Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Humana Inc., long-term (investment) activity 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).
An analysis of long-term activity ratios reveals a period of volatility centered around 2021, followed by a sustained recovery and improvement in efficiency through 2023. The overall trend indicates a strengthening ability to generate revenue from the organization's asset and equity bases.
- Fixed Asset Utilization
- Net fixed asset turnover experienced a decline from 32.93 in 2019 to a low of 26.97 in 2021. However, a significant recovery followed, with the ratio reaching its five-year peak of 34.75 by December 31, 2023. A mirrored pattern is observed when incorporating operating lease right-of-use assets, which decreased to 22.09 in 2021 before climbing to 29.75 in 2023. This suggests an increase in the productivity of fixed investments in the latter part of the period.
- Total Asset Efficiency
- Total asset turnover remained relatively stable over the five-year span, though it followed the systemic dip observed in 2021. The ratio moved from 2.21 in 2019 to a minimum of 1.87 in 2021, before returning to 2.24 by the end of 2023. This trajectory indicates that the company has successfully returned to its baseline efficiency in utilizing its total asset base to drive revenue.
- Equity Turnover Trends
- Equity turnover demonstrates a generally positive upward trajectory. After a minor contraction to 5.15 in 2021, the ratio accelerated to 6.04 in 2022 and reached 6.48 by the end of 2023. This consistent growth suggests an increasing efficiency in utilizing shareholders' equity to generate sales, reflecting improved capital productivity over the analysis period.
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Net Fixed Asset Turnover
Humana Inc., net fixed asset turnover 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) | ||||||
| External revenues | 105,305) | 92,488) | 82,877) | 76,001) | 64,387) | |
| Property and equipment, net | 3,030) | 3,221) | 3,073) | 2,371) | 1,955) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 34.75 | 28.71 | 26.97 | 32.05 | 32.93 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 3.95 | 4.76 | 4.81 | — | — | |
| Elevance Health Inc. | 39.05 | 36.07 | 34.94 | — | — | |
| Intuitive Surgical Inc. | 2.01 | 2.62 | 3.04 | — | — | |
| Medtronic PLC | 5.61 | 5.85 | 5.77 | — | — | |
| UnitedHealth Group Inc. | 32.10 | 31.81 | 31.81 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 17.57 | 17.82 | 17.31 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.22 | 7.88 | 7.74 | — | — | |
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
Net fixed asset turnover = External revenues ÷ Property and equipment, net
= 105,305 ÷ 3,030 = 34.75
2 Click competitor name to see calculations.
The financial data from 2019 to 2023 indicates a period of consistent revenue expansion and a fluctuating but ultimately improving efficiency in the utilization of fixed assets.
- Revenue Performance
- External revenues demonstrated steady and significant growth throughout the analyzed period. Starting at 64,387 million US dollars in 2019, revenues increased annually, reaching 105,305 million US dollars by December 31, 2023.
- Fixed Asset Investment Trends
- Net property and equipment showed a general upward trend for the first four years, rising from 1,955 million US dollars in 2019 to a peak of 3,221 million US dollars in 2022. A slight reduction was observed in 2023, with the value declining to 3,030 million US dollars.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio exhibited a U-shaped trend. A decline was observed between 2019 and 2021, where the ratio dropped from 32.93 to a period low of 26.97, indicating that investment in fixed assets grew at a faster rate than the resulting revenue. However, a strong recovery followed, with the ratio increasing to 34.75 in 2023. This final value represents the highest efficiency level in the five-year series, suggesting that the organization has optimized its asset base to generate higher volumes of revenue.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Humana Inc., net fixed asset turnover (including operating lease, right-of-use asset) 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) | ||||||
| External revenues | 105,305) | 92,488) | 82,877) | 76,001) | 64,387) | |
| Property and equipment, net | 3,030) | 3,221) | 3,073) | 2,371) | 1,955) | |
| Operating lease right-of-use assets (included within Other long-term assets) | 510) | 515) | 678) | 437) | 410) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 3,540) | 3,736) | 3,751) | 2,808) | 2,365) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 29.75 | 24.76 | 22.09 | 27.07 | 27.22 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Abbott Laboratories | 3.56 | 4.25 | 4.26 | — | — | |
| Elevance Health Inc. | 34.43 | 31.64 | 30.12 | — | — | |
| Intuitive Surgical Inc. | 1.97 | 2.53 | 2.93 | — | — | |
| Medtronic PLC | 4.72 | 5.06 | 4.84 | — | — | |
| UnitedHealth Group Inc. | 22.48 | 21.54 | 21.54 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Health Care Equipment & Services | 14.40 | 14.39 | 13.89 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.36 | 6.90 | 6.75 | — | — | |
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
Net fixed asset turnover (including operating lease, right-of-use asset) = External revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 105,305 ÷ 3,540 = 29.75
2 Click competitor name to see calculations.
External revenues demonstrated a consistent upward trajectory from 2019 through 2023, increasing from 64,387 million US$ to 105,305 million US$. This steady growth in the top line serves as the primary driver for the analyzed activity ratios, indicating a significant expansion in the scale of operations over the five-year period.
- Fixed Asset Investment Trends
- Net property and equipment, inclusive of operating lease right-of-use assets, grew from 2,365 million US$ in 2019 to a peak of 3,751 million US$ in 2021. Following this peak, a gradual contraction was observed, with the value declining to 3,540 million US$ by December 31, 2023.
