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.
Economic Profit
UnitedHealth Group Inc., economic profit 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 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
= 15,617 – 8.89% × 197,568 = -1,951
The financial performance regarding economic value creation exhibits a distinct reversal between the 2021–2023 period and the 2024–2025 period. While the organization initially experienced a growth phase in economic profit, this trend transitioned into a significant contraction, culminating in negative economic profit by the end of 2025.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT followed a strong upward trajectory from 2021 to 2023, increasing from 18,910 million to a peak of 26,672 million. However, a sharp reversal occurred in 2024, with profit falling to 18,940 million, and continuing its descent to 15,617 million in 2025. This indicates a substantial reduction in operating profitability during the final two years of the period.
- Invested Capital and Cost of Capital
- Invested capital grew consistently from 139,922 million in 2021 to a peak of 198,557 million in 2024, before a marginal decrease to 197,568 million in 2025. During this period of capital expansion, the cost of capital remained relatively stable, fluctuating slightly around 9.6% before declining to 8.89% by 2025. The growth in the capital base continued even as operating profits began to diminish.
- Economic Profit Trajectory
- Economic profit rose steadily from 5,474 million in 2021 to 9,186 million in 2023, signifying a period of robust value creation. A critical inflection point is observed in 2024, where economic profit collapsed to 252 million. By 2025, this figure shifted to a negative 1,951 million, indicating that the returns generated from operating activities were insufficient to cover the cost of the invested capital, resulting in economic value destruction.
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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
= 4,615 × 5.00% = 231
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 4,233 × 21.00% = 889
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$12,056 million in 2025. This represents a decrease of approximately 46.3% from the 2023 high. The decline in net earnings mirrors the trend observed in NOPAT, suggesting a correlation between operational profitability and overall earnings.
- Relationship between NOPAT and Net Earnings
- While both metrics generally move in the same direction, NOPAT consistently exceeds net earnings throughout the period. This difference could be attributed to factors such as non-operating income or expenses, or differences in accounting treatment. The magnitude of the difference between NOPAT and net earnings remains relatively stable across the observed years.
The observed declines in both NOPAT and net earnings in 2024 and 2025 warrant further investigation to determine the underlying causes and potential implications for future performance.
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Cash Operating Taxes
UnitedHealth Group Inc., cash operating taxes calculation
US$ 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$4,531 million. While decreasing, the rate of decline appears less pronounced than that of the provision for income taxes.
- Relationship between Provision and Cash Taxes
- In 2021 and 2022, cash operating taxes were consistently higher than the provision for income taxes. This difference narrowed in 2023, and reversed in 2024 and 2025, with the provision for income taxes exceeding cash operating taxes. The divergence in 2025 is particularly significant, suggesting a substantial difference between reported tax expense and actual cash outflows for tax purposes. This could be attributable to changes in deferred tax assets or liabilities, tax credits, or other non-cash tax effects.
The observed trends suggest a potential shift in the company’s tax profile. The significant decline in both measures from 2023 to 2025 warrants further investigation to understand the underlying drivers and potential implications for future financial performance.
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Invested Capital
UnitedHealth Group Inc., invested capital calculation (financing approach)
US$ 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$754 million, suggesting a potential stabilization in capital deployment.
The consistent growth in both debt and equity suggests ongoing investment and financing activities. The slight deceleration in the growth of invested capital in the most recent year warrants further investigation to determine if this represents a strategic shift or a temporary fluctuation.
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Cost of Capital
UnitedHealth Group Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 267,701) | 267,701) | ÷ | 346,708) | = | 0.77 | 0.77 | × | 10.46% | = | 8.08% | ||
| Commercial paper, long-term debt and other financing obligations3 | 74,392) | 74,392) | ÷ | 346,708) | = | 0.21 | 0.21 | × | 4.48% × (1 – 21.00%) | = | 0.76% | ||
| Operating lease liability4 | 4,615) | 4,615) | ÷ | 346,708) | = | 0.01 | 0.01 | × | 5.00% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 346,708) | 1.00 | 8.89% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | 428,598) | 428,598) | ÷ | 505,352) | = | 0.85 | 0.85 | × | 10.46% | = | 8.88% | ||
| Commercial paper, long-term debt and other financing obligations3 | 71,865) | 71,865) | ÷ | 505,352) | = | 0.14 | 0.14 | × | 4.46% × (1 – 21.00%) | = | 0.50% | ||
| Operating lease liability4 | 4,889) | 4,889) | ÷ | 505,352) | = | 0.01 | 0.01 | × | 4.70% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 505,352) | 1.00 | 9.41% | ||||||||||
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 | 459,381) | 459,381) | ÷ | 525,218) | = | 0.87 | 0.87 | × | 10.46% | = | 9.15% | ||
