Enterprise Value to FCFF (EV/FCFF)
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UnitedHealth Group Inc. pages available for free this week:
- Cash Flow Statement
- Common-Size Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Free Cash Flow to The Firm (FCFF)
UnitedHealth Group Inc., FCFF calculation
US$ in millions
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).
- Cash flows from operating activities
- The cash flows from operating activities show a general upward trend from 2020 to 2023, increasing from 22,174 million USD in 2020 to a peak of 29,068 million USD in 2023. This represents a consistent growth over the four-year period, indicating improving operational efficiency or increased earnings from core business activities. However, in 2024, there is a noticeable decrease to 24,204 million USD, which may suggest a slowdown in operating cash generation or potential challenges impacting cash inflows.
- Free cash flow to the firm (FCFF)
- Free cash flow to the firm follows a similar upward trajectory from 2020 to 2023, rising from 21,418 million USD in 2020 to 28,095 million USD in 2023. This steady increase reflects a positive capability to generate cash after accounting for capital expenditures, signaling robust financial health and potential for sustaining growth or returning value to shareholders. Nevertheless, in 2024, FCFF declines to 23,433 million USD, mirroring the drop seen in operating cash flows. This decline might indicate increased capital spending, reduced operational performance, or other cash outflows affecting free cash generation.
Interest Paid, Net of Tax
UnitedHealth Group Inc., interest paid, net of tax calculation
US$ in millions
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).
2 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited some fluctuations over the analyzed period. Starting at 24% in 2020, it decreased to 20.5% in 2021, followed by a slight increase to 21.7% in 2022. The rate then returned to 20.5% in 2023 before increasing again to 24.1% in 2024. This pattern indicates variability in tax rates impacting the company's net income, with the rate in 2024 reaching a level slightly above that at the beginning of the period.
- Cash Paid for Interest, Net of Tax
- The cash paid for interest, net of tax, showed a consistent upward trend throughout the five-year span. Beginning at $1,295 million in 2020, the amount increased slightly to $1,314 million in 2021. A more significant rise occurred in 2022, with cash interest payments growing to $1,523 million. This upward trajectory accelerated sharply in 2023 and 2024, reaching $2,413 million and $2,728 million, respectively. The increasing interest expense suggests a growing debt burden or higher interest rates, which could impact the company's financial flexibility and cost of capital.
Enterprise Value to FCFF Ratio, Current
UnitedHealth Group Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Abbott Laboratories | |
| CVS Health Corp. | |
| Elevance Health Inc. | |
| Intuitive Surgical Inc. | |
| Medtronic PLC | |
| EV/FCFF, Sector | |
| Health Care Equipment & Services | |
| EV/FCFF, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
UnitedHealth Group Inc., historical EV/FCFF 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) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| EV/FCFF, Sector | ||||||
| Health Care Equipment & Services | ||||||
| EV/FCFF, 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value shows an increasing trend from 2020 through 2023, rising from 338,798 million USD to 494,200 million USD. However, there is a slight decline in 2024 to 481,999 million USD. This indicates sustained growth in the company's valuation over the period, albeit with a minor contraction in the latest year.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm fluctuates across the observed years. It starts at 21,418 million USD in 2020, remains relatively stable in 2021 at 21,203 million USD, then increases notably to 24,927 million USD in 2022 and further to 28,095 million USD in 2023. In 2024, FCFF declines to 23,433 million USD, which suggests a potential reduction in the cash generating ability or increased expenditures impacting free cash flow.
- EV to FCFF Ratio
- The EV/FCFF ratio reflects valuation relative to the company's free cash flow. It rises sharply from 15.82 in 2020 to 22.21 in 2021, indicating a higher valuation relative to cash flow at that time. Subsequently, the ratio decreases to 19.3 in 2022 and continues to decline to 17.59 in 2023, implying improved cash flow performance relative to enterprise value or a temporary decline in valuation. In 2024, the ratio increases again to 20.57, driven likely by the combination of a reduced FCFF and a still high enterprise value, suggesting a more expensive valuation relative to cash flow in the latest year.