Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Profitability Ratios (Summary)
UnitedHealth Group Inc., profitability ratios
Based on: 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), 10-K (reporting date: 2020-12-31).
- Gross Profit Margin
- The gross profit margin shows a declining trend over the five-year period. Beginning at 25.62% in 2020, it decreased to 23.6% in 2021, slightly recovered to 24.09% in 2022, then again declined to 23.64% in 2023, and further dropped to 21.31% in 2024. This indicates increasing cost of goods sold relative to revenue or pressure on pricing power over time.
- Operating Profit Margin
- The operating profit margin remained relatively stable from 2020 through 2023, fluctuating narrowly between 8.4% and 8.83%. However, there was a noticeable decline to 8.17% in 2024. This suggests consistency in operating efficiency until the last year when operating performance weakened.
- Net Profit Margin
- The net profit margin was fairly steady from 2020 to 2023, around 6.0% to 6.25%. In 2024, it decreased significantly to 3.65%, indicating reduced overall profitability, possibly due to increased expenses, interest costs, or tax impacts affecting the bottom line.
- Return on Equity (ROE)
- Return on equity improved from 23.52% in 2020 to a peak of 25.87% in 2022, reflecting strong returns generated on shareholders’ equity. A slight dip occurred in 2023 to 25.22%, but a sharp decline followed in 2024 down to 15.55%. This drop suggests reduced effectiveness in generating profits from equity capital in the most recent year.
- Return on Assets (ROA)
- Return on assets increased gradually from 7.81% in 2020 to 8.19% in 2022 and remained nearly flat at 8.18% in 2023. In 2024, it fell notably to 4.83%, indicating a diminished ability to generate net income from total assets, mirroring the deterioration observed in net profit margin and ROE for the same year.
Return on Sales
Return on Investment
Gross Profit Margin
UnitedHealth Group Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenues, customers | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues, customers
= 100 × ÷ =
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals several key trends over the five-year period ending December 31, 2024.
- Revenue Growth
- There is a consistent upward trend in revenues from customers, increasing from $255,639 million in 2020 to $395,076 million in 2024. This represents a substantial growth, indicating expanding business operations or increased market demand.
- Gross Profit
- Gross profit also exhibits growth, rising from $65,498 million in 2020 to a peak of $86,869 million in 2023, before slightly declining to $84,197 million in 2024. This pattern suggests that while profitability grew in absolute terms, there was a minor contraction in the latest year.
- Gross Profit Margin
- The gross profit margin shows a downward trend, decreasing from 25.62% in 2020 to 21.31% in 2024. This decline in margin percentage indicates that costs of goods sold or operational costs may have increased at a faster rate than revenues, leading to reduced efficiency in generating profit from sales.
Overall, the data suggest that although the company has experienced solid revenue growth and increased gross profit up to 2023, pressure on profit margins has emerged. This might reflect rising costs or pricing pressures that could impact future profitability if the trend continues.
Operating Profit Margin
UnitedHealth Group Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings from operations | ||||||
| Revenues, customers | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| Operating Profit Margin, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Earnings from operations ÷ Revenues, customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Earnings from operations
- The earnings from operations exhibit a consistent upward trend from 2020 through 2023, increasing from $22,405 million in 2020 to $32,358 million in 2023. However, there is a slight decrease in 2024, with earnings falling marginally to $32,287 million. Overall, earnings have grown significantly over the five-year period, indicating improved operational profitability until the slight dip in the final year observed.
- Revenues, customers
- Revenues from customers show a steady and strong increase throughout the entire five-year period, rising from $255,639 million in 2020 to $395,076 million in 2024. This represents a substantial growth in customer-generated revenue, suggesting expanding business scale and customer base year over year.
- Operating profit margin
- The operating profit margin fluctuates within a narrow range over the five years. It starts at 8.76% in 2020, experiences a minor decline to 8.4% in 2021, then rises to a peak of 8.83% in 2022. It remains relatively stable at 8.8% in 2023 before declining noticeably to 8.17% in 2024. This pattern indicates slight variability in operational efficiency or cost management despite increasing earnings and revenues, with a downward pressure on margins in the final year.
Net Profit Margin
UnitedHealth Group Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to UnitedHealth Group common shareholders | ||||||
| Revenues, customers | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| Net Profit Margin, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net earnings attributable to UnitedHealth Group common shareholders ÷ Revenues, customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings Attributable to Common Shareholders
- The net earnings demonstrated a generally increasing trend from 2020 to 2023, rising from 15,403 million USD in 2020 to a peak of 22,381 million USD in 2023. However, in 2024, there was a significant decline to 14,405 million USD, representing a decrease of approximately 35.7% compared to the previous year. This drop marks a notable deviation from the previous upward trajectory.
