Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Humana Inc., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial data reveals several notable trends in the company's leverage and coverage ratios over the five-year period from 2019 to 2023.
- Debt Ratios
- There is a consistent increase in the debt to equity ratio from 0.49 in 2019 to a peak of 0.80 in 2021, followed by a slight decline to 0.74 by 2023. When including operating lease liabilities, the ratio follows a similar pattern but at marginally higher levels, indicating the increasing impact of lease obligations on overall debt.
- The debt to capital ratio increased from 0.33 in 2019 to 0.44 in 2021, stabilizing somewhat around 0.42 to 0.44 from 2022 onwards. Including operating lease liabilities again raised the ratio slightly, confirming that capital structure has incorporated more lease-related liabilities over time.
- The debt to assets ratio also moved upward from 0.20 in 2019 to 0.29 in 2021, then declined modestly to 0.26 by 2023. This suggests an expansion of debt relative to total assets during the middle years, with some efforts towards deleveraging or asset growth in the later years.
- Financial Leverage
- The financial leverage ratio steadily increased year-over-year, from 2.42 in 2019 to 2.89 in 2023. This indicates a growing reliance on debt financing relative to equity over the period.
- Coverage Ratios
- Interest coverage ratios show a declining trend, falling from a robust 15.34 in 2019 to 7.73 in 2023. This reduction implies that the company’s ability to cover interest expenses from earnings has weakened appreciably.
- Similarly, fixed charge coverage ratios declined from 9.76 in 2019 to 6.20 in 2023, reflecting increased pressure on earnings to meet fixed financial obligations overall, including interest and lease payments.
In summary, the company has experienced an increase in leverage across multiple measures, particularly noticeable around 2021, with some stabilization thereafter. However, coverage ratios have diminished steadily, indicating growing risk in meeting fixed financial charges. The inclusion of operating lease liabilities slightly magnifies the level of leverage but does not fundamentally alter the trend. Overall, the financial risk profile has increased over the analyzed period.
Debt Ratios
Coverage Ratios
Debt to Equity
Humana Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Book overdraft | 353) | 298) | 326) | 320) | 225) | |
| Short-term debt | 1,443) | 2,092) | 1,953) | 600) | 699) | |
| Long-term debt | 10,213) | 9,034) | 10,541) | 6,060) | 4,967) | |
| Total debt | 12,009) | 11,424) | 12,820) | 6,980) | 5,891) | |
| Stockholders’ equity | 16,262) | 15,311) | 16,080) | 13,728) | 12,037) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.74 | 0.75 | 0.80 | 0.51 | 0.49 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Abbott Laboratories | 0.38 | 0.46 | 0.50 | 0.57 | — | |
| CVS Health Corp. | 0.81 | 0.74 | 0.75 | 0.93 | — | |
| Elevance Health Inc. | 0.64 | 0.66 | 0.64 | 0.60 | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Medtronic PLC | 0.47 | 0.46 | 0.51 | 0.49 | — | |
| UnitedHealth Group Inc. | 0.70 | 0.74 | 0.64 | 0.66 | — | |
| Debt to Equity, Sector | ||||||
| Health Care Equipment & Services | 0.61 | 0.61 | 0.60 | 0.66 | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.82 | 0.73 | 0.79 | 0.92 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 12,009 ÷ 16,262 = 0.74
2 Click competitor name to see calculations.
- Total Debt
- The total debt of the company exhibited an overall increasing trend from 2019 through 2023. Starting at US$5,891 million in 2019, the debt rose steadily to US$6,980 million in 2020, followed by a significant jump in 2021 to US$12,820 million. Although there was a slight reduction to US$11,424 million in 2022, the debt increased again in 2023 to US$12,009 million, maintaining a high level relative to the earlier years.
- Stockholders’ Equity
- Stockholders’ equity consistently increased over the five-year period. Beginning at US$12,037 million in 2019, equity grew to US$13,728 million in 2020, and continued upward to US$16,080 million in 2021. Despite a minor decline in 2022 to US$15,311 million, equity rebounded in 2023 to reach US$16,262 million, achieving its highest value within the time frame analyzed.
