UnitedHealth Group Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net earnings attributable to UnitedHealth Group common shareholders	14,405)	22,381)	20,120)	17,285)	15,403)
Earnings attributable to noncontrolling interests	837)	763)	519)	447)	366)
Net noncash charges	9,770)	4,281)	3,321)	3,089)	3,510)
Net change in other operating items, net of effects from acquisitions and dispositions	(808)	1,643)	2,246)	1,522)	2,895)
Cash flows from operating activities	24,204)	29,068)	26,206)	22,343)	22,174)
Cash paid for interest, net of tax¹	2,728)	2,413)	1,523)	1,314)	1,295)
Purchases of property, equipment and capitalized software	(3,499)	(3,386)	(2,802)	(2,454)	(2,051)
Free cash flow to the firm (FCFF)	23,433)	28,095)	24,927)	21,203)	21,418)

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).

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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.

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UnitedHealth Group Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Effective Income Tax Rate (EITR)
EITR¹	24.10%	20.50%	21.70%	20.50%	24.00%
Interest Paid, Net of Tax
Cash paid for interest, before tax	3,594)	3,035)	1,945)	1,653)	1,704)
Less: Cash paid for interest, tax²	866)	622)	422)	339)	409)
Cash paid for interest, net of tax	2,728)	2,413)	1,523)	1,314)	1,295)

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 See details »

² 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 3,594 × 24.10% = 866

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.

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UnitedHealth Group Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	363,053)
Free cash flow to the firm (FCFF)	23,433)
Valuation Ratio
EV/FCFF	15.49
Benchmarks
EV/FCFF, Competitors¹
Abbott Laboratories	32.89
Elevance Health Inc.	13.93
Intuitive Surgical Inc.	144.45
Medtronic PLC	25.40
EV/FCFF, Sector
Health Care Equipment & Services	22.62
EV/FCFF, Industry
Health Care	25.45

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.

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	481,999)	494,200)	481,109)	470,898)	338,798)
Free cash flow to the firm (FCFF)²	23,433)	28,095)	24,927)	21,203)	21,418)
Valuation Ratio
EV/FCFF³	20.57	17.59	19.30	22.21	15.82
Benchmarks
EV/FCFF, Competitors⁴
Abbott Laboratories	35.21	36.51	23.24	23.47	36.94
Elevance Health Inc.	15.57	14.19	13.32	12.74	6.04
Intuitive Surgical Inc.	153.43	170.92	85.45	56.01	76.70
Medtronic PLC	20.58	26.54	20.32	33.84	21.43
EV/FCFF, Sector
Health Care Equipment & Services	25.57	22.68	20.44	23.51	18.77
EV/FCFF, Industry
Health Care	24.03	25.94	18.56	17.80	19.47

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 See details »

² See details »

³ 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 481,999 ÷ 23,433 = 20.57

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.

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UnitedHealth Group Inc. (NYSE:UNH)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical