Humana Inc (HUM)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | 493,000 | 401,000 | 326,000 | 283,000 | 242,000 |
| Interest coverage | 7.74 | 9.90 | 11.48 | 17.52 | 15.34 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,818,000K ÷ $493,000K
= 7.74
Humana Inc.'s interest coverage ratio has fluctuated over the past five years, indicating the company's ability to meet its interest obligations. In 2023, the interest coverage ratio was 8.01, representing a slight decrease from the previous year's ratio of 9.47. Despite the slight decline, the ratio remains at a healthy level above 1, indicating that the company's operating income is sufficient to cover its interest expenses.
Comparing to the ratios in 2021, 2020, and 2019, the interest coverage ratio has seen a general downward trend. However, all the ratios for these years were well above 1, signifying that Humana Inc. has consistently generated operating income that comfortably covers its interest payments.
The significant decrease in the interest coverage ratio in 2023 compared to 2020 and 2019 may warrant further investigation into the factors driving this decline. Overall, while the recent decline in the ratio should be monitored, the company's interest coverage remains at a satisfactory level, reflecting a healthy financial position in terms of meeting its interest obligations.
Peer comparison
Dec 31, 2023