Finance Project: A. What is the annual capital budget and the six-year capital i

Question

Finance Project:

A. What is the annual capital budget and the six-year capital improvement program?
The Board of Regents has directed the administration to annually prepare an all-funds capital
budget and a capital improvements program for the following five fiscal years. The budget and
capital improvement program are intended to facilitate informed investment decisions and to
promote effective management of existing capital assets.
The capital budget is approved by the Board of Regents each June and includes all planned
capital expenditures for the following fiscal year that are anticipated to cost more that $500,000.
The capital improvement program (also known as the six-year plan) brings together academic
priorities, facility condition assessments and institutional financial constraints in order to direct
prioritized and realistic capital planning and fundraising efforts. The capital improvements
program is approved by the Board of Regents each October and includes all major projects.
Major projects are defined as projects costing more than $2 million dollars or having any of the
following characteristics:

Explanation / Answer

UnitedHealth Group Inc. (UNH)

The statement of financial position provides creditors, investors, and analysts with information on company's resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company's assets as well as an indication of cash flows that may come from receivables and inventories.

Assets are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity.

UnitedHealth Group Inc., Consolidated Statement of Financial Position, Assets

(USD $ in millions)

Source: UnitedHealth Group Inc., Annual Reports

Revenues as Reported

UnitedHealth Group Inc., Income Statement, Revenues

USD $ in millions

Source: UnitedHealth Group Inc. Annual Reports

Current Valuation Ratios

UnitedHealth Group Inc., current price multiples

If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.

Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.

Ratios (Summary)

UnitedHealth Group Inc., long-term (investment) activity ratios

UnitedHealth Group Inc.'s equity turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Cash and cash equivalents 7,276 8,406 9,429 9,123 9,800 Short-term investments 1,937 3,031 2,577 2,072 1,239 Accounts receivable, net of allowances 3,052 2,709 2,294 2,061 1,954 Other current receivables, net of allowances 3,998 2,889 2,255 1,643 1,838 Assets under management 2,757 2,773 2,708 2,550 2,383 Deferred income taxes 430 463 472 403 448 Prepaid expenses and other current assets 930 781 615 541 538 Current assets 20,380 21,052 20,350 18,393 18,200 Long-term investments 19,605 17,711 16,166 14,707 13,311 Property, equipment and capitalized software, net of accumulated depreciation and amortization 4,010 3,939 2,515 2,200 2,140 Goodwill 31,604 31,286 23,975 22,745 20,727 Other intangible assets, net of accumulated amortization 3,844 4,682 2,795 2,910 2,381 Other assets 2,439 2,215 2,088 2,108 2,286 Noncurrent assets 61,502 59,833 47,539 44,670 40,845 Total assets 81,882 80,885 67,889 63,063 59,045

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