- Debt to Equity Ratio
- The debt to equity ratio rose from 0.49 in 2019 to 0.51 in 2020, indicating a modest increase in leverage relative to equity. This ratio then escalated significantly in 2021 to 0.80, reflecting a substantial increase in debt compared to equity. Following that peak, the ratio declined slightly to 0.75 in 2022 and 0.74 in 2023, signaling a stabilization in leverage but still remaining higher than the levels observed in 2019 and 2020.
- Summary of Trends
- Overall, the company increased its total debt notably in 2021, with a corresponding increase in leverage as shown by the debt to equity ratio. While stockholders’ equity grew over the five-year period, the rapid increase in debt outpaced equity growth during 2021, affecting the debt to equity ratio. The subsequent slight decrease in debt and relative stabilization of leverage from 2022 to 2023 suggest an effort to manage debt levels, although leverage remains significantly higher than the initial years of the period analyzed.
Debt to Equity (including Operating Lease Liability)
Humana Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Book overdraft | 353) | 298) | 326) | 320) | 225) | |
| Short-term debt | 1,443) | 2,092) | 1,953) | 600) | 699) | |
| Long-term debt | 10,213) | 9,034) | 10,541) | 6,060) | 4,967) | |
| Total debt | 12,009) | 11,424) | 12,820) | 6,980) | 5,891) | |
| Operating lease liabilities (included within Trade accounts payable and accrued expenses) | 149) | 152) | 185) | 129) | 116) | |
| Operating lease liabilities (included within Other long-term liabilities) | 444) | 456) | 546) | 355) | 332) | |
| Total debt (including operating lease liability) | 12,602) | 12,032) | 13,551) | 7,464) | 6,339) | |
| Stockholders’ equity | 16,262) | 15,311) | 16,080) | 13,728) | 12,037) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.77 | 0.79 | 0.84 | 0.54 | 0.53 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.41 | 0.49 | 0.54 | 0.61 | — | |
| CVS Health Corp. | 1.04 | 1.00 | 1.01 | 1.23 | — | |
| Elevance Health Inc. | 0.66 | 0.69 | 0.67 | 0.63 | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | 0.01 | — | |
| Medtronic PLC | 0.49 | 0.48 | 0.53 | 0.51 | — | |
| UnitedHealth Group Inc. | 0.76 | 0.80 | 0.70 | 0.73 | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.70 | 0.71 | 0.70 | 0.76 | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.87 | 0.78 | 0.85 | 0.98 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 12,602 ÷ 16,262 = 0.77
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends in the company's capital structure over the five-year period ending December 31, 2023.
- Total Debt (including operating lease liability)
- The total debt increased from $6,339 million at the end of 2019 to $13,551 million by the end of 2021, representing a substantial rise over this two-year span. Following this peak, total debt declined to $12,032 million in 2022 but experienced a slight rise again to $12,602 million in 2023. Overall, debt more than doubled from 2019 to 2023, indicating an increased reliance on borrowed capital within the company’s financial policy during this period.
- Stockholders’ Equity
- Stockholders’ equity showed consistent growth from $12,037 million in 2019 to $16,262 million in 2023. The most significant increase occurred between 2020 and 2021 when equity rose noticeably. Although there was a slight dip from 2021 to 2022, equity regained momentum and reached its highest point in 2023. This steady growth in equity suggests ongoing accumulation of retained earnings or additional equity financing.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio remained relatively stable around 0.53-0.54 in 2019 and 2020. It then increased sharply to 0.84 in 2021, reflecting the surge in total debt relative to equity during that year. In 2022 and 2023, the ratio moderated somewhat to 0.79 and 0.77 respectively, indicating a slight reduction in leverage but still considerably higher levels than the pre-2021 period. This pattern implies a temporary shift towards greater leverage followed by a cautious reduction, though leverage remains elevated compared with earlier years.
In summary, the data depicts a phase of aggressive debt accumulation peaking in 2021, combined with steady equity growth over the entire period. The debt to equity ratio's peak in 2021 and subsequent decline indicate a strategic adjustment in capital structure, balancing the use of debt and equity financing. Despite the recent moderation, leverage remains higher than in 2019 and 2020, which may reflect ongoing strategic financial decisions or evolving market conditions influencing the company’s funding approach.
