Humana Inc. (NYSE:HUM)

Current Ratio

The current ratio shows a fluctuating but generally declining trend from early 2019 through 2024. Beginning at 1.65 in March 2019, it increased moderately to peak around 1.83 in September 2019. It then experienced periodic declines and recoveries, falling to a low of approximately 1.35 by September 2022. Following this, there was a gradual recovery with the ratio rising to 1.76 by September 2024. This pattern indicates some volatility in the company's short-term liquidity but overall maintains a level above 1, suggesting the company generally retains the ability to cover current liabilities with current assets.

Quick Ratio

The quick ratio follows a somewhat similar but more pronounced downward trend compared to the current ratio, beginning at 1.32 in March 2019 and reaching a high of 1.51 in September 2019. Subsequently, it declined steadily to a low near 1.13 by September 2022, reflecting a reduction in the company's immediate liquidity excluding inventory. A slight upward trend is observed after this low point, with the ratio increasing to 1.40 by September 2024, indicating modest improvement in liquid asset coverage of short-term liabilities over time.

Cash Ratio

The cash ratio exhibits a pattern reflecting conservative cash management with gradual changes over the analyzed periods. Starting at 1.15 in March 2019, the ratio saw an increase through late 2019, peaking around 1.44 in September 2019. This was followed by a decline, stabilizing near the 1.02–1.10 range from 2021 to mid-2023. Post mid-2023, the ratio shows a slight upward movement, rising to approximately 1.29 by September 2024. This suggests the company maintains a relatively steady level of cash and cash equivalents relative to current liabilities, with some responsiveness to changing liquidity needs or operational conditions.

Overall Insights

Across all liquidity measures, there is a clear cyclical pattern corresponding to seasonal or operational factors, with peak liquidity generally observed in the third quarter of 2019 followed by declines through 2022. The subsequent recovery across all ratios from late 2022 through 2024 indicates improving liquidity and potentially enhanced working capital management. Despite fluctuations, all ratios consistently remain above 1.0, implying a stable short-term financial position capable of meeting current obligations without immediate distress.

Current Assets

The current assets exhibit noticeable fluctuations over the periods analyzed. Starting from approximately 19,673 million US dollars at March 31, 2019, the values increased steadily through mid-2020, peaking slightly above 27,800 million US dollars by June 30, 2020. However, a decline followed toward the end of 2020, dropping to around 23,641 million US dollars by December 31, 2020. In 2021, current assets resumed a gradual upward trend, reaching approximately 26,893 million US dollars by the end of that year. The most significant increase occurred during the first three quarters of 2022, culminating near 33,711 million US dollars by September 30, 2022. This was followed by a sharp decrease at year-end 2022 and early 2023, with values falling back to about 26,183 million US dollars as of December 31, 2022. The first quarter of 2023 saw a strong rebound, peaking again near 37,532 million US dollars on March 31, 2023, and subsequently remained relatively stable with modest fluctuations through mid to late 2024, settling around 32,926 million US dollars by September 30, 2024.

Current Liabilities

Current liabilities also display significant volatility throughout the quarters. They began at 11,927 million US dollars as of March 31, 2019, showing a gradual decline until December 31, 2019, reaching approximately 10,929 million US dollars. This was followed by a sharp escalation coinciding with the first half of 2020, peaking at about 16,455 million US dollars by June 30, 2020. Subsequently, liabilities decreased but remained elevated compared to pre-2020 levels, hovering near the 13,000–15,000 million US dollar range through the end of 2020. The year 2021 saw a consistent rise in current liabilities, reaching just over 17,532 million US dollars by March 31, 2022. A substantial surge occurred in the third quarter of 2022 with current liabilities climbing to approximately 25,051 million US dollars by September 30, 2022. This increase was temporary, as liabilities declined thereafter, but still stayed relatively high, peaking again around 28,279 million US dollars by June 30, 2023. In late 2023 and early 2024, current liabilities receded back to levels in the high teens to low twenties billion US dollars, closing near 18,727 million on September 30, 2024.

Current Ratio

The current ratio fluctuated within a range indicative of a typical short-term liquidity position but displayed a declining trend from 2019 to 2022, followed by recovery into 2024. Initially, the ratio moved between roughly 1.65 and 1.83 during 2019, reflecting a relatively strong liquidity buffer. In 2020, the ratio remained stable, generally between 1.66 and 1.81, though a downward tendency is observable by the year's end. From 2021 to 2022, the current ratio deteriorated, dropping to as low as approximately 1.35 by September 30, 2022, suggesting a compression of liquidity and/or an increase in short-term obligations relative to current assets. After this low point, the ratio improved through the remaining periods analyzed, rebounding to roughly 1.76 by September 30, 2024, indicating an enhancement in the company's short-term liquidity position going forward.

