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Executive Summary of United healthcare Group is huge organization and is a Fortune 500 corporation

Category: Health Education Paper Type: Report Writing Reference: APA Words: 1900

United healthcare Group is huge organization and is a Fortune 500 corporation.  According to latest statistics the organization serves 115 million customers globally. The organization not only serves in United States but also in other countries as well. The organization over the years has experienced growth, and the revenue of the organization has increased drastically in the last few decades. Charter med incorporated company was found in 1974 while to reorganize this company United Health Care Corporation was formulated in 1977. United Health Care initiated its first pharmacy benefit management in 1988, but in 1994 it was sold for 2.3$ billion. United health group subsidiary known as Evercare accumulate with life mark health plans in 2001. In the month of June in 2019 Davita Medical group is changed to Davita Inc for almost 4.3 $ billion. United Health Care Corporation creates a healthy atmosphere with healthy environment without any discrimination and racism because most of the system of Health Corporation is disturbed due to the presence of racism and discrimination. According to the latest statistics the organization has employed 300,000 employees. The organization over the years has experienced growth, and the revenue of the organization has increased drastically in the last few decades

Introduction of United healthcare Group is huge organization and is a Fortune 500 corporation

Rehab Medical of United healthcare Group is huge organization and is a Fortune 500 corporation

Rehab Medical is working in the targeted market with a focus on patient’s spectrum of care. Medical staff provide quality service for patients with insights on healthcare objectives of Rehab Medical. Rehab medical has partnership and collaboration in the healthcare insurance sector. Consumers are offered competitive and best quality products and services for best customer experiences towards Rehab Medical. Our products include manual wheelchairs, pediatric wheelchair, power wheelchairs, and Scooters. These products are specially offered to children and patients with disabilities to ensure safe indoor and outdoor movements. Rehab Medical has proud partners including Cork Medical, Sunrise Medical, and Quantum Rehab.  

Background of UnitedHealth Group

UnitedHealth Group is among the largest healthcare care organizations in the world. UnitedHealth is an American organization whose headquarter is situated in the city of Minnetonka, Minnesota.  The organization was formed in the year 1977 by Richard T. Burke.  The key products & services of the organization include Uniprise, Specialized Health care, and other health care services. According to the latest statistics the organization has employed 300,000 employees. The organization over the years has experienced growth, and the revenue of the organization has increased drastically in the last few decades. Charter med incorporated company was found in 1974 while to reorganize this company United Health Care Corporation was formulated in 1977. United Health Care initiated its first pharmacy benefit management in 1988, but in 1994 it was sold for 2.3$ billion. United health group subsidiary known as Evercare accumulate with life mark health plans in 2001. In the month of June in 2019 Davita Medical group is changed to Davita Inc for almost 4.3 $ billion. United Health Care Corporation creates a healthy atmosphere with healthy environment without any discrimination and racism because most of the system of Health Corporation is disturbed due to the presence of racism and discrimination.  The organization has four divisions which are mentioned as follows:

UnitedHealth care Medicare & Retirement

UnitedHealth care Global

UnitedHealth care Individual & Employer

UnitedHealth care State & Community

United Healthcare Group is huge organization and is a Fortune 500 corporation.  According to latest statistics the organization serves 115 million customers globally. The organization not only serves in United States but also in other countries as well. The organization over the years have experienced growth, and the revenue of the organization has increased drastically in the last few decades. Over the years the organization has acquired many organizations due to which the organization operations have expanded up to lot of extents. Although the company has experienced growth, but it also faces various risks and issues as well which include competition issues, reputation issues and rapid change in technology. The external environmental risk factors have huge impact on the organization’s performance, efficiency, and profitability. The external environment factors such as political factors, legal factors environmental factors, economic factors, technological factors, and social factors influence the organization to make various decisions.

Issues Which UnitedHealth Group is facing

Narrative on Organization of United healthcare Group is huge organization and is a Fortune 500 corporation

UnitedHealth Group Strategy of United healthcare Group is huge organization and is a Fortune 500 corporation

Core Business Activities

Financial Performance of United healthcare Group is huge organization and is a Fortune 500 corporation

The financial performance of the UnitedHealth organization is measured by using the accounting ratios. The financial statements are analyzed critically to know the financial performance in the current & previous years (SAUNDERS, 2011).

