Howard Marks put it nicely when he said that, rather than worrying about share price volatility, ‘The possibility of permanent loss is the risk I worry about… and every practical investor I know worries about.’ It’s only natural to consider a company’s balance sheet when you examine how risky it is, since debt is often involved when a business collapses. Importantly, UnitedHealth Group Incorporated (NYSE:UNH) does carry debt. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Generally speaking, debt only becomes a real problem when a company can’t easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together.

What Is UnitedHealth Group’s Debt?

As you can see below, at the end of March 2025, UnitedHealth Group had US$81.3b of debt, up from US$73.6b a year ago. Click the image for more detail. However, because it has a cash reserve of US$34.3b, its net debt is less, at about US$47.0b.

NYSE:UNH Debt to Equity History July 5th 2025

How Strong Is UnitedHealth Group’s Balance Sheet?

We can see from the most recent balance sheet that UnitedHealth Group had liabilities of US$113.5b falling due within a year, and liabilities of US$91.2b due beyond that. Offsetting these obligations, it had cash of US$34.3b as well as receivables valued at US$53.0b due within 12 months. So it has liabilities totalling US$117.4b more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since UnitedHealth Group has a huge market capitalization of US$279.9b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it’s clear that we should definitely closely examine whether it can manage its debt without dilution.

See our latest analysis for UnitedHealth Group

We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).