Cardinal Health is a healthcare distribution and services company with rising revenue-per-share trends and a conservative balance sheet — five‑year revenue-per-share CAGR of 8.43%, debt-to-equity of 0.1711 and interest coverage of 20.0x.
The company exhibits clear top-line momentum: revenue per share has climbed to $848.92 (period end 2023-06-30) and one‑year revenue-per-share growth accelerated to 13.0% (2023-06-30), while recent quarterly revenue readings reached $60.94B (2026-03-31). Its balance sheet and financing activity have been a relative strength, with net cash used in financing narrowing from -$3.05B (2023-06-30) to -$721.0M (TTM period end 2024-09-30), reflecting smaller financing outflows alongside continued investing spend. Net income has shown multi-year predictability in variability metrics and the most recent quarterly net income moved up to $594.0M (2024-06-30) from $258.0M (2024-03-31).
Material headwinds remain in margin and earnings levels. Trailing twelve‑month net income declined to $852.0M (period end 2024-06-30), below earlier highs near $1.29B (2017-06-30), and diluted EPS most recently is \$3.53 (2024-06-30) versus peak values above \$5 historically. Reported profitability metrics are thin in the available series — gross margin shown at 5.0% (2017-06-30) and a net profit margin observation as low as 0.8% (2017-09-30) — and the trailing P/E has moved higher to 27.7x (2024-06-30). Additionally, operating cash flow (TTM) is not provided in the dataset, which limits direct comparison of earnings and cash generation.
Key fundamental metrics to monitor going forward include trends in top-line and earnings per share growth and how they translate into cash (see EPS Diluted & Revenue per Share) and Revenue & Net Income); the relationship between net income and operating cash flow once OCF is reported (see Earnings Quality Analysis); margin trajectories and any recovery from the low net margin observations (see Profit Margin Trends); capital allocation and the balance between investing outflows (recent TTM investing = -$1.85B) and reduced financing outflows (TTM -$721.0M) (see Strategic Capital Allocation); and the valuation path reflected in the P/E trend (27.7x most recently) (see Price-to-Earnings (PE) Ratio Trend).
The foundation of business quality and long-term value creation
CARDINAL HEALTH INC's revenue shows higher recent quarterly levels compared with earlier single-quarter figures in the dataset: revenue was $54.91B for the quarter ended 2024-03-31 and increased to $60.94B for the quarter ended 2026-03-31, indicating a rising top line in the most recent reporting points. The series also contains several large mid-year totals (for example $205.01B on 2023-06-30, $162.47B on 2021-06-30, and $135.91B on 2022-06-30) that stand noticeably above surrounding quarterly amounts, representing identifiable inflection points in the revenue history provided.
Net income in the most recent quarters available in this dataset moved from $258.0M for the quarter ended 2024-03-31 to $594.0M for the quarter ended 2024-06-30, showing an increase in reported profitability over those two consecutive quarters. Earlier net income highs in the dataset include $985.0M (2017-06-30) and $629.0M (2020-12-31), but the most recent observations show the company reporting mid-to-high single‑hundreds of millions. The most recent quarterly revenue was $60.94B (2026-03-31). The most recent quarterly net income was $594.0M (2024-06-30).
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Jul 2022 to Jun 2023, Cardinal Health Inc generates $205.01B in revenue. The waterfall below shows how revenue flows through various expense categories.
Period Information
Report Type: Annual (10-K)
Period: Jul 2022 to Jun 2023
Analyzing long-term margin stability and competitive positioning
CARDINAL HEALTH INC's net profit margin shows a modest decline in the most recent quarter: it fell from 1.0% for the period ended 2017-06-30 to 0.8% for the period ended 2017-09-30, a decrease of 0.2 percentage points. This movement is the only multi-quarter change visible in the dataset and represents the primary short-term inflection in the available margins.
Gross margin is reported at 5.0% for the period ended 2017-06-30; no later gross margin data are provided here to assess subsequent movement. The most recent gross margin observed was 5.0% (2017-06-30) and the most recent net profit margin observed was 0.8% (2017-09-30).
Understanding Profit Margins
Between Jul 2022 and Jun 2023, Cardinal Health Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
CARDINAL HEALTH INC's trailing twelve‑month net income shows a decline from earlier peaks. The dataset records net income around $1.23B in 2013, rising to $1.29B by 2017-06-30, then falling to $1.10B by 2017-09-30 and most recently to $852.0M as of 2024-06-30. The most recent net income observation is lower than the historical highs reported in the data.
The chart is intended to compare Net Income (TTM) with Operating Cash Flow (TTM), but the supplied dataset contains only Net Income (TTM) entries; no Operating Cash Flow (TTM) values are provided, so the relationship between earnings and operating cash flow cannot be determined from these data. Latest observed values: Net Income (TTM) = $852.0M (period ending 2024-06-30). Operating Cash Flow (TTM) = not provided in the supplied dataset.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
The chart shows a single trailing‑twenty‑four‑month Return on Equity (ROE) observation for CARDINAL HEALTH INC; ROE here is calculated as trailing twelve month net income divided by average total equity. Because only the quarter ended 2013-06-30 is provided, no multi‑quarter trend or inflection point can be identified from this series.
The reported ROE for the period ending 2013-06-30 is 14.9%. The most recent trailing twelve‑month Return on Equity was 14.9%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
CARDINAL HEALTH INC shows a marked shift in financing and investing cash flows over the most recent trailing-twelve-month snapshots. Financing cash outflows narrowed substantially from -$3.05B (period ending 2023-06-30) to -$847.0M (2024-06-30) and further to -$721.0M in the latest 2024-09-30 TTM reading, indicating progressively smaller net cash used in financing activities over that span. Investing cash flows moved in the opposite direction over the available history: investing outflows increased from -$454.0M (2023-06-30) to a larger -$1.85B reported for the 2024-06-30 TTM period.
The dataset does not include a trailing-twelve-month value for operating cash flow, so operating cash generation is not shown here. The most recent observed values are: Net cash flow from financing activities (TTM) = -$721.0M (period end 2024-09-30); Net cash flow from investing activities (TTM) = -$1.85B (period end 2024-06-30).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
CARDINAL HEALTH INC's trailing twelve-month price-to-earnings ratio shows a clear upward trajectory across the reported points. Values moved from the low double-digits in 2013 — 10.3x on 2013-09-30 and 12.9x on 2013-06-30 — to the mid-teens in 2017 — 14.5x on 2017-06-30 and 15.0x on 2017-09-30 — and then rose further to the most recent observation. The most notable inflection is the pronounced increase between the 2017 readings and the latest 2024 figure, representing a material re-rating compared with earlier years.
The most recent quarterly price-to-earnings ratio for CARDINAL HEALTH INC is 27.7x (period ending 2024-06-30). The most recent PE ratio was 27.7x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.