Profitability of United healthcare Group is huge organization and is a Fortune 500 corporation

Key Ratios -> Profitability

Margins % of Sales

2009-12

2010-12

2011-12

2012-12

2013-12

2014-12

2015-12

2016-12

2017-12

2018-12

TTM

Revenue

100

100

100

100

100

100

100

100

100

100

100

COGS

91.57

75.85

75.8

75.27

75.67

74.82

76.78

76.87

77.02

76.67

77.11

Gross Margin

8.43

24.15

24.2

24.73

24.33

25.18

23.22

23.13

22.98

23.33

22.89

SG&A

15.25

15.37

R&D

Other

92.7

76.99

76.91

92.2

92.71

92.68

93.41

93.42

92.91

92.9

92.76

Operating Margin

7.3

7.76

7.72

7.8

7.29

7.32

6.59

6.58

7.09

7.1

7.24

Net Int Inc & Other

-0.63

0.14

0.15

0.04

0.03

0.12

-0.05

-0.13

-0.08

-0.01

0.07

EBT Margin

6.67

7.89

7.86

7.84

7.32

7.45

6.54

6.45

7.01

7.09

7.31

Profitability

2009-12

2010-12

2011-12

2012-12

2013-12

2014-12

2015-12

2016-12

2017-12

2018-12

TTM

Tax Rate %

34.19

37.23

35.39

35.91

36.37

41.81

42.64

40.38

22.82

22.34

21.78

Net Margin %

4.39

4.95

5.08

5.03

4.62

4.33

3.72

3.81

5.28

5.33

5.55

Asset Turnover (Average)

1.52

1.53

1.55

1.48

1.5

1.54

1.58

1.57

1.53

1.54

1.46

Return on Assets %

6.66

7.59

7.85

7.43

6.91

6.68

5.88

5.99

8.06

8.23

8.07

Financial Leverage (Average)

2.5

2.44

2.4

2.59

2.55

2.66

3.29

3.21

2.91

2.94

3.15

Return on Equity %

17.22

18.75

19

18.58

17.76

17.4

17.54

19.46

24.54

24.1

25.62

Return on Invested Capital %

12.23

13.35

13.39

13.14

12.53

12.18

10.86

11.16

15.23

15.59

15.8

Interest Coverage

11.54

16.35

16.76

14.64

13.59

16.62

13.95

12.12

12.82

12.39

12.08


Source: (Morning Star, 2019).

The profitability ratios provide brief information regarding how much income the organization is generating by utilizing its assets. The profitability ratios of UnitedHealth Group are indicating that the organization is generating profit, but there is significant need to improve the profitability of the organization. The corporation should take steps to improve the profitability of the organization. In the year 2014 the ROA of the organization was 6.68%, which increased in the following years and became 8.23% in the year 2018. It can be said the profitability of the organization is showing increasing trend (Brigham & Houston, 2012).

Liquidity of United healthcare Group is huge organization and is a Fortune 500 corporation

Liquidity/Financial Health

2009-12

2010-12

2011-12

2012-12

2013-12

2014-12

2015-12

2016-12

2017-12

2018-12

Latest Qtr

Current Ratio

0.82

0.78

0.85

0.78

0.73

0.77

0.74

0.69

0.73

0.73

0.67

Quick Ratio

0.67

0.63

0.69

0.63

0.58

0.62

0.61

0.59

0.62

0.61

0.57

Financial Leverage

2.5

2.44

2.4

2.59

2.55

2.66

3.29

3.21

2.91

2.94

3.15

Debt/Equity

0.38

0.43

0.46

0.45

0.46

0.49

0.75

0.67

0.6

0.67

0.65


Source: (Morning Star, 2019).

The liquidity ratios of the corporation indicate whether the corporation has enough cash to pay its short-term loans or not. The UnitedHealth group liquidity ratios are indicating that the corporation does not have enough cash to pay its short-term loans. The low liquidity ratios should be a matter of concern for the organization because the organization can face difficulty in the payment of short-term loans with lower liquidity.

