Humana Inc (HUM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Operating profit margin | 2.18% | 3.77% | 4.09% | 3.79% | 6.46% |
| Pretax margin | 1.38% | 3.12% | 3.84% | 4.12% | 6.06% |
| Net profit margin | 1.02% | 2.34% | 3.02% | 3.53% | 4.36% |
Based on the provided data, Humana Inc's profitability ratios show a consistent and high gross profit margin of 100.00% from 2020 to 2024, indicating that the company effectively manages its cost of goods sold.
However, the trend in operating profit margin shows a slight decline over the years, decreasing from 6.46% in 2020 to 2.18% in 2024. This suggests that Humana's operating expenses relative to its revenue have increased, impacting the company's operational efficiency.
Similarly, the pretax margin has also decreased steadily, from 6.06% in 2020 to 1.38% in 2024, indicating the company's declining profitability before accounting for taxes.
Moreover, the net profit margin has shown a downward trend, declining from 4.36% in 2020 to 1.02% in 2024. This indicates that after considering all expenses, including taxes, Humana's bottom line profitability has decreased over the years.
In conclusion, while Humana Inc maintains a strong gross profit margin, its operating, pretax, and net profit margins have been decreasing year over year, highlighting potential challenges in cost management and overall profitability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.51% | 8.53% | 8.83% | 7.10% | 14.26% |
| Return on assets (ROA) | 2.60% | 5.29% | 6.52% | 6.61% | 9.63% |
| Return on total capital | 15.65% | 24.68% | 24.82% | 19.58% | 36.32% |
| Return on equity (ROE) | 7.37% | 15.31% | 18.33% | 18.24% | 24.53% |
Humana Inc's profitability ratios have shown a mixed trend over the past five years.
- The Operating return on assets (Operating ROA) decreased from 14.26% in 2020 to 5.51% in 2024, indicating a decline in the company's operating efficiency in generating profits from its assets.
- The Return on assets (ROA) also decreased over the same period from 9.63% in 2020 to 2.60% in 2024, reflecting a decrease in the company's overall profitability in relation to its total assets.
- The Return on total capital decreased from 36.32% in 2020 to 15.65% in 2024, suggesting a decline in the company's ability to generate returns on its total capital employed.
- The Return on equity (ROE) also decreased from 24.53% in 2020 to 7.37% in 2024, indicating a decrease in the company's profitability in relation to the equity invested by shareholders.
Overall, the declining trend in these profitability ratios may raise concerns about Humana Inc's ability to efficiently utilize its assets and generate satisfactory returns for its investors. Further analysis and investigation into the reasons behind these declines would be warranted to understand the company's overall financial health and performance.