UnitedHealth Group Inc. (NYSE:UNH)

The analysis of the financial liquidity ratios over the five-year period reveals evolving trends in the company's short-term financial health.

Current Ratio

There is a gradual improvement in the current ratio from 0.74 in 2020 to 0.83 in 2024. This indicates a steady enhancement in the company's ability to cover its short-term liabilities with its short-term assets, suggesting a moderately better liquidity position over time.

Quick Ratio

The quick ratio also shows a positive trend, increasing from 0.68 in 2020 to 0.75 in 2024. This improvement, although modest, points to an increased capacity to meet immediate obligations without relying on inventory sales, reflecting a strengthening of liquid assets relative to current liabilities.

Cash Ratio

Contrarily, the cash ratio exhibits a slight decline, decreasing from 0.33 in 2020 to 0.28 in 2024. This reduction suggests a decrease in the most liquid assets—cash and cash equivalents—relative to current liabilities. Despite improvements in broader liquidity ratios, the immediate cash availability has marginally diminished.

Overall, the data indicates an improvement in general liquidity positions as evidenced by rising current and quick ratios. However, the declining cash ratio signals a potential area for monitoring, as it may reflect tighter cash reserves despite improvements in other liquid asset categories.

The financial data over the five-year period presents a noteworthy evolution in the liquidity position as reflected by current assets, current liabilities, and the current ratio.

Current Assets

There is a consistent upward trajectory in current assets, increasing from approximately US$53.7 billion at the end of 2020 to about US$85.8 billion by the end of 2024. This rising trend signals an enhancing capacity to cover short-term obligations.

Current Liabilities

Current liabilities also show a steady increase, growing from around US$72.4 billion in 2020 to roughly US$103.8 billion in 2024. The persistent rise indicates increasing short-term obligations, which might be a reflection of expanding operations or increased creditor financing.

Current Ratio

The current ratio exhibits a gradual improvement, beginning at 0.74 in 2020, fluctuating slightly over the years but trending upward to 0.83 in 2024. Although the ratio remains below 1.0, indicating current liabilities surpass current assets, the upward trend suggests a strengthening liquidity position over time.

Overall, while both current assets and liabilities have increased substantially, the pace of growth in current assets has been relatively stronger in recent years, contributing to a modest but positive improvement in the current ratio. This pattern suggests a cautious but favorable development in short-term financial health.

Analysis of the provided financial data reveals several notable trends in liquidity and short-term financial stability over the five-year period from 2020 through 2024.

Total Quick Assets

The total quick assets exhibit a consistent upward trajectory, increasing from 49,261 million US dollars in 2020 to 77,567 million US dollars by the end of 2024. This growth reflects an approximate 57% increase over the five years, indicating an improving capacity to cover short-term liabilities using liquid assets.

Current Liabilities

Current liabilities also increase steadily, rising from 72,420 million US dollars in 2020 to 103,769 million US dollars in 2024. This increase of approximately 43% suggests a growing short-term debt or obligations that the company is managing alongside asset growth.

Quick Ratio

The quick ratio exhibits a gradual improvement from 0.68 in 2020 to 0.75 in 2024. This ratio, a key indicator of liquidity, reflects the firm’s ability to meet its short-term obligations without relying on inventory sales. Although remaining below the 1.0 benchmark that typically signifies full coverage of current liabilities by quick assets, the ratio's upward trend signals strengthening liquidity position over the period.

Overall, while current liabilities are increasing significantly, the faster growth rate of quick assets and the improving quick ratio suggest enhanced short-term financial health. The data implies effective management of liquid assets relative to rising liabilities, positioning the company towards greater financial resilience in meeting immediate obligations.

The financial data over the five-year period reveals several notable trends in liquidity and short-term obligations.

Total cash assets

The total cash assets show an overall upward trend from 23,857 million US dollars in 2020 to a peak of 33,383 million US dollars in 2023, followed by a decline to 29,113 million US dollars in 2024. This suggests a buildup of cash reserves for most of the period, with some reduction in the final year.

Current liabilities

Current liabilities steadily increased each year, growing from 72,420 million US dollars in 2020 to 103,769 million US dollars in 2024. This consistent growth indicates rising short-term financial obligations or operational expenses requiring settlement within the year.

Cash ratio

The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, was relatively stable from 2020 to 2022, hovering around 0.33 to 0.36. It then slightly decreased to 0.34 in 2023 and further declined to 0.28 in 2024. The decline in the cash ratio in the latest year reflects the combination of decreasing cash assets and increasing current liabilities, depicting a weakening immediate liquidity position.

In summary, while cash assets increased substantially until 2023, the simultaneous and continuous rise in current liabilities outpaced this growth, culminating in a deteriorating cash ratio by 2024. This trend may indicate tightening liquidity and potentially higher reliance on other forms of current asset conversion or financing to meet obligations.