Efficiency Ratio of United healthcare Group is huge organization and is a Fortune 500 corporation

Key Ratios -> Efficiency Ratios

Efficiency

2009-12

2010-12

2011-12

2012-12

2013-12

2014-12

2015-12

2016-12

2017-12

2018-12

TTM

Days Sales Outstanding

8.13

7.83

7.85

8.31

8.63

10.28

12.57

14.55

16.16

17.01

16.07

Days Inventory

Payables Period

55.6

63.95

45.24

61.28

73.34

75.83

72.36

72.35

74.35

73.73

75.71

Cash Conversion Cycle

Receivables Turnover

44.88

46.6

46.47

43.95

42.26

35.51

29.03

25.08

22.59

21.46

22.71

Inventory Turnover

Fixed Assets Turnover

55.73

59.47

42.93

34.07

30.63

30.78

33.71

34.2

31

29.07

28.23

Asset Turnover

1.52

1.53

1.55

1.48

1.5

1.54

1.58

1.57

1.53

1.54

1.46


Source: (Morning Star, 2019).

The efficiency ratios of the corporation show that the organization is utilizing its assets efficiently for generating sales. However there is still room for improvement. The organization can further improve its efficiency for generating higher amount of sales. When the sales of the organization are going tom increase, than profitability of the organization will also increase as a result (SAUNDERS, 2011).

Financial Leverage of United healthcare Group is huge organization and is a Fortune 500 corporation

Key Ratios -> Financial Health

Balance Sheet Items (in %)

2009-12

2010-12

2011-12

2012-12

2013-12

2014-12

2015-12

2016-12

2017-12

2018-12

Latest Qtr

Cash & Short-Term Investments

18.7

17.75

17.68

14.14

11.25

10.69

11.59

10.81

11.14

9.41

10.33

Accounts Receivable

6.42

5.87

6.7

6.92

8.61

11.29

11.96

12.74

11.38

11.99

10.87

Inventory

Other Current Assets

5.71

5.54

5.59

4.97

5.03

5.29

4.85

4.03

4.15

4.02

3.94

Total Current Assets

30.82

29.17

29.98

26.03

24.89

27.27

28.41

27.59

26.67

25.42

25.14

Net PP&E

1.6

3.49

3.7

4.87

4.9

5.11

4.36

4.8

5.04

5.56

5.19

Intangibles

41.16

40.68

39.43

44.47

43.29

42.38

47.44

45.7

45.34

44.83

43.06

Other Long-Term Assets

26.42

26.66

26.89

24.63

26.92

25.24

19.79

21.91

22.95

24.2

26.6

Total Assets

100

100

100

100

100

100

100

100

100

100

100

Accounts Payable

26.5

24.91

24.53

22.24

23.24

24.64

23.61

24.21

24.12

24.46

23.13

Short-Term Debt

3.67

3.93

1.45

3.35

2.4

1.62

5.95

5.85

2.09

1.32

4.74

Taxes Payable

Accrued Liabilities

Other Short-Term Liabilities

7.37

8.74

9.26

7.93

8.4

9.19

8.92

10.01

10.62

9.79

10.03

Total Current Liabilities

37.54

37.58

35.24

33.52

34.05

35.45

38.48

40.07

36.83

35.57

37.9

Long-Term Debt

15.26

17.48

19.3

17.36

18.19

18.53

22.84

20.97

21.05

23.12

20.96

Other Long-Term Liabilities

7.23

3.99

3.79

10.57

8.5

8.45

8.34

7.81

7.25

6.76

8.84

Total Liabilities

60.02

59.05

58.33

61.45

60.74

62.43

69.66

68.86

65.13

65.44

67.71

Total Stockholders' Equity

39.98

40.95

41.67

38.55

39.26

37.57

30.34

31.14

34.87

34.56

32.29

Total Liabilities & Equity

100

100

100

100

100

100

100

100

100

100

100


Source: (Morning Star, 2019)

The financial leverage of the organization indicates how much debt the organization has taken for financing its assets. Over the years, the debt of UnitedHealth Corporation has increased which should be a matter of concern because higher amount of debt is not suitable for the company. A high debt amount increases the cost of capital and paying the debt amount back becomes difficult.

References of United healthcare Group is huge organization and is a Fortune 500 corporation

Brigham, E. F., & Houston, J. F. (2012). Fundamentals of Financial Management. Cengage Learning, 8 серп.

Morning Star. (2019). UnitedHealth Group Inc. Retrieved from http://financials.morningstar.com/ratios/r.html?t=UNH&region=usa&culture=en-US

SAUNDERS. (2011). Financial Institutions management. Tata McGraw-Hill Education.

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