Humana Inc (HUM)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	4,694,000	5,061,000	3,394,000	4,673,000	4,054,000
Short-term investments	US$ in thousands	16,626,000	13,881,000	13,192,000	12,554,000	10,972,000
Total current liabilities	US$ in thousands	18,872,000	17,178,000	15,331,000	13,394,000	10,929,000
Cash ratio		1.13	1.10	1.08	1.29	1.37

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($4,694,000K + $16,626,000K) ÷ $18,872,000K
= 1.13

The cash ratio of Humana Inc. has shown a fluctuating trend over the past five years. The ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents.

In 2023, the cash ratio decreased to 1.23 from 1.13 in 2022, which may suggest a slight decrease in the company's ability to cover its short-term obligations solely with cash on hand. However, a cash ratio of 1.23 still indicates that Humana Inc. has sufficient cash reserves to meet its short-term liabilities.

Comparing 2023 to 2021 and 2020, where the cash ratios were higher at 1.28 and 1.33 respectively, it appears that the company had higher liquidity in those years. The slight decrease in the cash ratio in 2023 could be due to various factors such as changes in operating cash flows, investment activities, or changes in management of cash and cash equivalents.

Overall, while the decreasing trend in cash ratio over the past few years may raise some concerns about liquidity management, Humana Inc. has consistently maintained a cash ratio above 1, indicating that it has sufficient cash to cover its short-term obligations. Monitoring the trend of the cash ratio over the coming years will be important to assess the company's liquidity position.