Analysis of Solvency Ratios
Quarterly Data
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 (quarterly data)
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The financial ratios demonstrate various trends over the analyzed periods that reflect the company's evolving financial structure and risk profile.
- Debt to Equity Ratio
- This ratio shows a general increase from 0.66 in March 2020 to a peak around 0.87 in March 2022, indicating a rising level of debt relative to equity. Following this peak, the ratio stabilizes somewhat, fluctuating between 0.71 and 0.84 in subsequent quarters up to September 2024. This suggests a moderate upward shift in leverage over time, albeit with some variability in recent periods.
- Debt to Capital Ratio
- The debt to capital ratio exhibits a modest upward trend overall. Starting at 0.40 in March 2020, it fluctuates but generally increases to around 0.46 by March 2022. After this, it shows slight declines and rises, ending near 0.43 in September 2024. This pattern aligns with the debt to equity ratio, indicating a gradual increase in reliance on debt financing.
- Debt to Assets Ratio
- The debt to assets ratio remains relatively stable through most of the timeline, beginning at 0.23 in March 2020 and briefly increasing to 0.29 in late 2021 and early 2022. Following this, it decreases and stabilizes near 0.26 by September 2024. This suggests that while debt levels in relation to equity and capital have increased, the proportion of debt relative to total assets remains comparatively steady, reflecting balanced asset growth alongside debt changes.
- Financial Leverage
- Financial leverage ratios fluctuate but show a general upward trend from 2.80 in early 2020 to peaks above 3.30 around mid-2023. This increase implies a growing use of debt financing in the company's capital structure, though the ratio decreases slightly towards 2.85 by September 2024, indicating some deleveraging or equity increases in the most recent periods.
- Interest Coverage Ratio
- The interest coverage ratio experiences a consistent and notable decline over the examined periods. Starting from a strong coverage of 15.36 in March 2020 and reaching a peak near 22.25 in September 2020, the ratio declines steadily afterward to 3.98 by September 2024. This significant decrease indicates reduced ability to cover interest expenses from operating earnings, suggesting increased financial risk and possibly higher borrowing costs or declining operating profits.
Overall, the data indicate a trend of increasing leverage with growing debt levels relative to equity and capital, while maintaining a stable debt-to-assets profile. Concurrently, the decline in interest coverage raises concerns about the company's capacity to comfortably service its debt, implying heightened financial risk in the later periods analyzed.
Debt Ratios
Coverage Ratios
Debt to Equity
Humana Inc., debt to equity calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Book overdraft | 356) | 355) | 333) | 353) | 246) | 457) | 406) | 298) | 237) | 391) | 317) | 326) | 240) | 236) | 343) | 320) | 214) | 310) | 169) | ||||||
| Short-term debt | 1,136) | 1,149) | 822) | 1,443) | 2,245) | 2,022) | 1,867) | 2,092) | 2,799) | 1,541) | 1,690) | 1,953) | 795) | 1,109) | 1,204) | 600) | 1,724) | 1,724) | 1,898) | ||||||
| Long-term debt | 11,886) | 11,746) | 12,390) | 10,213) | 9,483) | 9,722) | 9,743) | 9,034) | 7,798) | 11,290) | 11,285) | 10,541) | 11,466) | 6,063) | 6,062) | 6,060) | 6,059) | 6,058) | 6,057) | ||||||
| Total debt | 13,378) | 13,250) | 13,545) | 12,009) | 11,974) | 12,201) | 12,016) | 11,424) | 10,834) | 13,222) | 13,292) | 12,820) | 12,501) | 7,408) | 7,609) | 6,980) | 7,997) | 8,092) | 8,124) | ||||||
