Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
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UnitedHealth Group Inc. pages available for free this week:
- Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Return on Invested Capital (ROIC)
UnitedHealth Group Inc., ROIC 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) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, 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 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The period under review demonstrates a fluctuating pattern in Return on Invested Capital (ROIC). Initially, the metric exhibited growth, followed by a significant decline in later years.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT increased from US$18,910 million in 2021 to US$26,672 million in 2023, indicating improving operational profitability. However, a substantial decrease is observed in 2024, falling to US$18,940 million, and continuing to decline to US$15,617 million in 2025.
- Invested Capital
- Invested capital consistently increased from US$139,922 million in 2021 to US$198,557 million in 2024. The rate of increase slowed in 2025, with invested capital remaining relatively stable at US$197,568 million.
- Return on Invested Capital (ROIC)
- ROIC increased from 13.51% in 2021 to 14.59% in 2023, suggesting improved efficiency in capital utilization. A marked decline is then apparent, with ROIC decreasing to 9.54% in 2024 and further to 7.90% in 2025. This decrease coincides with the reduction in NOPAT, despite continued growth in invested capital, indicating diminishing returns on capital employed.
The observed trend suggests that while the company initially enhanced its ability to generate profit from invested capital, recent performance indicates a weakening of this efficiency. The decline in ROIC in the final two years warrants further investigation to determine the underlying causes, such as increased competition, rising costs, or inefficient capital allocation.
Decomposition of ROIC
UnitedHealth Group Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
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 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period under review demonstrates fluctuating performance in key profitability and efficiency metrics. Return on Invested Capital (ROIC) initially increased before experiencing a significant decline. This analysis decomposes the ROIC into its constituent components – Operating Profit Margin (OPM), Turnover of Capital (TO), and the impact of taxes – to understand the drivers of these changes.
- Operating Profit Margin (OPM)
- The Operating Profit Margin exhibited an initial increase from 8.33% in 2021 to 9.13% in 2022, followed by a slight increase to 9.14% in 2023. However, a substantial decrease is observed in 2024, falling to 6.31%, and continuing downward to 4.54% in 2025. This represents the most significant shift in the analyzed metrics and likely contributes heavily to the overall ROIC trend.
- Turnover of Capital (TO)
- The Turnover of Capital remained relatively stable between 2021 and 2023, fluctuating between 1.95 and 2.04. A slight increase is noted in 2024 to 1.99, followed by a more pronounced increase to 2.25 in 2025. This suggests improving capital efficiency in the later years of the period, although this improvement is not sufficient to offset the decline in operating margin.
- Effective Cash Tax Rate (CTR)
- The (1 – Effective Cash Tax Rate) remained consistently high, ranging from 76.75% to 79.68% throughout the period. A slight decrease is observed in 2024 to 75.96%, followed by a modest recovery to 77.51% in 2025. The relative stability of this metric indicates that changes in the tax rate are not a primary driver of the observed ROIC fluctuations.
- Return on Invested Capital (ROIC)
- The ROIC increased from 13.51% in 2021 to 13.68% in 2022 and peaked at 14.59% in 2023. A significant decline then occurs, with the ROIC falling to 9.54% in 2024 and further decreasing to 7.90% in 2025. This decline directly correlates with the decreasing Operating Profit Margin, despite the improving Turnover of Capital.
In summary, the decline in ROIC is primarily attributable to the substantial reduction in the Operating Profit Margin. While capital efficiency, as measured by the Turnover of Capital, improved in the later years, it was insufficient to counteract the negative impact of the shrinking margin. The Effective Cash Tax Rate remained relatively consistent and did not significantly influence the overall ROIC trend.
Operating Profit Margin (OPM)
UnitedHealth Group Inc., OPM 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) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenues, customers | ||||||
| Add: Increase (decrease) in unearned revenues | ||||||
| Adjusted revenues, customers | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, 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 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues, customers
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited a fluctuating pattern over the five-year period. Initial increases were followed by a significant decline.
- Operating Profit Margin (OPM) - Trend Analysis
- The operating profit margin increased from 8.33% in 2021 to 9.13% in 2022, indicating improved profitability relative to revenue. This positive trend continued modestly into 2023, reaching 9.14%. However, a substantial decrease was observed in 2024, with the OPM falling to 6.31%. This decline accelerated in 2025, with the OPM reaching 4.54%, representing the lowest value within the observed period.
