Humana Inc (HUM)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | 660,000 | 493,000 | 401,000 | 326,000 | 283,000 |
| Interest coverage | 3.88 | 8.14 | 9.48 | 9.66 | 17.62 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,562,000K ÷ $660,000K
= 3.88
The interest coverage ratio for Humana Inc has shown a gradual decrease over the past five years. Starting at a robust level of 17.62 in December 2020, the ratio has steadily declined to 9.66 by December 2021, further decreasing to 9.48 by December 2022, then to 8.14 by December 2023, and finally dropping to 3.88 by December 2024.
This declining trend indicates that the company's ability to cover its interest expenses with its earnings has weakened over time. A lower interest coverage ratio suggests that Humana Inc may be facing challenges in meeting its interest obligations from its operating income. It is important for investors and stakeholders to monitor this ratio closely as a declining trend could indicate potential financial distress or inefficiencies in managing debt obligations.
Peer comparison
Dec 31, 2024