| Stockholders’ equity | 17,565) | 16,671) | 16,130) | 16,262) | 16,949) | 16,834) | 16,577) | 15,311) | 16,254) | 15,490) | 15,319) | 16,080) | 16,260) | 14,843) | 14,190) | 13,728) | 15,768) | 14,416) | 12,355) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | 0.76 | 0.79 | 0.84 | 0.74 | 0.71 | 0.72 | 0.72 | 0.75 | 0.67 | 0.85 | 0.87 | 0.80 | 0.77 | 0.50 | 0.54 | 0.51 | 0.51 | 0.56 | 0.66 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | 0.38 | 0.38 | 0.38 | 0.38 | 0.41 | 0.45 | 0.46 | 0.46 | 0.46 | 0.46 | 0.48 | 0.50 | 0.53 | 0.55 | 0.55 | — | — | — | — | ||||||
| Elevance Health Inc. | 0.62 | 0.66 | 0.65 | 0.64 | 0.65 | 0.66 | 0.68 | 0.66 | 0.66 | 0.66 | 0.65 | 0.64 | 0.64 | 0.66 | 0.69 | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
| Medtronic PLC | 0.49 | 0.49 | 0.49 | 0.47 | 0.55 | 0.51 | 0.44 | 0.46 | 0.48 | 0.49 | 0.50 | 0.51 | 0.60 | 0.60 | 0.57 | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 0.83 | 0.84 | 0.85 | 0.70 | 0.75 | 0.80 | 0.87 | 0.74 | 0.65 | 0.71 | 0.65 | 0.64 | 0.67 | 0.70 | 0.70 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 13,378 ÷ 17,565 = 0.76
2 Click competitor name to see calculations.
- Total Debt
-
Total debt showed a general increase over the observed period, with some fluctuations. Initially, from March 2020 to December 2020, total debt declined from approximately $8.1 billion to $7.0 billion. This was followed by an upward trend, especially marked by a significant increase in the third and fourth quarters of 2021, reaching peaks of around $12.5 billion and $12.8 billion respectively. The debt remained relatively elevated throughout 2022, with a notable dip in the third quarter to about $10.8 billion before rising again towards the end of the year and into 2023. In the most recent quarters spanning 2023 to mid-2024, total debt stayed in the range of approximately $11.9 billion to $13.5 billion, indicating sustained leverage at higher levels compared to the early periods. The data suggests an overall strategy leaning toward increased debt financing, with some variability reflecting possible shifts in capital management or market conditions.
- Stockholders' Equity
-
Stockholders' equity exhibited steady growth with periodic fluctuations. Starting at about $12.4 billion in March 2020, equity increased gradually until September 2020, reaching a peak near $15.8 billion. A decrease followed at year-end 2020 to approximately $13.7 billion, from which equity resumed an upward trajectory through most of 2021, peaking at about $16.3 billion in the third quarter before slightly declining by year-end. During 2022, equity values oscillated between roughly $15.3 billion and $16.3 billion, suggesting moderate volatility. In 2023 and into early 2024, equity maintained a generally rising trend, achieving around $17.6 billion by the latest quarter. This upward movement in equity reflects consistent reinvestment and potential retained earnings growth over time, although the fluctuations imply some variances in comprehensive income or equity transactions.
- Debt to Equity Ratio
-
The debt to equity ratio experienced notable changes throughout the period. Initially, it decreased from 0.66 in early 2020 to 0.51 by the third quarter of the same year, indicating a reduction in leverage relative to equity. This lower leverage was maintained through the end of 2020, but in 2021 the ratio increased substantially, peaking at 0.80 by December. During 2022, the ratio declined to a low of 0.67 by September but then increased again to 0.75 by the year's end. In 2023 and the first half of 2024, the ratio exhibited relatively stable values around 0.71 to 0.84, with a slight decreasing trend toward the last observed quarter. Overall, these movements suggest varying leverage levels, with an upward shift starting in mid-2021 that stabilized at moderately higher ratios, reflecting increased reliance on debt relative to equity financing.