Summary of Trends

Overall, the financial metrics reveal a period of increased volatility, particularly around 2020 and 2022, corresponding to wider economic disruptions. Current assets and liabilities both experienced pronounced swings, with liabilities generally rising sharply relative to assets during certain quarters, exerting downward pressure on the current ratio. The recovery observed in the later quarters indicates efforts to restore liquidity balance. The data suggest cycles of expansion and contraction in short-term financial resources with responsiveness to external and operational factors.

The analysis of the quarterly financial data reveals several key trends in the liquidity position over the observed periods.

Total Quick Assets

The total quick assets exhibited a fluctuating trend, generally increasing from around $15.7 billion in the first quarter of 2019 to a peak above $28 billion in the third quarter of 2022. Notably, there was a significant spike in quick assets during the first three quarters of 2023, reaching a high of nearly $33 billion in the second quarter of 2023, before declining toward the end of 2023 and early 2024 to approximately $26 billion. This pattern suggests a period of asset accumulation followed by some liquidation or reallocation in late 2023 and 2024.

Current Liabilities

Current liabilities also displayed variability, starting at about $11.9 billion in the first quarter of 2019 and rising steadily through 2020 and 2021. A pronounced increase occurred in the third quarter of 2022, with liabilities peaking over $25 billion, paralleling the increase in quick assets. Liabilities continued to stay elevated through 2023, approaching nearly $28 billion in the third quarter of 2023, before decreasing noticeably to around $18.7 billion by the third quarter of 2024. This pattern indicates an increase in short-term obligations that align with asset growth, followed by a reduction toward the most recent periods.

Quick Ratio

The quick ratio, a measure of short-term liquidity, started at relatively strong levels above 1.3 in early 2019 and experienced volatility around this benchmark throughout the timeframe. The ratio remained above 1.0 consistently, indicating the company maintained sufficient liquid assets relative to current liabilities. However, the ratio trended downward from about 1.5 in late 2019 to lows near 1.1-1.2 in 2022, suggesting a compression in liquidity margins as liabilities rose faster than quick assets. The ratio improved again slightly in 2024, reaching around 1.4 by the third quarter, reflecting a restored liquidity buffer due to reductions in liabilities combined with stable quick assets.

In summary, the data depict a cycle of growth in liquid assets and short-term liabilities through 2022 and early 2023, followed by a normalization phase in 2024. Despite fluctuations, the company maintained a quick ratio consistently above 1.0, indicating sound liquidity management throughout the period.

Total cash assets

The total cash assets show a generally increasing trend over the reviewed periods, with some fluctuations. Starting at approximately 13.75 billion US dollars in March 2019, cash assets peaked notably at around 26.68 billion in September 2022. After this peak, a decline to about 18.94 billion in December 2022 is visible, followed by a subsequent rise reaching approximately 31.47 billion in December 2023. In the most recent quarters, cash assets remain relatively stable, showing slight growth towards the end of the period, concluding at approximately 24.15 billion by September 2024.

Current liabilities

Current liabilities display more volatility compared to cash assets. From March 2019 to December 2019, liabilities declined from nearly 11.93 billion to 10.93 billion. However, in early 2020, there was a sharp rise to approximately 14.83 billion, peaking at around 25.05 billion in September 2022. This peak corresponds to the period of highest cash assets recorded. Post the peak, liabilities reduced considerably to approximately 17.18 billion in December 2022, after which the level increased again to about 28.28 billion in December 2023. Subsequently, liabilities have shown a downward pattern, settling near 18.73 billion by September 2024.

Cash ratio

The cash ratio shows a clear pattern of fluctuating stability throughout the periods. Starting higher than 1.15 in early 2019, it peaked at 1.44 in September 2019 before decreasing to just above 1.02 during mid-2022. Subsequently, it maintains a relatively stable trajectory slightly above 1.0 during the later periods, reflecting a conservative liquidity position. By the end of the reviewed period, the cash ratio slightly improved, ending at approximately 1.29 in September 2024. This indicates that cash and cash equivalents have consistently been sufficient to cover current liabilities without significant liquidity stress.

Summary

Overall, the data indicates that the company maintained strong liquidity through the period analyzed, despite fluctuations in both cash assets and current liabilities. Peaks in cash assets and liabilities around late 2022 suggest possible strategic financial maneuvers or seasonal operational changes. The ability to maintain a cash ratio above 1 throughout the periods suggests a careful approach to managing short-term obligations and ensuring available liquid resources. The volatility in liabilities warrants close monitoring, but adequate cash reserves appear to have mitigated related risks effectively.