UnitedHealth Group Incorporated (UNH)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	19,716,000	22,693,000	21,534,000	22,941,000	30,182,000	30,563,000	30,496,000	29,571,000	28,435,000	27,085,000	25,335,000	24,181,000	23,970,000	21,946,000	20,885,000	24,148,000	22,405,000	23,983,000	24,346,000	19,849,000
Interest expense (ttm)	US$ in thousands	3,906,000	3,733,000	3,493,000	3,336,000	3,246,000	3,092,000	2,774,000	2,413,000	2,092,000	1,847,000	1,753,000	1,696,000	1,660,000	1,630,000	1,603,000	1,623,000	1,663,000	1,699,000	1,753,000	1,741,000
Interest coverage		5.05	6.08	6.16	6.88	9.30	9.88	10.99	12.25	13.59	14.66	14.45	14.26	14.44	13.46	13.03	14.88	13.47	14.12	13.89	11.40

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $19,716,000K ÷ $3,906,000K
= 5.05

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.

Analyzing UnitedHealth Group Incorporated's interest coverage from March 31, 2020, to December 31, 2024, we observe fluctuations in the ratio, ranging from a low of 5.05 to a high of 14.88. The trend generally shows a consistent ability to cover interest payments comfortably.

The ratios remained above 10 for most periods, indicating a strong ability to meet interest obligations. The highest ratios were observed in the range of 13 to 15, which suggests a robust financial position and effective management of debt.

However, there was a decline in the interest coverage ratio in the later periods, dropping below 10 from March 31, 2023, onwards. This downward trend raises caution regarding the company's ability to cover interest expenses in the future. It may indicate increasing financial leverage or lower operating income relative to interest payments during these periods.

In conclusion, although UnitedHealth Group generally maintained healthy interest coverage ratios above 10 over the analyzed period, the recent declining trend from March 31, 2023, to December 31, 2024, warrants further attention to ensure sustainable debt servicing capacity in the future.