Debt to Capital
Humana Inc., debt to capital calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Book overdraft | 356) | 355) | 333) | 353) | 246) | 457) | 406) | 298) | 237) | 391) | 317) | 326) | 240) | 236) | 343) | 320) | 214) | 310) | 169) | ||||||
| Short-term debt | 1,136) | 1,149) | 822) | 1,443) | 2,245) | 2,022) | 1,867) | 2,092) | 2,799) | 1,541) | 1,690) | 1,953) | 795) | 1,109) | 1,204) | 600) | 1,724) | 1,724) | 1,898) | ||||||
| Long-term debt | 11,886) | 11,746) | 12,390) | 10,213) | 9,483) | 9,722) | 9,743) | 9,034) | 7,798) | 11,290) | 11,285) | 10,541) | 11,466) | 6,063) | 6,062) | 6,060) | 6,059) | 6,058) | 6,057) | ||||||
| Total debt | 13,378) | 13,250) | 13,545) | 12,009) | 11,974) | 12,201) | 12,016) | 11,424) | 10,834) | 13,222) | 13,292) | 12,820) | 12,501) | 7,408) | 7,609) | 6,980) | 7,997) | 8,092) | 8,124) | ||||||
| Stockholders’ equity | 17,565) | 16,671) | 16,130) | 16,262) | 16,949) | 16,834) | 16,577) | 15,311) | 16,254) | 15,490) | 15,319) | 16,080) | 16,260) | 14,843) | 14,190) | 13,728) | 15,768) | 14,416) | 12,355) | ||||||
| Total capital | 30,943) | 29,921) | 29,675) | 28,271) | 28,923) | 29,035) | 28,593) | 26,735) | 27,088) | 28,712) | 28,611) | 28,900) | 28,761) | 22,251) | 21,799) | 20,708) | 23,765) | 22,508) | 20,479) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | 0.43 | 0.44 | 0.46 | 0.42 | 0.41 | 0.42 | 0.42 | 0.43 | 0.40 | 0.46 | 0.46 | 0.44 | 0.43 | 0.33 | 0.35 | 0.34 | 0.34 | 0.36 | 0.40 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | 0.27 | 0.27 | 0.27 | 0.28 | 0.29 | 0.31 | 0.31 | 0.31 | 0.32 | 0.31 | 0.33 | 0.34 | 0.35 | 0.35 | 0.35 | — | — | — | — | ||||||
| Elevance Health Inc. | 0.38 | 0.40 | 0.39 | 0.39 | 0.39 | 0.40 | 0.41 | 0.40 | 0.40 | 0.40 | 0.39 | 0.39 | 0.39 | 0.40 | 0.41 | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
| Medtronic PLC | 0.33 | 0.33 | 0.33 | 0.32 | 0.35 | 0.34 | 0.31 | 0.31 | 0.32 | 0.33 | 0.34 | 0.34 | 0.37 | 0.37 | 0.36 | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 0.45 | 0.46 | 0.46 | 0.41 | 0.43 | 0.44 | 0.46 | 0.43 | 0.39 | 0.41 | 0.39 | 0.39 | 0.40 | 0.41 | 0.41 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 13,378 ÷ 30,943 = 0.43
2 Click competitor name to see calculations.
The financial data reflects notable changes in the company's debt and capital structure over the examined periods. Total debt values demonstrate fluctuations, with a general upward trend observed from early 2020 through mid-2021, followed by substantial volatility towards the end of 2021 and through 2024. Specifically, total debt increased markedly from mid-2021 to late 2021, reaching a peak near 13 billion US dollars. Thereafter, total debt figures exhibit some decline in early 2022, followed by a resurgence and relative stabilization around the 12 to 13 billion US dollars range into 2024.
Total capital experienced a fluctuating but overall increasing trend over the same timeframe. Starting near 20.5 billion US dollars in early 2020, total capital rose gradually, experiencing notable increases around the third quarter of 2021. Following that, there were slight decreases and stagnation in early 2022 but the figure gradually ascended again, reaching approximately 31 billion US dollars by the third quarter of 2024.
