Humana Inc. (NYSE:HUM)

Receivables Turnover

The receivables turnover ratio exhibited fluctuations over the five-year period. It increased from 60.97 in 2019 to a peak of 66.78 in 2020, indicating improved efficiency in collecting receivables during that year. However, it declined sharply to 45.69 in 2021 before partially recovering to 55.25 in 2022 and then slightly decreasing again to 51.75 in 2023. This pattern suggests variability in how quickly the company converts receivables into cash.

Payables Turnover

The payables turnover ratio showed modest variation, starting at 8.97 in 2019 and decreasing to 7.57 in 2020. It then rose to 8.35 in 2021, slightly dipped to 8.17 in 2022, and improved to 8.63 in 2023. Overall, this ratio remained relatively stable, indicating consistent management in paying suppliers.

Working Capital Turnover

The working capital turnover ratio demonstrated an overall upward trend, beginning at 7.19 in 2019 and increasing steadily to 9.47 by 2023. Notably, this ratio saw significant increases in 2021 and 2022, peaking at 10.27 in 2022. This suggests enhanced efficiency in utilizing working capital to generate revenue over the period.

Average Receivable Collection Period

The average receivable collection period decreased from 6 days in 2019 to 5 days in 2020, indicating faster collection. It then increased to 8 days in 2021, before improving slightly to 7 days in both 2022 and 2023. This variation corresponds inversely to the receivables turnover trend, reflecting some inconsistency in collection speed.

Average Payables Payment Period

The average payables payment period increased from 41 days in 2019 to a high of 48 days in 2020, then declined to 44 days in 2021 and stabilized around 45 days in 2022 before reducing again to 42 days in 2023. This indicates some fluctuations in the company's payment timing, with a general trend toward shorter payment periods in the most recent year.

External Revenues

The external revenues showed a consistent upward trend over the five-year period. Starting at 64,387 million US dollars in 2019, revenues increased yearly to reach 105,305 million US dollars by 2023. This reflects significant growth, with the largest annual increment occurring between 2022 and 2023. The steady rise indicates an expanding business or enhanced sales performance over time.

Receivables, Net of Allowances

Receivables also experienced an overall increase between 2019 and 2023. Beginning at 1,056 million US dollars in 2019, the value rose to a peak of 1,814 million in 2021, slightly decreased in 2022, and then increased again to 2,035 million in 2023. This general upward movement suggests an increasing volume of outstanding receivables, which could be associated with growing sales or changing credit policies.

Receivables Turnover Ratio

The receivables turnover ratio showed variability throughout the period. It increased from 60.97 in 2019 to 66.78 in 2020, indicating faster collection of receivables. However, in 2021, there was a notable decline to 45.69, suggesting slower collections or increased outstanding receivables relative to sales. The ratio partially recovered in 2022 and 2023, reaching 55.25 and 51.75 respectively, yet it remained below the 2019-2020 levels. This fluctuation may reflect changes in credit management or customer payment behaviors over time.

Benefits

The benefits amount has demonstrated a consistent upward trend over the analyzed period. Starting at 53,857 million US dollars in 2019, there was a steady increase each year, reaching 88,394 million US dollars by the end of 2023. This represents a significant overall growth, implying an expansion in the scope or scale of benefits provided.

Benefits Payable

The benefits payable also showed a growing pattern from 2019 to 2023. Beginning at 6,004 million US dollars in 2019, this figure rose to 10,241 million US dollars by 2023, indicating an increasing obligation or outstanding benefits yet to be paid over time. The increase appears relatively steady, reflecting possible growth in the volume of unpaid benefits or delayed payments.

Payables Turnover

The payables turnover ratio exhibited variability during the period under review. It started at 8.97 in 2019, declined to 7.57 in 2020, and then fluctuated, reaching 8.63 in 2023. The dip in 2020 could suggest slower payment processing or increased payables relative to purchases/payments due that year, while the subsequent partial recovery indicates some improvement but not a return to the initial 2019 efficiency level. Overall, this ratio suggests changes in payment cycles or management of payables over time.