Debt to Capital
Humana Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Book overdraft | 353) | 298) | 326) | 320) | 225) | |
| Short-term debt | 1,443) | 2,092) | 1,953) | 600) | 699) | |
| Long-term debt | 10,213) | 9,034) | 10,541) | 6,060) | 4,967) | |
| Total debt | 12,009) | 11,424) | 12,820) | 6,980) | 5,891) | |
| Stockholders’ equity | 16,262) | 15,311) | 16,080) | 13,728) | 12,037) | |
| Total capital | 28,271) | 26,735) | 28,900) | 20,708) | 17,928) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.42 | 0.43 | 0.44 | 0.34 | 0.33 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Abbott Laboratories | 0.28 | 0.31 | 0.34 | 0.36 | — | |
| CVS Health Corp. | 0.45 | 0.42 | 0.43 | 0.48 | — | |
| Elevance Health Inc. | 0.39 | 0.40 | 0.39 | 0.38 | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Medtronic PLC | 0.32 | 0.31 | 0.34 | 0.33 | — | |
| UnitedHealth Group Inc. | 0.41 | 0.43 | 0.39 | 0.40 | — | |
| Debt to Capital, Sector | ||||||
| Health Care Equipment & Services | 0.38 | 0.38 | 0.38 | 0.40 | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.45 | 0.42 | 0.44 | 0.48 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 12,009 ÷ 28,271 = 0.42
2 Click competitor name to see calculations.
The financial data reveals the following key trends regarding debt and capital structure over the five-year period:
- Total Debt
- The total debt increased substantially from 5,891 million USD at the end of 2019 to a peak of 12,820 million USD at the end of 2021. Following this peak, there was a slight decrease in 2022 to 11,424 million USD, before experiencing a moderate increase again to 12,009 million USD in 2023. Overall, total debt more than doubled within the timeframe, indicating significant borrowing or financing activities during this period.
- Total Capital
- Total capital showed a steady upward trend throughout the period, increasing from 17,928 million USD in 2019 to 28,271 million USD in 2023. The most notable growth occurred between 2020 and 2021, during which capital soared by approximately 8,192 million USD. Even with a slight dip in 2022, the capital base remained robust and continued to grow in 2023, signaling an expanding asset or equity base.
- Debt to Capital Ratio
- The debt to capital ratio experienced a gradual increase from 0.33 in 2019 to 0.44 in 2021, reflecting a higher proportion of debt within the capital structure during this peak debt period. After 2021, the ratio declined marginally to 0.43 in 2022 and further to 0.42 in 2023, suggesting an improvement in the balance between debt and total capital despite the slight recent increase in debt levels. This ratio movement indicates a cautious reduction in leverage after a phase of elevated borrowing.
In summary, the company's financial leverage increased notably through 2021, accompanied by strong capital growth. Post-2021, the debt level and leverage ratio saw modest reductions or stabilization, indicating possible efforts to manage and optimize the capital structure going forward.
Debt to Capital (including Operating Lease Liability)
Humana Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Book overdraft | 353) | 298) | 326) | 320) | 225) | |
| Short-term debt | 1,443) | 2,092) | 1,953) | 600) | 699) | |
| Long-term debt | 10,213) | 9,034) | 10,541) | 6,060) | 4,967) | |
| Total debt | 12,009) | 11,424) | 12,820) | 6,980) | 5,891) | |
| Operating lease liabilities (included within Trade accounts payable and accrued expenses) | 149) | 152) | 185) | 129) | 116) | |
| Operating lease liabilities (included within Other long-term liabilities) | 444) | 456) | 546) | 355) | 332) | |
| Total debt (including operating lease liability) | 12,602) | 12,032) | 13,551) | 7,464) | 6,339) | |
| Stockholders’ equity | 16,262) | 15,311) | 16,080) | 13,728) | 12,037) | |
| Total capital (including operating lease liability) | 28,864) | 27,343) | 29,631) | 21,192) | 18,376) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.44 | 0.44 | 0.46 | 0.35 | 0.34 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.29 | 0.33 | 0.35 | 0.38 | — | |
| CVS Health Corp. | 0.51 | 0.50 | 0.50 | 0.55 | — | |
| Elevance Health Inc. | 0.40 | 0.41 | 0.40 | 0.39 | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | 0.01 | — | |
| Medtronic PLC | 0.33 | 0.32 | 0.35 | 0.34 | — | |
| UnitedHealth Group Inc. | 0.43 | 0.45 | 0.41 | 0.42 | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.41 | 0.41 | 0.41 | 0.43 | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.47 | 0.44 | 0.46 | 0.50 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 12,602 ÷ 28,864 = 0.44
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several significant trends in the capital structure and leverage of the company.