The debt-to-capital ratio reveals insightful patterns regarding the firm's leverage. Initially, this ratio decreased from 0.40 in the first quarter of 2020 to a low near 0.33 by mid-2021, indicating a reduction in the proportion of debt relative to total capital. However, from late 2021 onwards, the ratio increased sharply to a high around 0.46, corresponding with the earlier noted rise in total debt and flattening or slight decrease in total capital. Since then, the ratio has remained relatively elevated, fluctuating in the upper 0.40s, with minor downward adjustments in some quarters but no return to the earlier low leverage levels.
Overall, the data suggests the company has taken on increased debt relative to its capital base since mid-2021, which might reflect strategic financing decisions or responses to market conditions. The relatively stable total capital alongside variable total debt implies significant debt management activities. The elevated debt-to-capital ratio in recent periods signals higher financial leverage compared to earlier years, which could have implications for risk profile and cost of capital.
- Total Debt Trends
- Initial moderate decreases in 2020, followed by substantial increases peaking around late 2021. Subsequent fluctuations with a stabilization around 12 to 13 billion US dollars into 2024.
- Total Capital Trends
- Gradual increases from about 20.5 billion US dollars in early 2020 to nearly 31 billion by late 2024, with some periods of stagnation and minor declines.
- Debt-to-Capital Ratio Dynamics
- A decreasing trend through mid-2021 down to approximately 0.33, followed by an increase to about 0.46 from late 2021 onwards, indicating higher leverage.
Debt to Assets
Humana Inc., debt to assets calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Book overdraft | 356) | 355) | 333) | 353) | 246) | 457) | 406) | 298) | 237) | 391) | 317) | 326) | 240) | 236) | 343) | 320) | 214) | 310) | 169) | ||||||
| Short-term debt | 1,136) | 1,149) | 822) | 1,443) | 2,245) | 2,022) | 1,867) | 2,092) | 2,799) | 1,541) | 1,690) | 1,953) | 795) | 1,109) | 1,204) | 600) | 1,724) | 1,724) | 1,898) | ||||||
| Long-term debt | 11,886) | 11,746) | 12,390) | 10,213) | 9,483) | 9,722) | 9,743) | 9,034) | 7,798) | 11,290) | 11,285) | 10,541) | 11,466) | 6,063) | 6,062) | 6,060) | 6,059) | 6,058) | 6,057) | ||||||
| Total debt | 13,378) | 13,250) | 13,545) | 12,009) | 11,974) | 12,201) | 12,016) | 11,424) | 10,834) | 13,222) | 13,292) | 12,820) | 12,501) | 7,408) | 7,609) | 6,980) | 7,997) | 8,092) | 8,124) | ||||||
| Total assets | 50,007) | 50,093) | 50,091) | 47,065) | 55,905) | 56,455) | 54,776) | 43,055) | 50,765) | 46,820) | 46,308) | 44,358) | 45,320) | 38,070) | 37,415) | 34,969) | 38,477) | 38,455) | 34,633) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | 0.27 | 0.26 | 0.27 | 0.26 | 0.21 | 0.22 | 0.22 | 0.27 | 0.21 | 0.28 | 0.29 | 0.29 | 0.28 | 0.19 | 0.20 | 0.20 | 0.21 | 0.21 | 0.23 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | 0.20 | 0.20 | 0.20 | 0.20 | 0.22 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 | 0.24 | 0.25 | 0.25 | 0.25 | — | — | — | — | ||||||
| Elevance Health Inc. | 0.23 | 0.25 | 0.24 | 0.23 | 0.22 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 | 0.24 | 0.23 | 0.24 | 0.24 | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
| Medtronic PLC | 0.28 | 0.28 | 0.28 | 0.27 | 0.30 | 0.29 | 0.26 | 0.27 | 0.27 | 0.28 | 0.28 | 0.28 | 0.31 | 0.31 | 0.31 | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 0.26 | 0.26 | 0.26 | 0.23 | 0.22 | 0.23 | 0.25 | 0.23 | 0.20 | 0.22 | 0.21 | 0.22 | 0.22 | 0.23 | 0.23 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 13,378 ÷ 50,007 = 0.27