The financial data indicates notable trends in working capital, external revenues, and working capital turnover over the five-year period ending in 2023.

Working Capital

There is a general upward trend in working capital from 2019 to 2023, with figures increasing from 8,959 million US dollars in 2019 to 11,114 million US dollars in 2023. Despite a slight decrease in 2021 and 2022 compared to 2020, the overall trajectory is positive, suggesting an improvement in the company's short-term financial health and liquidity position.

External Revenues

External revenues show a consistent and significant increase year-over-year, rising from 64,387 million US dollars in 2019 to 105,305 million US dollars in 2023. This steady growth reflects expanding sales or service income and indicates strong top-line performance and potentially increasing market demand or operational scale.

Working Capital Turnover

The working capital turnover ratio demonstrates a rising trend from 7.19 in 2019 to a peak of 10.27 in 2022, indicating growing efficiency in using working capital to generate revenues. However, there is a slight decline to 9.47 in 2023, which may suggest a moderate reduction in asset utilization efficiency despite continued revenue growth. Nevertheless, the overall level remains higher in 2023 than in earlier years, pointing to improved operational performance relative to working capital investment.

Receivables Turnover

The receivables turnover ratio shows variability throughout the analyzed period. It increased from 60.97 in 2019 to a peak of 66.78 in 2020, indicating improved efficiency in collecting receivables during that year. However, a significant decline occurred in 2021 when the ratio dropped to 45.69, suggesting a slower collection process or increased credit sales. Following this decrease, the turnover improved to 55.25 in 2022 but then slightly declined again to 51.75 in 2023. Overall, while the turnover ratio maintains relatively high values, the falling trend post-2020 indicates challenges in maintaining the previous efficiency in receivable collections.

Average Receivable Collection Period

The average collection period in days generally follows the inverse trend of the receivables turnover ratio, as expected. The collection period decreased from 6 days in 2019 to a faster rate of 5 days in 2020, aligning with the peak in receivables turnover during the same year. However, it increased noticeably to 8 days in 2021, corresponding to the reduced turnover ratio. In 2022 and 2023, the collection period shortened slightly to 7 days, reflecting some improvement but still indicating a longer collection cycle than in the initial years. This pattern suggests that the efficiency in collecting receivables deteriorated after 2020 but showed signs of moderate recovery in subsequent years.

Summary of Trends

The data reveals a strong performance in receivables management in 2020, with faster collections and higher turnover. The following year, 2021, marks a decline in collection efficiency, negatively impacting the turnover ratio and extending the collection period. Although there is some recovery in 2022 and 2023, the metrics have not fully returned to the levels observed in 2019 and 2020. This indicates that while efforts may be underway to improve receivables management, challenges remain in maintaining optimal collection speed and turnover ratios.

The financial data indicates fluctuations in the company's payables management over the five-year period ending December 31, 2023.

Payables Turnover

The payables turnover ratio decreased from 8.97 in 2019 to a low of 7.57 in 2020, reflecting a slower rate of payment to suppliers during that year. Subsequently, this ratio improved to 8.35 in 2021, then slightly declined to 8.17 in 2022 before increasing again to 8.63 in 2023. Overall, this suggests some volatility in the company's efficiency in settling payables, with a tendency towards faster payments after 2020.

Average Payables Payment Period

The average payment period lengthened from 41 days in 2019 to 48 days in 2020, signaling a delay in payments during that year. After 2020, the period shortened progressively to 44 days in 2021, 45 days in 2022, and further to 42 days in 2023, indicating a gradual return to quicker payment cycles closer to the initial level seen in 2019.

The inverse relationship between the payables turnover ratio and the average payment period is evident. The year 2020 shows the most significant deviation, with slower payment processing potentially due to external pressures or internal policy adjustments. From 2021 onward, the company appears to have improved its payables management, reducing the average payment period and increasing turnover, enhancing vendor relations and possibly benefiting from better credit terms or operational efficiencies.