- Total Debt (including operating lease liability)
- The total debt exhibits an overall increasing trend from 2019 to 2023. Starting at 6,339 million USD in 2019, the total debt increased moderately to 7,464 million USD in 2020. A considerable jump occurred in 2021 when the debt nearly doubled to 13,551 million USD. This was followed by a slight reduction to 12,032 million USD in 2022, and a modest increase again to 12,602 million USD in 2023. Despite the slight fluctuation between 2021 and 2023, the total debt remains substantially higher than in the initial years.
- Total Capital (including operating lease liability)
- The total capital also shows a consistent upward trend. It started at 18,376 million USD in 2019 and increased steadily each year, reaching a peak of 29,631 million USD in 2021. There was a minor decline to 27,343 million USD in 2022, followed by an increase to 28,864 million USD in 2023. This pattern reflects a general expansion of the company's capital base, with the largest growth occurring up to 2021, and relatively stable values thereafter.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio rose from 0.34 in 2019 to 0.35 in 2020, indicating a small increase in leverage. In 2021, the ratio jumped to 0.46, reflecting the significant rise in total debt relative to capital. Subsequently, the ratio showed a slight decrease, stabilizing at 0.44 for both 2022 and 2023. This stability suggests that despite fluctuations in debt and capital levels, the company's leverage has been maintained at a consistent level since 2021.
Overall, the data indicates that the company increased its debt substantially in 2021, which increased leverage as measured by the debt to capital ratio. Since then, the firm has managed its capital structure to keep leverage relatively stable, despite fluctuations in both total debt and capital amounts. The upward trend in total capital suggests ongoing expansion, while the relatively stable leverage ratio indicates disciplined financial management in balancing debt with capital growth.
Debt to Assets
Humana Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Book overdraft | 353) | 298) | 326) | 320) | 225) | |
| Short-term debt | 1,443) | 2,092) | 1,953) | 600) | 699) | |
| Long-term debt | 10,213) | 9,034) | 10,541) | 6,060) | 4,967) | |
| Total debt | 12,009) | 11,424) | 12,820) | 6,980) | 5,891) | |
| Total assets | 47,065) | 43,055) | 44,358) | 34,969) | 29,074) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.26 | 0.27 | 0.29 | 0.20 | 0.20 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Abbott Laboratories | 0.20 | 0.23 | 0.24 | 0.26 | — | |
| CVS Health Corp. | 0.25 | 0.23 | 0.24 | 0.28 | — | |
| Elevance Health Inc. | 0.23 | 0.23 | 0.24 | 0.23 | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Medtronic PLC | 0.27 | 0.27 | 0.28 | 0.27 | — | |
| UnitedHealth Group Inc. | 0.23 | 0.23 | 0.22 | 0.22 | — | |
| Debt to Assets, Sector | ||||||
| Health Care Equipment & Services | 0.23 | 0.23 | 0.23 | 0.25 | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.30 | 0.28 | 0.29 | 0.31 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 12,009 ÷ 47,065 = 0.26
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding the company's debt and asset management over the analyzed periods.
- Total Debt
- The total debt exhibited an upward trend from 2019 to 2021, increasing significantly from $5,891 million to $12,820 million. In 2022, the debt declined to $11,424 million, followed by a moderate increase in 2023 to $12,009 million. Overall, total debt more than doubled over the five-year span, indicating an expansion in borrowing or financial obligations.