2 Click competitor name to see calculations.
- Total Debt Trends
- The total debt exhibited fluctuations over the observed periods. Initially, debt levels slightly decreased from $8,124 million to $6,980 million by the end of 2020, indicating a modest deleveraging. However, beginning in early 2021, total debt rose significantly, peaking at $12,820 million in December 2021. Following this peak, the debt decreased somewhat in 2022, reaching a low of $10,834 million in September, before gradually increasing again to $13,378 million by September 2024. This pattern suggests periodic debt restructuring or increased borrowing tied to capital needs or strategic investments.
- Total Assets Trends
- Total assets showed an overall upward trajectory, rising from $34,633 million in March 2020 to reach a peak of $56,455 million in June 2023. There was some volatility with a notable dip to $43,055 million at the end of 2022, possibly reflecting asset sales or valuation adjustments. Despite this dip, assets mostly recovered and stabilized around $50,000 million in the subsequent quarters, maintaining a higher base compared to the early periods. This indicates growth and potential expansion in asset base, though with some episodic declines.
- Debt to Assets Ratio Analysis
- The debt to assets ratio remained relatively stable between 0.20 and 0.23 in early periods, indicating a moderate leverage level. A significant increase occurred in mid to late 2021, rising up to 0.29, coinciding with the peak in total debt. This elevation indicates increased financial leverage during that time frame. Subsequent quarters show fluctuations in the ratio, generally oscillating between 0.21 and 0.27, with no clear long-term decreasing trend. The recent ratio near 0.27 suggests the company maintains a moderately leveraged position relative to assets.
- Overall Insights
- The financial data reflect a company managing its leverage with periods of increased borrowing likely aligned with asset growth or strategic initiatives. The asset base expanded significantly over the analyzed timeframe, despite intermittent declines, pointing towards asset growth or acquisitions. The debt to assets ratio variability suggests active balance sheet management, but leverage remains within moderate boundaries. Continuous monitoring of these trends is advisable to ensure debt levels align with asset base expansion and do not exacerbate financial risk.
Financial Leverage
Humana Inc., financial leverage calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Total assets | 50,007) | 50,093) | 50,091) | 47,065) | 55,905) | 56,455) | 54,776) | 43,055) | 50,765) | 46,820) | 46,308) | 44,358) | 45,320) | 38,070) | 37,415) | 34,969) | 38,477) | 38,455) | 34,633) | ||||||
| Stockholders’ equity | 17,565) | 16,671) | 16,130) | 16,262) | 16,949) | 16,834) | 16,577) | 15,311) | 16,254) | 15,490) | 15,319) | 16,080) | 16,260) | 14,843) | 14,190) | 13,728) | 15,768) | 14,416) | 12,355) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | 2.85 | 3.00 | 3.11 | 2.89 | 3.30 | 3.35 | 3.30 | 2.81 | 3.12 | 3.02 | 3.02 | 2.76 | 2.79 | 2.56 | 2.64 | 2.55 | 2.44 | 2.67 | 2.80 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | 1.87 | 1.86 | 1.87 | 1.90 | 1.92 | 1.97 | 1.99 | 2.03 | 2.04 | 2.03 | 2.09 | 2.10 | 2.14 | 2.17 | 2.17 | — | — | — | — | ||||||
| Elevance Health Inc. | 2.66 | 2.68 | 2.76 | 2.77 | 2.88 | 2.86 | 2.92 | 2.83 | 2.86 | 2.82 | 2.79 | 2.70 | 2.74 | 2.75 | 2.83 | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 1.14 | 1.13 | 1.13 | 1.16 | 1.17 | 1.17 | 1.16 | 1.17 | 1.15 | 1.14 | 1.13 | 1.14 | 1.13 | 1.13 | 1.14 | — | — | — | — | ||||||
| Medtronic PLC | 1.75 | 1.75 | 1.77 | 1.77 | 1.83 | 1.80 | 1.71 | 1.73 | 1.75 | 1.76 | 1.78 | 1.81 | 1.92 | 1.91 | 1.87 | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 3.17 | 3.20 | 3.28 | 3.08 | 3.34 | 3.40 | 3.49 | 3.16 | 3.26 | 3.16 | 3.04 | 2.96 | 3.03 | 3.05 | 3.09 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 50,007 ÷ 17,565 = 2.85
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends related to total assets, stockholders’ equity, and financial leverage ratios over the observed periods.
