cost of capital.
- Invested Capital Trends
- Invested capital grew consistently from 2021 to 2024, rising from 139,922 million USD to a peak of 198,557 million USD. This represents a steady expansion of the capital base over four years. In 2025, a slight reduction is observed, with invested capital decreasing to 197,568 million USD, suggesting a plateau or a minor contraction in the capital employed.
- Economic Profit Trajectory
- Economic profit experienced a strong upward trend between 2021 and 2023, climbing from 5,738 million USD to a peak of 9,526 million USD. However, a severe decline occurred in 2024, where profit plummeted to 610 million USD. This downward momentum continued into 2025, resulting in a negative economic profit of -1,626 million USD, signifying that the company no longer generated returns sufficient to cover its cost of capital.
- Economic Spread Ratio Analysis
- The economic spread ratio, which measures the excess return over the cost of capital, mirrored the trend of economic profit. It improved from 4.10% in 2021 to a high of 5.21% in 2023. A drastic compression is noted in 2024, with the ratio falling to 0.31%, nearly reaching a break-even point. By 2025, the ratio turned negative at -0.82%, confirming a shift from value creation to value destruction.
The overall data suggests that the efficiency of capital utilization peaked in 2023. The subsequent collapse in the economic spread ratio and the transition to negative economic profit indicate a significant misalignment between the scale of invested capital and the resulting economic gains in the final two years of the analyzed period.
Economic Profit Margin
UnitedHealth Group Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenues, customers | ||||||
| Add: Increase (decrease) in unearned revenues | ||||||
| Adjusted revenues, customers | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues, customers
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 exhibits a stark divergence between revenue growth and economic value creation. While the organization maintained a consistent upward trend in adjusted revenues, economic profit experienced a period of initial expansion followed by a severe contraction, ultimately entering negative territory.
- Economic Profit Trends
- Economic profit grew steadily between 2021 and 2023, peaking at 9,526 million US dollars. However, a significant reversal occurred in 2024, where profit fell sharply to 610 million US dollars, before declining further to a negative value of 1,626 million US dollars by December 31, 2025.
- Adjusted Revenue Growth
- Adjusted revenues demonstrated uninterrupted growth throughout the analyzed period, increasing from 285,002 million US dollars in 2021 to 443,743 million US dollars in 2025. This indicates a sustained expansion of the top-line customer-based revenue stream.
- Economic Profit Margin Analysis
- The economic profit margin improved incrementally from 2.01% in 2021 to a peak of 2.59% in 2023. This positive trend inverted sharply in 2024, dropping to 0.15%, and turned negative in 2025 at -0.37%. The data reveals that despite the continued increase in revenues, the returns generated were insufficient to cover the cost of capital in the final two years, resulting in economic value destruction.