| Commercial paper, long-term debt and other financing obligations3 | 60,939) | 60,939) | ÷ | 525,218) | = | 0.12 | 0.12 | × | 4.16% × (1 – 21.00%) | = | 0.38% | ||
| Operating lease liability4 | 4,898) | 4,898) | ÷ | 525,218) | = | 0.01 | 0.01 | × | 4.00% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 525,218) | 1.00 | 9.56% | ||||||||||
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 | 451,806) | 451,806) | ÷ | 511,062) | = | 0.88 | 0.88 | × | 10.46% | = | 9.25% | ||
| Commercial paper, long-term debt and other financing obligations3 | 54,426) | 54,426) | ÷ | 511,062) | = | 0.11 | 0.11 | × | 4.07% × (1 – 21.00%) | = | 0.34% | ||
| Operating lease liability4 | 4,830) | 4,830) | ÷ | 511,062) | = | 0.01 | 0.01 | × | 3.40% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 511,062) | 1.00 | 9.62% | ||||||||||
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 | 449,966) | 449,966) | ÷ | 506,822) | = | 0.89 | 0.89 | × | 10.46% | = | 9.29% | ||
| Commercial paper, long-term debt and other financing obligations3 | 52,583) | 52,583) | ÷ | 506,822) | = | 0.10 | 0.10 | × | 3.57% × (1 – 21.00%) | = | 0.29% | ||
| Operating lease liability4 | 4,273) | 4,273) | ÷ | 506,822) | = | 0.01 | 0.01 | × | 2.90% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 506,822) | 1.00 | 9.60% | ||||||||||
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 | (1,951) | 252) | 9,186) | 6,710) | 5,474) | |
| Invested capital2 | 197,568) | 198,557) | 182,841) | 165,347) | 139,922) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -0.99% | 0.13% | 5.02% | 4.06% | 3.91% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | -2.28% | -4.53% | -4.70% | -2.46% | -1.98% | |
| Elevance Health Inc. | -0.97% | -0.56% | -0.90% | 0.14% | 1.46% | |
| Intuitive Surgical Inc. | 0.81% | 3.39% | -3.06% | -3.34% | 12.27% | |
| Medtronic PLC | -4.76% | -6.55% | -6.34% | -5.09% | -6.73% | |
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 × -1,951 ÷ 197,568 = -0.99%
4 Click competitor name to see calculations.
The financial trajectory regarding economic value creation exhibits a distinct period of expansion followed by a sharp contraction, culminating in a transition from value creation to value destruction.
- Economic Spread Ratio
- A positive trend is observed from 2021 to 2023, with the ratio increasing from 3.91% to a peak of 5.02%. This indicates a widening gap between the return on invested capital and the cost of capital. However, a precipitous decline occurred thereafter, with the ratio falling to 0.13% in 2024 and reaching a negative value of -0.99% by 2025, suggesting that the company's operational returns fell below its required cost of capital.
- Economic Profit
- Economic profit grew steadily in the initial three years, rising from 5,474 million USD in 2021 to 9,186 million USD in 2023. This growth was followed by a severe collapse in 2024, where profit dropped to 252 million USD. By 2025, the figure transitioned into a negative value of 1,951 million USD, confirming the erosion of economic value.
- Invested Capital
- Invested capital showed a consistent upward trend from 2021 to 2024, increasing from 139,922 million USD to 198,557 million USD. A marginal decrease to 197,568 million USD was recorded in 2025. The data indicates that while the capital base expanded significantly over the period, this expansion did not yield proportional increases in economic profit during the final two years of the analysis.
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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 | (1,951) | 252) | 9,186) | 6,710) | 5,474) | |
| Revenues, customers | 443,647) | 395,076) | 367,533) | 322,132) | 285,273) | |
| Add: Increase (decrease) in unearned revenues | 96) | (38) | 280) | 504) | (271) | |
| Adjusted revenues, customers | 443,743) | 395,038) | 367,813) | 322,636) | 285,002) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -0.44% | 0.06% | 2.50% | 2.08% | 1.92% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Abbott Laboratories | -3.21% | -6.48% | -6.99% | -3.45% | -2.85% | |
| Elevance Health Inc. | -0.40% | -0.25% | -0.37% | 0.06% | 0.68% | |
| Intuitive Surgical Inc. | 0.91% | 3.15% | -3.05% | -2.89% | 9.66% | |
| Medtronic PLC | -9.98% | -13.88% | -14.30% | -11.17% | -16.16% | |
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 × -1,951 ÷ 443,743 = -0.44%
3 Click competitor name to see calculations.
A significant divergence is observed between revenue growth and economic value creation over the period from 2021 to 2025. While the organization maintained a consistent upward trajectory in adjusted revenues, the ability to generate economic profit deteriorated sharply after 2023, eventually resulting in a negative economic value position.
- Adjusted Revenues
- A steady growth pattern is evident, with revenues increasing from US$ 285,002 million in 2021 to US$ 443,743 million by 2025. This represents a consistent expansion of the customer-facing revenue base over the five-year period.
- Economic Profit
- The economic profit initially grew, rising from US$ 5,474 million in 2021 to a peak of US$ 9,186 million in 2023. However, a severe contraction occurred in 2024, where profit fell to US$ 252 million, followed by a transition into negative territory in 2025 with a loss of US$ 1,951 million.
- Economic Profit Margin
- The margin mirrored the trend of absolute economic profit, increasing from 1.92% in 2021 to a high of 2.50% in 2023. A rapid decline followed, with the margin collapsing to 0.06% in 2024 and reaching -0.44% by 2025.
The analysis indicates that the growth in adjusted revenues became decoupled from economic value creation after 2023. Despite the continued increase in scale, the decline and subsequent inversion of the economic profit margin suggest that the cost of capital or operational expenses exceeded the returns generated by the expanded revenue base in the final two years of the period.
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