- Net Fixed Asset Turnover Performance
- The net fixed asset turnover ratio remained relatively stable between 2019 and 2020, recorded at 27.22 and 27.07, respectively. A significant decline was observed in 2021, where the ratio dropped to 22.09, coinciding with the period of maximum fixed asset investment. This suggests that during 2021, the growth in fixed assets temporarily outpaced the growth in external revenues.
- Efficiency Recovery and Optimization
- A positive trend in asset productivity emerged following 2021. The turnover ratio recovered to 24.76 in 2022 and reached a five-year peak of 29.75 in 2023. This trajectory indicates an improvement in the efficiency with which the company utilizes its long-term asset base to generate revenue.
- Correlation Analysis
- The divergence between the declining trend in net fixed assets from 2021 to 2023 and the continuing rise in external revenues contributed to the sharp increase in the turnover ratio. The 2023 figures reflect the most efficient utilization of fixed assets within the analyzed timeframe, suggesting that revenue growth is currently being achieved without requiring proportional increases in physical or leased infrastructure.
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Total Asset Turnover
Humana Inc., total asset turnover 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) | ||||||
| External revenues | 105,305) | 92,488) | 82,877) | 76,001) | 64,387) | |
| Total assets | 47,065) | 43,055) | 44,358) | 34,969) | 29,074) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 2.24 | 2.15 | 1.87 | 2.17 | 2.21 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 0.55 | 0.59 | 0.57 | — | — | |
| Elevance Health Inc. | 1.56 | 1.51 | 1.41 | — | — | |
| Intuitive Surgical Inc. | 0.46 | 0.48 | 0.42 | — | — | |
| Medtronic PLC | 0.34 | 0.35 | 0.32 | — | — | |
| UnitedHealth Group Inc. | 1.34 | 1.31 | 1.34 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 1.10 | 1.06 | 1.02 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.63 | 0.66 | 0.62 | — | — | |
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
Total asset turnover = External revenues ÷ Total assets
= 105,305 ÷ 47,065 = 2.24
2 Click competitor name to see calculations.
The financial performance from 2019 to 2023 is characterized by a consistent and significant increase in external revenues, alongside a general expansion of the total asset base.
- Revenue Growth Trends
- External revenues demonstrated an uninterrupted upward trajectory, rising from 64,387 million USD in 2019 to 105,305 million USD in 2023. This represents a substantial increase in the volume of business activity over the five-year period.
- Asset Base Evolution
- Total assets increased from 29,074 million USD in 2019 to 47,065 million USD in 2023. Although the overall trend was positive, a slight contraction was observed in 2022, where assets decreased from 44,358 million USD to 43,055 million USD.
- Total Asset Turnover Efficiency
- The asset turnover ratio exhibited volatility, beginning at 2.21 in 2019 and reaching a minimum of 1.87 in 2021. This decline suggests a period where the growth of the asset base outpaced the growth of revenues. A subsequent recovery occurred in 2022 and 2023, with the ratio climbing to 2.15 and 2.24, respectively. This recovery indicates an improved efficiency in utilizing assets to generate revenue, ultimately exceeding the initial 2019 efficiency level.
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Equity Turnover
Humana Inc., equity turnover 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) | ||||||
| External revenues | 105,305) | 92,488) | 82,877) | 76,001) | 64,387) | |
| Stockholders’ equity | 16,262) | 15,311) | 16,080) | 13,728) | 12,037) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 6.48 | 6.04 | 5.15 | 5.54 | 5.35 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | 1.04 | 1.19 | 1.20 | — | — | |
| Elevance Health Inc. | 4.33 | 4.29 | 3.80 | — | — | |
| Intuitive Surgical Inc. | 0.54 | 0.56 | 0.48 | — | — | |
| Medtronic PLC | 0.61 | 0.60 | 0.59 | — | — | |
| UnitedHealth Group Inc. | 4.14 | 4.14 | 3.98 | — | — | |
| Equity Turnover, Sector | ||||||
| Health Care Equipment & Services | 2.66 | 2.61 | 2.42 | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.69 | 1.69 | 1.67 | — | — | |
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
Equity turnover = External revenues ÷ Stockholders’ equity
= 105,305 ÷ 16,262 = 6.48
2 Click competitor name to see calculations.
A consistent upward trajectory in revenue generation is observed from 2019 through 2023, characterized by an uninterrupted annual increase. External revenues grew from 64,387 million US$ to 105,305 million US$, representing a substantial expansion of the top line over the five-year period. This growth pattern indicates a strong capacity for scaling operations and increasing market reach.
- Stockholders’ Equity Trends
- The equity base demonstrated general growth, rising from 12,037 million US$ in 2019 to 16,262 million US$ by 2023. A marginal contraction occurred in 2022, where equity decreased to 15,311 million US$ from a previous high of 16,080 million US$ in 2021, before recovering in the final year of the period.
- Equity Turnover Performance
- The equity turnover ratio exhibits a general improving trend, indicating increased efficiency in utilizing shareholders' capital to generate revenue. While a slight decline was noted in 2021, falling to 5.15, the ratio accelerated significantly in the subsequent two years, reaching a peak of 6.48 in 2023.
- Relationship Between Revenue and Capital Base
- The acceleration of the equity turnover ratio in 2022 and 2023 suggests that revenue growth has outpaced the growth of the equity base. The shift from a ratio of 5.35 in 2019 to 6.48 in 2023 reflects a heightened asset productivity, where each dollar of equity supports a progressively larger volume of external revenues.
Overall, the financial data indicates an improving efficiency in capital utilization. The combination of aggressive revenue growth and a relatively stable equity base has resulted in a higher turnover rate, signaling an optimized relationship between the company's funded capital and its operational output.
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