- Total Assets
- Total assets showed consistent growth throughout the entire period. The asset base expanded from $29,074 million in 2019 to $47,065 million in 2023. Despite a slight decrease from 2021 to 2022, total assets rebounded in 2023, suggesting ongoing investment or asset acquisition activities that contribute to the company's growth.
- Debt to Assets Ratio
- The debt to assets ratio remained relatively stable around 0.20 in 2019 and 2020, then increased sharply to 0.29 in 2021, reflecting the rapid increase in total debt relative to assets. Following that, the ratio gradually decreased to 0.27 in 2022 and 0.26 in 2023. This trend indicates some improvement in the company's leverage position, suggesting an effort to manage debt levels relative to its asset base more effectively after the peak in 2021.
In summary, the data indicates substantial growth in both debt and assets, with leverage peaking in 2021 followed by a modest deleveraging phase. The company's total asset growth has generally outpaced debt increases after 2021, improving the debt to assets ratio and potentially signaling enhanced financial stability or creditworthiness in the latter years.
Debt to Assets (including Operating Lease Liability)
Humana Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Book overdraft | 353) | 298) | 326) | 320) | 225) | |
| Short-term debt | 1,443) | 2,092) | 1,953) | 600) | 699) | |
| Long-term debt | 10,213) | 9,034) | 10,541) | 6,060) | 4,967) | |
| Total debt | 12,009) | 11,424) | 12,820) | 6,980) | 5,891) | |
| Operating lease liabilities (included within Trade accounts payable and accrued expenses) | 149) | 152) | 185) | 129) | 116) | |
| Operating lease liabilities (included within Other long-term liabilities) | 444) | 456) | 546) | 355) | 332) | |
| Total debt (including operating lease liability) | 12,602) | 12,032) | 13,551) | 7,464) | 6,339) | |
| Total assets | 47,065) | 43,055) | 44,358) | 34,969) | 29,074) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.27 | 0.28 | 0.31 | 0.21 | 0.22 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.22 | 0.24 | 0.26 | 0.27 | — | |
| CVS Health Corp. | 0.32 | 0.31 | 0.33 | 0.37 | — | |
| Elevance Health Inc. | 0.24 | 0.24 | 0.25 | 0.24 | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | 0.01 | — | |
| Medtronic PLC | 0.28 | 0.27 | 0.29 | 0.28 | — | |
| UnitedHealth Group Inc. | 0.25 | 0.25 | 0.24 | 0.24 | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.26 | 0.27 | 0.27 | 0.29 | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.32 | 0.30 | 0.31 | 0.34 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 12,602 ÷ 47,065 = 0.27
2 Click competitor name to see calculations.
The financial data for Humana Inc. reveals important trends in the company's debt levels and asset base over the five-year period from 2019 to 2023.
- Total Debt (including operating lease liability)
- The total debt exhibits a rising trend from 2019 through 2021, increasing substantially from $6,339 million to $13,551 million. In 2022, the debt level decreased somewhat to $12,032 million but then rose again slightly to $12,602 million in 2023. This pattern suggests an aggressive increase in leverage initially, followed by some debt reduction and stabilization.
- Total Assets
- Total assets consistently grew over the entire timeframe, moving from $29,074 million in 2019 to $47,065 million by the end of 2023. The largest single-year increase was from 2020 to 2021, indicating significant expansion in the company’s asset base during that period.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio declined slightly from 0.22 in 2019 to 0.21 in 2020, before rising sharply to 0.31 in 2021. This spike corresponds with the rapid increase in total debt relative to assets. The ratio then decreased moderately to 0.28 in 2022 and further to 0.27 in 2023, reflecting a relative reduction in leverage despite rising absolute debt levels, given the continued growth in total assets.
In summary, the company experienced significant growth in both total debt and total assets over the reported years, with debt rising at a faster pace in the early years, leading to a higher leverage ratio by 2021. Subsequently, the leverage ratio decreased somewhat due to asset growth outpacing debt increases, indicating an improved balance between debt and asset financing by 2023.