- Total Assets
- The total assets exhibited fluctuations with an overall upward tendency across the majority of quarters. Initially, assets grew from approximately 34.6 billion to around 38.5 billion in mid-2020, followed by a peak near 45.3 billion in September 2021. A decline occurred toward the end of 2022, then again an increase in early 2023, peaking around 56.5 billion in mid-2023. Subsequently, total assets decreased to slightly above 47 billion by the end of 2023, before stabilizing around the 50 billion mark in the first three quarters of 2024. This indicates periods of asset growth interrupted by intermittent contractions, reflecting dynamic asset management or external market influences.
- Stockholders’ Equity
- Stockholders' equity demonstrated a generally steady upward trajectory over the analyzed periods. Beginning at roughly 12.4 billion in the first quarter of 2020, it increased gradually with some small declines, reaching highs near 17 billion during late 2023. Following a mild reduction at the end of 2023 and early 2024, equity again showed signs of strengthening, closing at approximately 17.6 billion by the third quarter of 2024. This steady growth in equity suggests sustained capital accumulation and retained earnings, contributing positively to the company’s net worth.
- Financial Leverage
- The financial leverage ratio fluctuated between approximately 2.4 and 3.35 throughout the quarters. It began at 2.8 in early 2020, decreased to a low near 2.44 in late 2020, then generally trended upward to a peak of 3.35 by mid-2023. Following this peak, the ratio showed a descending trend to just below 2.9 by the end of 2023, before rising again slightly above 3 in the first half of 2024 and ending near 2.85. These patterns indicate variable reliance on debt relative to equity, with higher leverage periods coinciding with peak asset levels, suggesting possible strategic shifts in financing structure.
Overall, the data suggest a company managing growth with moderate fluctuations in asset base and equity, accompanied by a varying but controlled use of financial leverage. The coexistence of rising equity and fluctuating leverage ratios may reflect measured financing strategies balancing risk and expansion objectives over time.
