Humana Inc (HUM)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.59 | 1.37 | 1.37 | 1.39 | 1.52 | 1.35 | 1.53 | 1.53 | 1.62 | 1.72 | 1.71 | 1.67 | 1.77 | 1.81 | 1.69 | 1.66 | 1.82 | 1.83 | 1.75 | 1.65 |
| Quick ratio | 1.24 | 1.15 | 1.16 | 1.18 | 1.20 | 1.13 | 1.21 | 1.21 | 1.20 | 1.32 | 1.28 | 1.26 | 1.37 | 1.47 | 1.35 | 1.29 | 1.47 | 1.52 | 1.36 | 1.32 |
| Cash ratio | 1.13 | 1.09 | 1.11 | 1.06 | 1.10 | 1.07 | 1.02 | 1.02 | 1.08 | 1.20 | 1.12 | 1.12 | 1.29 | 1.39 | 1.22 | 1.16 | 1.37 | 1.44 | 1.28 | 1.15 |
The liquidity ratios of Humana Inc. provide insights into the company's ability to meet short-term obligations and manage its current financial resources effectively.
The current ratio has shown some fluctuations over the past eight quarters, ranging from 1.37 to 1.59. A current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting a strong ability to cover short-term obligations. However, the downward trend from Q4 2022 to Q3 2023 raises some concerns about potential liquidity challenges in the short term.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Humana's quick ratio has varied significantly, with a low of 0.80 in Q3 2022 to a high of 1.34 in Q4 2023. A quick ratio below 1 may indicate a dependency on inventory to meet short-term obligations, suggesting potential liquidity issues. The substantial improvement in Q4 2023 is a positive sign of increased liquidity.
The cash ratio, which focuses solely on the company's cash and cash equivalents, has also fluctuated over the quarters. A cash ratio above 1 signifies that the company holds sufficient cash to cover its current liabilities. The upward trend from Q1 2022 to Q4 2023 indicates an improved ability to meet short-term obligations with available cash.
In summary, while Humana Inc. has maintained relatively healthy liquidity ratios, the fluctuations in the current, quick, and cash ratios highlight the importance of consistent monitoring and management of short-term liquidity to support ongoing operations and financial stability.
See also:
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 6.98 | 6.50 | 5.28 | 11.86 | 6.58 | 6.42 | 13.76 | 13.41 | 7.97 | 8.46 | 11.06 | 10.16 | 5.38 | 5.57 | 11.58 | 10.83 | 5.94 | 4.93 | 5.43 | 12.15 |
The cash conversion cycle of Humana Inc. measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash flows from sales.
From Q1 2022 to Q4 2023, Humana Inc.'s cash conversion cycle fluctuated, ranging from a low of 5.28 days in Q2 2023 to a high of 13.76 days in Q2 2022. A lower cash conversion cycle indicates that the company is efficient in managing its working capital and collecting cash from sales faster.
In the most recent quarter, Q4 2023, Humana Inc.'s cash conversion cycle was 6.98 days, a slight increase compared to the previous quarter's 6.50 days. This suggests that the company may have experienced a slightly slower conversion of inventory and accounts receivable into cash during the quarter.
Overall, maintaining a low and consistent cash conversion cycle is favorable as it indicates effective working capital management and liquidity for Humana Inc.