Financial Leverage
Humana Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 47,065) | 43,055) | 44,358) | 34,969) | 29,074) | |
| Stockholders’ equity | 16,262) | 15,311) | 16,080) | 13,728) | 12,037) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.89 | 2.81 | 2.76 | 2.55 | 2.42 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Abbott Laboratories | 1.90 | 2.03 | 2.10 | 2.21 | — | |
| CVS Health Corp. | 3.27 | 3.21 | 3.10 | 3.32 | — | |
| Elevance Health Inc. | 2.77 | 2.83 | 2.70 | 2.61 | — | |
| Intuitive Surgical Inc. | 1.16 | 1.17 | 1.14 | 1.15 | — | |
| Medtronic PLC | 1.77 | 1.73 | 1.81 | 1.79 | — | |
| UnitedHealth Group Inc. | 3.08 | 3.16 | 2.96 | 3.01 | — | |
| Financial Leverage, Sector | ||||||
| Health Care Equipment & Services | 2.64 | 2.65 | 2.57 | 2.64 | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.76 | 2.63 | 2.74 | 2.93 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 47,065 ÷ 16,262 = 2.89
2 Click competitor name to see calculations.
- Total Assets
- Over the five-year period from 2019 to 2023, total assets exhibited a consistent upward trend, increasing from approximately 29.1 billion USD in 2019 to 47.1 billion USD in 2023. There was notable growth each year, with the largest absolute increase occurring between 2020 and 2021, reflecting a period of significant asset expansion. The slight decline observed in 2022 was temporary, as the asset base recovered and exceeded prior levels by the end of 2023.
- Stockholders’ Equity
- Stockholders' equity also showed a general upward trajectory, rising from about 12.0 billion USD in 2019 to 16.3 billion USD in 2023. Similar to total assets, equity grew steadily year-over-year but experienced a minor decrease in 2022 before increasing again in 2023. This fluctuation may indicate temporary adjustments in retained earnings or other equity components but overall reflects strengthening shareholder value.
- Financial Leverage
- The financial leverage ratio increased progressively throughout the period, moving from 2.42 in 2019 to 2.89 in 2023. This rising leverage ratio suggests a growing reliance on debt relative to equity in the company’s capital structure. The gradual increase indicates a trend toward higher financial risk, potentially reflecting strategic decisions to finance asset growth or operational expansions through external borrowing.
- Summary
- The data collectively indicate a phase of growth characterized by substantial asset accumulation and moderate strengthening of equity. However, the concurrent rise in financial leverage points to an increasing dependency on debt financing. The temporary dip in both assets and equity in 2022 suggests some volatility in the company’s financial position during that year, though recovery in 2023 reflects resilience. Overall, the company has expanded its asset base substantially while moderately increasing shareholder equity and progressively leveraging its capital structure.
Interest Coverage
Humana Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Humana | 2,489) | 2,806) | 2,933) | 3,367) | 2,707) | |
| Add: Net income attributable to noncontrolling interest | (5) | (4) | 1) | —) | —) | |
| Add: Income tax expense | 836) | 762) | 485) | 1,307) | 763) | |
| Add: Interest expense | 493) | 401) | 326) | 283) | 242) | |
| Earnings before interest and tax (EBIT) | 3,813) | 3,965) | 3,745) | 4,957) | 3,712) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 7.73 | 9.89 | 11.49 | 17.52 | 15.34 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Abbott Laboratories | 11.46 | 15.89 | 16.41 | 10.10 | — | |
| CVS Health Corp. | 5.20 | 3.46 | 5.16 | 4.36 | — | |
| Elevance Health Inc. | 8.49 | 10.13 | 10.93 | 8.96 | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | 9.43 | 10.98 | 5.21 | 4.71 | — | |
| UnitedHealth Group Inc. | 9.97 | 13.59 | 14.44 | 13.47 | — | |
| Interest Coverage, Sector | ||||||
| Health Care Equipment & Services | 8.55 | 9.70 | 9.51 | 7.72 | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 7.23 | 13.14 | 12.73 | 7.63 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,813 ÷ 493 = 7.73
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT showed a significant increase from 2019 to 2020, rising from 3,712 million USD to 4,957 million USD. However, in 2021, there was a notable decline to 3,745 million USD, followed by a moderate recovery in 2022 to 3,965 million USD. In 2023, EBIT slightly decreased again to 3,813 million USD. Overall, EBIT displayed volatility with an initial peak in 2020, then fluctuations with a downward trend after 2020.
