Humana Inc (HUM)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,562,000 | 4,013,000 | 3,800,000 | 3,148,000 | 4,986,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 16,375,000 | 16,262,000 | 15,311,000 | 16,080,000 | 13,728,000 |
| Return on total capital | 15.65% | 24.68% | 24.82% | 19.58% | 36.32% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,562,000K ÷ ($—K + $16,375,000K)
= 15.65%
Humana Inc's return on total capital has varied over the past five years. The return on total capital was notably high in December 31, 2020, at 36.32%, indicating efficient use of both equity and debt to generate profits. However, this figure decreased significantly to 19.58% by December 31, 2021, which may signal a decline in profitability or effectiveness in capital utilization.
In the subsequent years, Humana Inc managed to improve its return on total capital, reaching 24.82% by December 31, 2022, and maintaining a similar level at 24.68% by December 31, 2023. This suggests that the company took steps to enhance its efficiency in utilizing capital resources effectively to generate returns for shareholders.
Nevertheless, by December 31, 2024, the return on total capital dropped to 15.65%, signaling a decrease in profitability or perhaps a less efficient utilization of capital during that period. It would be essential for Humana Inc to assess the factors contributing to this decrease and consider strategies to improve its return on total capital in upcoming periods to ensure sustainable performance and value creation for its stakeholders.
Peer comparison
Dec 31, 2024