- Revenues
- Revenues showed consistent growth over the five-year period. Starting at 255,639 million USD in 2020, revenues increased each year, reaching 395,076 million USD in 2024. The growth pattern indicates solid expansion, with an approximate total increase of 54.6% over the five years.
- Net Profit Margin
- The net profit margin remained relatively stable between 6.03% and 6.25% from 2020 through 2022, indicating consistent profitability relative to revenues. In 2023, the margin slightly declined to 6.09%, followed by a sharp decrease to 3.65% in 2024. This decline in margin in 2024 aligns with the significant reduction in net earnings despite continued revenue growth, suggesting increased costs or other factors negatively impacting profitability.
- Summary
- While revenue growth was robust and steady over the entire period, profitability exhibited a diverging pattern with earnings and margins plateauing and then declining sharply in the final year. The significant drop in net earnings and margin in 2024, despite increasing revenues, may indicate emerging operational challenges or cost pressures. This disparity between revenue and profit trends warrants further investigation to understand the underlying causes and potential implications for future financial performance.
Return on Equity (ROE)
UnitedHealth Group Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to UnitedHealth Group common shareholders | ||||||
| Shareholders’ equity attributable to UnitedHealth Group | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| ROE, Sector | ||||||
| Health Care Equipment & Services | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net earnings attributable to UnitedHealth Group common shareholders ÷ Shareholders’ equity attributable to UnitedHealth Group
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period under review. The net earnings attributable to common shareholders of the entity experienced consistent growth from 2020 through 2023, increasing from US$15,403 million to US$22,381 million. This upward trajectory indicates a period of improving profitability. However, in 2024, net earnings saw a significant decline to US$14,405 million, representing a substantial drop compared to the prior year.
Examining shareholders’ equity attributable to the entity reveals a steady increase throughout the entire period, moving from US$65,491 million in 2020 to US$92,658 million in 2024. This growth in equity suggests ongoing capital accumulation and retention of earnings over the years.
Return on equity (ROE) exhibited an overall positive trend from 2020 to 2023, rising from 23.52% to a peak of 25.87% in 2022, before a slight decrease to 25.22% in 2023. This pattern aligns with the growth in net earnings and indicates effective utilization of shareholders’ equity to generate profits during this time. Nonetheless, in 2024, ROE declined markedly to 15.55%, reflecting the substantial drop in net earnings and signaling a reduction in profitability relative to the equity base.
- Net Earnings
- Increased steadily from 2020 to 2023, then declined sharply in 2024.
- Shareholders’ Equity
- Showed consistent growth across all years, with no apparent setbacks.
- Return on Equity (ROE)
- Generally improved until 2023, followed by a significant decline in 2024.
In summary, the period from 2020 to 2023 was characterized by improving profitability and strengthening equity, reflecting effective management and favorable operating conditions. The notable reversal in 2024, with both net earnings and ROE decreasing substantially despite continuing growth in equity, suggests challenges that had a material negative impact on profitability during that year.
Return on Assets (ROA)
UnitedHealth Group Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to UnitedHealth Group common shareholders | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| ROA, Sector | ||||||
| Health Care Equipment & Services | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net earnings attributable to UnitedHealth Group common shareholders ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals several key trends over the five-year period. Net earnings attributable to common shareholders demonstrate a general upward trajectory from 2020 to 2023, increasing from 15,403 million US dollars to 22,381 million US dollars. However, in 2024, there is a notable decline to 14,405 million US dollars, indicating a significant reduction in profitability in that year.
Total assets consistently increase each year, showing a steady growth from 197,289 million US dollars in 2020 to 298,278 million US dollars in 2024. This continuous expansion of asset base suggests ongoing investments and growth initiatives.
Return on Assets (ROA) maintains a relatively stable performance from 2020 to 2023, fluctuating narrowly around 8.15% to 8.19%. In 2024, however, ROA experiences a sharp decline to 4.83%, reflecting reduced efficiency in generating earnings from the company's assets during that period.
- Net Earnings
- Consistent growth from 2020 to 2023 followed by a sharp decline in 2024.
- Total Assets
- Continuous increase throughout the period, indicating ongoing asset growth.
- Return on Assets (ROA)
- Stable at around 8% for four years before a significant drop in 2024, signaling reduced asset profitability.
Overall, the data points to expanding asset size and improving earnings until 2023, but the sharp reduction in both net earnings and ROA in 2024 suggests challenges impacting profitability and asset utilization in that year.