Humana Inc (HUM)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	47,065,000	43,055,000	44,358,000	34,969,000	29,074,000
Total stockholders’ equity	US$ in thousands	16,262,000	15,311,000	16,080,000	13,728,000	12,037,000
Financial leverage ratio		2.89	2.81	2.76	2.55	2.42

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $47,065,000K ÷ $16,262,000K
= 2.89

Humana Inc.'s financial leverage ratio has shown an increasing trend over the past five years, indicating a higher level of leverage in the company's capital structure. The ratio has steadily risen from 2.42 in 2019 to 2.89 in 2023, suggesting an increased reliance on debt financing compared to equity.

This escalation in the financial leverage ratio may be attributed to various factors such as taking on additional debt to fund expansion, acquisitions, or other strategic initiatives. While leveraging can amplify returns during periods of growth, it also increases the company's financial risk as higher debt levels lead to higher interest payments and potential challenges in meeting obligations during economic downturns.

Investors and stakeholders should closely monitor Humana Inc.'s financial leverage ratio and assess the company's ability to manage its debt levels effectively to ensure sustainable growth and profitability in the long term. Additionally, a higher financial leverage ratio implies a higher risk profile for the company and may impact its creditworthiness in the eyes of creditors and investors.