- Interest expense
- Interest expense increased continuously throughout the observed periods. Starting at 242 million USD in 2019, the expense grew each year reaching 493 million USD in 2023. The pattern suggests rising borrowing costs or increased debt levels over time.
- Interest coverage ratio
- The interest coverage ratio, which measures the company's ability to meet interest obligations, showed a declining trend over the period. It peaked at 17.52 in 2020, down from 15.34 in 2019, indicating strong coverage initially. However, subsequent years saw a decrease to 11.49 in 2021, then further to 9.89 in 2022, and finally to 7.73 in 2023. Despite remaining above critical risk levels, the declining ratio highlights a weakening capacity to cover interest expenses from EBIT.
Fixed Charge Coverage
Humana Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Humana | 2,489) | 2,806) | 2,933) | 3,367) | 2,707) | |
| Add: Net income attributable to noncontrolling interest | (5) | (4) | 1) | —) | —) | |
| Add: Income tax expense | 836) | 762) | 485) | 1,307) | 763) | |
| Add: Interest expense | 493) | 401) | 326) | 283) | 242) | |
| Earnings before interest and tax (EBIT) | 3,813) | 3,965) | 3,745) | 4,957) | 3,712) | |
| Add: Fixed operating lease costs | 145) | 183) | 159) | 141) | 154) | |
| Earnings before fixed charges and tax | 3,958) | 4,148) | 3,904) | 5,098) | 3,866) | |
| Interest expense | 493) | 401) | 326) | 283) | 242) | |
| Fixed operating lease costs | 145) | 183) | 159) | 141) | 154) | |
| Fixed charges | 638) | 584) | 485) | 424) | 396) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 6.20 | 7.10 | 8.05 | 12.02 | 9.76 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Abbott Laboratories | 7.71 | 10.10 | 10.21 | 6.68 | — | |
| CVS Health Corp. | 3.15 | 2.16 | 3.03 | 2.75 | — | |
| Elevance Health Inc. | 7.51 | 8.82 | 8.48 | 6.10 | — | |
| Intuitive Surgical Inc. | 74.09 | 63.52 | 93.66 | 58.48 | — | |
| Medtronic PLC | 6.90 | 7.79 | 4.31 | 3.98 | — | |
| UnitedHealth Group Inc. | 7.27 | 8.77 | 8.80 | 8.51 | — | |
| Fixed Charge Coverage, Sector | ||||||
| Health Care Equipment & Services | 5.79 | 6.01 | 5.90 | 4.97 | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 5.57 | 9.15 | 8.86 | 5.56 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,958 ÷ 638 = 6.20
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax exhibited a notable increase from 2019 to 2020, rising from 3866 million US dollars to 5098 million US dollars. However, this was followed by a sharp decline in 2021 to 3904 million and a moderate recovery in 2022 to 4148 million. In 2023, the earnings slightly decreased again to 3958 million. This pattern indicates some volatility in operating profitability over the five-year period.
- Fixed charges
- The fixed charges showed a consistent increasing trend throughout the period analyzed. Starting at 396 million US dollars in 2019, fixed charges rose each year, reaching 424 million in 2020, 485 million in 2021, 584 million in 2022, and 638 million in 2023. This steady increase suggests a growing financial obligation related to fixed costs, possibly from debt servicing or lease expenses.
- Fixed charge coverage ratio
- The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings before fixed charges and taxes, declined progressively from 9.76 in 2019 to 6.2 in 2023. The ratio peaked at 12.02 in 2020, mirroring the rise in earnings that year, but subsequently decreased each year to 8.05 in 2021, 7.1 in 2022, and finally 6.2 in 2023. This downward trend signals a diminishing buffer in the company's capacity to cover fixed charges, reflecting increased financial risk over time.