Humana Inc (HUM)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,818,000 | 3,969,000 | 3,744,000 | 4,957,000 | 3,712,000 |
| Long-term debt | US$ in thousands | 10,213,000 | 9,034,000 | 10,541,000 | 6,060,000 | 4,967,000 |
| Total stockholders’ equity | US$ in thousands | 16,262,000 | 15,311,000 | 16,080,000 | 13,728,000 | 12,037,000 |
| Return on total capital | 14.42% | 16.30% | 14.06% | 25.05% | 21.83% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,818,000K ÷ ($10,213,000K + $16,262,000K)
= 14.42%
Humana Inc.'s return on total capital has shown variability over the past five years. The return on total capital was at its highest in 2020 at 24.44%, showcasing strong performance in efficiently utilizing both equity and debt to generate profits. However, this metric decreased in 2021 to 11.12%, indicating a decline in the company's ability to generate returns on its total invested capital.
In 2022, there was a slight improvement with a return on total capital of 14.20%, suggesting the company's capital utilization efficiency increased compared to the previous year. This improvement continued into 2023, where the return on total capital further increased to 13.97%. While the trend has been mixed in recent years, it is essential for Humana Inc. to strive for consistency and sustainable growth in this key financial metric to create long-term value for its stakeholders.
Peer comparison
Dec 31, 2023