UnitedHealth Group (MEX:UNH) ROC % : 10.09% (As of Sep. 2024)

View and export this data going back to 2012. Start your Free Trial

What is UnitedHealth Group ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. UnitedHealth Group's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 10.09%.

As of today (2024-12-15), UnitedHealth Group's WACC % is 5.96%. UnitedHealth Group's ROC % is 8.70% (calculated using TTM income statement data). UnitedHealth Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.

UnitedHealth Group ROC % Historical Data

The historical data trend for UnitedHealth Group's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

UnitedHealth Group ROC % Chart

UnitedHealth Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

Get a 7-Day Free Trial

9.79

10.06

9.94

10.39

9.56

UnitedHealth Group Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															9.88	9.04	-14,377.42	9.58	10.09

UnitedHealth Group ROC % Calculation

UnitedHealth Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	479845.016 * ( 1 - 20.5% )	/	( (4076652.594	+	3903805.449)	/ 2 )
=	381476.78772	/	3990229.0215
=	9.56 %

where

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4790264.683	-	1106807.417	-	( 544152.856	-	max(0, 1739764.553	-	1346569.225	+	544152.856	))
=	4076652.594

	Invested Capital		(A: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4646191.16	-	1092343.781	-	( 502913.019	-	max(0, 1681367.16	-	1331409.09	+	502913.019	))
=	3903805.449

UnitedHealth Group's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	556447.88 * ( 1 - 17.81% )	/	( (4309895.835	+	4756881.129)	/ 2 )
=	457344.512572	/	4533388.482
=	10.09 %

where

	Invested Capital		(Q: Jun. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	5240575.388	-	1162099.095	-	( 573840.587	-	max(0, 1917565.183	-	1686145.641	+	573840.587	))
=	4309895.835

	Invested Capital		(Q: Sep. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	5893484.007	-	1319860.5	-	( 731179.601	-	max(0, 1999845.321	-	1816587.699	+	731179.601	))
=	4756881.129

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

UnitedHealth Group (MEX:UNH) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, UnitedHealth Group's WACC % is 5.96%. UnitedHealth Group's ROC % is 8.70% (calculated using TTM income statement data). UnitedHealth Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

UnitedHealth Group ROC % Related Terms

Thank you for viewing the detailed overview of UnitedHealth Group's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

UnitedHealth Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Plans » UnitedHealth Group Inc (MEX:UNH) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

UNH:USA UNH:Peru 1UNH:Italy UNH:Germany UNH:Germany UNH:Germany UNH:Germany UNH:Canada UNHH34:Brazil UNH:Austria

Address

9900 Bren Road East, UnitedHealth Group Center, Minnetonka, MN, USA, 55343

Website

https://www.unitedhealthgroup.com

UnitedHealth Group is one of the largest private health insurers, providing medical benefits to about 50 million members globally, including 1 million outside the US as June 2024. As a leader in employer-sponsored, self-directed, and government-backed insurance plans, UnitedHealth has obtained massive scale in managed care. Along with its insurance assets, UnitedHealth's continued investments in its Optum franchises have created a healthcare services colossus that spans everything from medical and pharmaceutical benefits to providing outpatient care and analytics to both affiliated and third-party customers.