Net operating profit before taxes generally increased from 2021 to 2023, aligning with the initial rise in the operating profit margin. However, the profit decreased significantly in 2024 and 2025, coinciding with the observed decline in the operating profit margin. Adjusted revenues consistently increased throughout the period, but the rate of revenue growth did not offset the decreasing profitability as reflected by the OPM.
- Relationship between NOPBT and OPM
- The correlation between net operating profit before taxes and the operating profit margin suggests that changes in the margin directly impact overall profitability. While revenue growth contributed to increased NOPBT in the earlier years, the declining OPM in 2024 and 2025 significantly curtailed profit growth despite continued revenue expansion.
The substantial decrease in the operating profit margin in the latter years warrants further investigation to determine the underlying causes, such as increased operating expenses, pricing pressures, or shifts in revenue mix.
Turnover of Capital (TO)
UnitedHealth Group Inc., TO 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) | ||||||
| Revenues, customers | ||||||
| Add: Increase (decrease) in unearned revenues | ||||||
| Adjusted revenues, customers | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, 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 Invested capital. See details »
2 2025 Calculation
TO = Adjusted revenues, customers ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The period under review demonstrates fluctuations in the turnover of capital alongside growth in both adjusted revenues and invested capital. Overall, the trend in turnover of capital is relatively stable, with a noticeable increase in the most recent year.
- Adjusted Revenues
- Adjusted revenues exhibit a consistent upward trend throughout the period, increasing from 285,002 million US dollars in 2021 to 443,743 million US dollars in 2025. This represents a substantial overall increase, indicating strong revenue generation capabilities.
- Invested Capital
- Invested capital also generally increases over the period, rising from 139,922 million US dollars in 2021 to 198,557 million US dollars in 2024. A slight decrease is observed in 2025, with invested capital reported at 197,568 million US dollars. This suggests a period of capital expansion followed by a stabilization.
- Turnover of Capital (TO)
- The turnover of capital ratio initially decreased from 2.04 in 2021 to 1.95 in 2022. It then experienced a slight recovery to 2.01 in 2023 and remained relatively stable at 1.99 in 2024. A significant increase is observed in 2025, with the ratio reaching 2.25. This indicates that, after a period of relative stability, the company is generating more revenue per dollar of invested capital in the latest year.
- The initial decline in TO, coupled with increasing invested capital, suggests a period where revenue growth did not keep pace with capital investment. However, the subsequent increase in TO in 2025, alongside continued revenue growth, indicates improved capital efficiency.
The observed trends suggest a dynamic relationship between revenue generation, capital investment, and capital utilization. The recent increase in the turnover of capital ratio is a positive indicator, suggesting improved efficiency in deploying invested capital to generate revenue.
Effective Cash Tax Rate (CTR)
UnitedHealth Group Inc., CTR 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) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, 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 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited fluctuations over the five-year period. Cash operating taxes and net operating profit before taxes both generally increased from 2021 to 2023, before declining in the subsequent two years. This interplay influenced the observed trends in the effective cash tax rate.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate began at 20.32% in 2021, increasing to 23.25% in 2022. A slight decrease to 20.64% was noted in 2023. The rate then rose again to 24.04% in 2024, followed by a decrease to 22.49% in 2025. This indicates a degree of volatility in the rate, without a clear, sustained directional trend.
Cash operating taxes increased from US$4,823 million in 2021 to US$6,851 million in 2022, and further to US$6,936 million in 2023. A decline was then observed, with taxes falling to US$5,994 million in 2024 and US$4,531 million in 2025. This suggests a potential correlation with changes in profitability or tax planning strategies.
Net operating profit before taxes (NOPBT) mirrored the trend of cash operating taxes, increasing from US$23,733 million in 2021 to US$29,466 million in 2022, and peaking at US$33,608 million in 2023. Similar to cash operating taxes, NOPBT decreased to US$24,934 million in 2024 and US$20,148 million in 2025. The decrease in both NOPBT and cash operating taxes from 2023 to 2025 likely contributed to the final decrease in the effective cash tax rate in 2025.
The fluctuations in the effective cash tax rate, alongside the corresponding changes in cash operating taxes and NOPBT, warrant further investigation to understand the underlying drivers. These could include changes in tax legislation, adjustments to tax credits, or shifts in the geographic distribution of profits.