EHC Encompass Health Corp

Overview and Growth

In fiscal 2025, Encompass Health Corp recorded $5.94B of revenue, net income of $566.20M, and an operating cash inflow of $1.18B. The $5.94B revenue base provides substantial context for the company’s earnings, cash generation, and capital requirements. Revenue was 10.5% above fiscal 2024 revenue of $5.37B, marking a year-over-year increase. On a per-share basis, diluted EPS was $5.54, which connects the reported earnings outcome with the company’s diluted share count. Against diluted EPS of $4.46 in fiscal 2024, the current result was 24.2% higher. At period end, total assets were $7.09B, framing the scale of the company’s operating and financing commitments. Asset turnover was 0.84x, relating the company’s annual revenue directly to the total assets reported at the period end.

Profitability

Net income came to $566.20M, completing the progression from revenue through gross and operating profitability to the final reported result. Measured against reported revenue, net income produced a 9.5% margin after operating costs and the remaining recognized items. Pretax income was $953.00M, isolating the reported earnings outcome before the income-tax provision recognized for the fiscal year. Measured against revenue, pretax income equaled 16.1%, adding a pre-tax profitability layer between revenue and net income. The company recognized $192.90M of income tax for the period, completing the transition from pretax income to net income. The income-tax provision equaled 20.2% of pretax income, showing the tax burden absorbed by the year’s earnings. Net income equaled 17.6% of period-end equity, showing the earnings generated on shareholders’ book capital. Return on period-end assets was 8.0%, connecting net income with the company’s total asset base. The company moved from fiscal 2024 net income of $455.70M to $566.20M, with the current outcome ending above that comparison.

Liquidity and Capital Structure

Total assets were $7.09B, supported by $3.81B of liabilities and $3.22B of shareholder equity. At period end, current assets of $905.90M compared with current liabilities of $836.40M, defining the company’s short-term resource position. At 1.08x, the current ratio shows that short-term assets were greater than short-term liabilities at period end. Reported cash and equivalents were $72.20M, separating immediately recognizable cash resources from the rest of the current-asset base. The cash balance equaled 8.6% of current liabilities, showing how much near-term coverage came from cash alone. Book equity represented 45.4% of total assets, quantifying the balance-sheet share supported by shareholder capital. Liabilities represented 53.8% of total assets, quantifying the liability-funded share of the company’s resource base. Measured against total assets, cash and equivalents represented 1.0%, a balance-sheet composition measure rather than a liquidity forecast. The asset base changed 8.5% from $6.53B in fiscal 2024, leaving current total assets higher year over year. Against $2.79B of equity in fiscal 2024, the current book-equity balance moved 15.2% and ended higher. Compared with $85.40M in fiscal 2024, the current cash balance moved 15.5% and finished lower.

Cash Flow and Earnings Quality

The company reported $1.18B of operating cash flow, a cash inflow that shows the cash generated by operations. Operating cash flow equaled 2.08x of net income, showing how strongly accounting earnings converted into cash from operations. Capital spending was $736.40M, absorbing part of the cash generated from operations before free cash flow. Capital spending absorbed 62.6% of operating cash flow, quantifying the share of cash from operations directed to investment. Free cash flow came to $439.20M, leaving a positive amount after capital expenditures. The free-cash-flow margin was 7.4%, measuring cash remaining after capital spending against revenue. The free-cash-flow-to-assets relationship was 6.2%, comparing post-investment cash with the balance-sheet asset base.

Based on the annual report for the fiscal year ending Dec 31, 2025. Analysis generated Oct 21, 2026.