Microsoft Excel LibreOffice Calc

UnitedHealth Group Inc. (UNH)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Ratios (Summary)

UnitedHealth Group Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Turnover Ratios
Receivables turnover 19.75 20.92 22.57 23.98 30.50
Payables turnover 8.67 8.63 8.63 8.38 8.06
Working capital turnover – – – – –
Average No. of Days
Add: Average receivable collection period 18 17 16 15 12
Less: Average payables payment period 42 42 42 44 45

Based on: 10-K (filing date: 2019-02-12), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10).

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. UnitedHealth Group Inc.’s receivables turnover deteriorated from 2016 to 2017 and from 2017 to 2018.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. UnitedHealth Group Inc.’s payables turnover declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital.
Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. UnitedHealth Group Inc.’s average receivable collection period deteriorated from 2016 to 2017 and from 2017 to 2018.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.

Receivables Turnover

UnitedHealth Group Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Revenues 224,871  200,136  184,012  156,397  129,695 
Accounts receivable, net of allowances 11,388  9,568  8,152  6,523  4,252 
Ratio
Receivables turnover1 19.75 20.92 22.57 23.98 30.50
Benchmarks
Receivables Turnover, Competitors
Becton, Dickinson & Co. 6.89 6.93 7.72 6.35 7.12
Intuitive Surgical Inc. 5.46 6.11 6.29 6.05 6.77
Medtronic PLC 5.00 5.31 5.18 3.96 4.46
Stryker Corp. 5.83 5.66 5.76 5.98 6.15
Thermo Fisher Scientific Inc. 5.89 5.39 5.99 6.67 6.83
Receivables Turnover, Sector
Health Care Equipment & Services 11.64 11.85 12.40 12.11 13.51
Receivables Turnover, Industry
Health Care 7.50 7.35 7.66 7.42 7.59

Based on: 10-K (filing date: 2019-02-12), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10).

2018 Calculations

1 Receivables turnover = Revenues ÷ Accounts receivable, net of allowances
= 224,871 ÷ 11,388 = 19.75

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. UnitedHealth Group Inc.’s receivables turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Payables Turnover

UnitedHealth Group Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Cost of revenues 172,401  154,148  141,454  120,081  97,041 
Medical costs payable 19,891  17,871  16,391  14,330  12,040 
Ratio
Payables turnover1 8.67 8.63 8.63 8.38 8.06
Benchmarks
Payables Turnover, Competitors
Becton, Dickinson & Co. 7.89 7.72 9.76 8.85 10.34
Intuitive Surgical Inc. 11.12 11.33 11.89 15.33 11.65
Medtronic PLC 5.56 5.37 5.35 3.92 5.84
Stryker Corp. 7.22 8.77 8.76 8.16 10.00
Thermo Fisher Scientific Inc. 8.36 8.03 10.69 11.20 11.45
Payables Turnover, Sector
Health Care Equipment & Services 8.38 8.32 8.50 8.14 8.26
Payables Turnover, Industry
Health Care 5.97 5.79 5.98 5.80 5.55

Based on: 10-K (filing date: 2019-02-12), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10).

2018 Calculations

1 Payables turnover = Cost of revenues ÷ Medical costs payable
= 172,401 ÷ 19,891 = 8.67

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. UnitedHealth Group Inc.’s payables turnover declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Working Capital Turnover

UnitedHealth Group Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Current assets 38,692  37,084  33,879  31,639  23,556 
Less: Current liabilities 53,209  50,463  49,252  42,898  30,623 
Working capital (14,517) (13,379) (15,373) (11,259) (7,067)
Revenues 224,871  200,136  184,012  156,397  129,695 
Ratio
Working capital turnover1 – – – – –
Benchmarks
Working Capital Turnover, Competitors
Becton, Dickinson & Co. 81.96 0.79 6.35 6.20 2.17
Intuitive Surgical Inc. 1.06 1.49 1.02 1.40 1.58
Medtronic PLC 2.32 2.79 1.75 0.93 1.09
Stryker Corp. 2.76 2.76 2.40 2.24 1.86
Thermo Fisher Scientific Inc. 5.44 8.82 8.48 10.64 14.19
Working Capital Turnover, Sector
Health Care Equipment & Services 27.20 12.92 20.53 10.92 9.09
Working Capital Turnover, Industry
Health Care 5.19 4.01 3.34 3.54 2.84

Based on: 10-K (filing date: 2019-02-12), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10).

2018 Calculations

1 Working capital turnover = Revenues ÷ Working capital
= 224,871 ÷ -14,517 = –

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital.

Average Receivable Collection Period

UnitedHealth Group Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Receivables turnover 19.75 20.92 22.57 23.98 30.50
Ratio (no. of days)
Average receivable collection period1 18 17 16 15 12
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
Becton, Dickinson & Co. 53 53 47 57 51
Intuitive Surgical Inc. 67 60 58 60 54
Medtronic PLC 73 69 70 92 82
Stryker Corp. 63 64 63 61 59
Thermo Fisher Scientific Inc. 62 68 61 55 53
Average Receivable Collection Period, Sector
Health Care Equipment & Services 31 31 29 30 27
Average Receivable Collection Period, Industry
Health Care 49 50 48 49 48

Based on: 10-K (filing date: 2019-02-12), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10).

2018 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 19.75 = 18

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. UnitedHealth Group Inc.’s average receivable collection period deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Payables Payment Period

UnitedHealth Group Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Payables turnover 8.67 8.63 8.63 8.38 8.06
Ratio (no. of days)
Average payables payment period1 42 42 42 44 45
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
Becton, Dickinson & Co. 46 47 37 41 35
Intuitive Surgical Inc. 33 32 31 24 31
Medtronic PLC 66 68 68 93 63
Stryker Corp. 51 42 42 45 36
Thermo Fisher Scientific Inc. 44 45 34 33 32
Average Payables Payment Period, Sector
Health Care Equipment & Services 44 44 43 45 44
Average Payables Payment Period, Industry
Health Care 61 63 61 63 66

Based on: 10-K (filing date: 2019-02-12), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10).

2018 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.67 = 42

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.