Interest Coverage
Humana Inc., interest coverage calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income attributable to Humana | 480) | 679) | 741) | (541) | 832) | 959) | 1,239) | (15) | 1,195) | 696) | 930) | (14) | 1,531) | 588) | 828) | (274) | 1,340) | 1,828) | 473) | ||||||
| Add: Net income attributable to noncontrolling interest | —) | (1) | (2) | 1) | (2) | (3) | (1) | (3) | (2) | 1) | —) | 1) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Add: Income tax expense | 155) | 223) | 251) | (75) | 256) | 296) | 359) | (58) | 107) | 427) | 286) | (51) | 120) | 183) | 233) | (178) | 450) | 783) | 252) | ||||||
| Add: Interest expense | 169) | 168) | 159) | 146) | 114) | 120) | 113) | 108) | 102) | 101) | 90) | 91) | 88) | 79) | 68) | 72) | 75) | 76) | 60) | ||||||
| Earnings before interest and tax (EBIT) | 804) | 1,069) | 1,149) | (469) | 1,200) | 1,372) | 1,710) | 32) | 1,402) | 1,225) | 1,306) | 27) | 1,739) | 850) | 1,129) | (380) | 1,865) | 2,687) | 785) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Interest coverage1 | 3.98 | 5.02 | 6.03 | 7.73 | 9.48 | 10.19 | 10.30 | 9.89 | 10.31 | 11.61 | 11.27 | 11.49 | 10.87 | 11.78 | 18.22 | 17.52 | 22.25 | 19.81 | 15.36 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | 12.65 | 11.74 | 11.46 | 11.46 | 10.79 | 11.34 | 13.06 | 15.89 | 18.41 | 20.07 | 18.10 | 16.41 | 16.38 | 14.28 | 12.77 | — | — | — | — | ||||||
| Elevance Health Inc. | 8.52 | 9.07 | 8.70 | 8.49 | 8.87 | 9.76 | 9.95 | 10.13 | 10.75 | 10.71 | 11.01 | 10.93 | 10.04 | 8.03 | 9.09 | — | — | — | — | ||||||
| Medtronic PLC | 8.87 | 8.97 | 9.90 | 9.43 | 10.15 | 11.02 | 10.88 | 10.98 | 10.95 | 10.18 | 5.65 | 5.21 | 3.68 | 4.02 | 6.60 | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 6.39 | 6.79 | 7.53 | 9.97 | 10.21 | 10.99 | 12.25 | 13.59 | 14.66 | 14.45 | 14.26 | 14.44 | 13.46 | 13.03 | 14.88 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Interest coverage
= (EBITQ3 2024
+ EBITQ2 2024
+ EBITQ1 2024
+ EBITQ4 2023)
÷ (Interest expenseQ3 2024
+ Interest expenseQ2 2024
+ Interest expenseQ1 2024
+ Interest expenseQ4 2023)
= (804 + 1,069 + 1,149 + -469)
÷ (169 + 168 + 159 + 146)
= 3.98
2 Click competitor name to see calculations.
The analysis of the earnings before interest and tax (EBIT) reveals fluctuations across the reported periods. Starting from a moderate level in early 2020, EBIT surged significantly in the second quarter of 2020 before experiencing declines and volatility in subsequent quarters. Notably, there were negative EBIT values recorded at the end of 2020 and the end of 2023, indicating periods of operational challenges. Despite these fluctuations, the periods within 2021 and early 2023 demonstrated relatively strong EBIT results, peaking above 1,700 million USD. The latest quarters show a downward trend in EBIT, with a marked decline observed in late 2023 and only partial recovery by the third quarter of 2024.
Interest expense has shown a generally increasing trend over the entire timeline. Starting around 60 million USD in the first quarter of 2020, interest expense steadily rose each quarter, reaching as high as 169 million USD by the third quarter of 2024. This upward trend reflects increasing borrowing costs or higher debt levels over time.
The interest coverage ratio, which indicates the ability to cover interest expenses with EBIT, exhibits a declining trend from early 2020 through 2024. Initially, the company demonstrated strong coverage, with ratios exceeding 15 in the first quarter of 2020 and even higher in subsequent quarters. However, the ratio progressively decreased, falling below 10 from 2022 onwards and approaching a low of approximately 4 in the third quarter of 2024. This reduction suggests diminishing ease in meeting interest obligations from operating earnings and indicates a potential increase in financial risk.
- EBIT Trends
- Highly variable with peaks in mid-2020 and early 2023; negative values at year-end 2020 and 2023.
- Interest Expense Trends
- Consistent increase from 60 million USD in early 2020 to 169 million USD by late 2024.
- Interest Coverage Ratio Trends
- A clear declining trend from over 15 to under 4, signaling reduced operational earnings relative to interest costs.
Overall, the data indicate that while the company has experienced periods of strong operating earnings, the rising interest expenses combined with declining interest coverage ratios suggest heightened financial leverage and reduced earnings cushion to cover interest payments over time. This may warrant attention to debt management and operational efficiency going forward.