Humana Inc (HUM)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,562,000 | 2,757,000 | 3,235,000 | 3,530,000 | 4,013,000 | 4,396,000 | 4,594,000 | 4,382,000 | 3,969,000 | 3,960,000 | 4,295,000 | 3,921,000 | 3,744,000 | 3,372,000 | 3,498,000 | 5,083,000 | 5,028,000 | 5,736,000 | 4,739,000 | 3,419,000 |
| Interest expense (ttm) | US$ in thousands | 660,000 | 642,000 | 587,000 | 539,000 | 493,000 | 455,000 | 443,000 | 424,000 | 401,000 | 384,000 | 370,000 | 348,000 | 326,000 | 307,000 | 294,000 | 291,000 | 283,000 | 269,000 | 256,000 | 240,000 |
| Interest coverage | 3.88 | 4.29 | 5.51 | 6.55 | 8.14 | 9.66 | 10.37 | 10.33 | 9.90 | 10.31 | 11.61 | 11.27 | 11.48 | 10.98 | 11.90 | 17.47 | 17.77 | 21.32 | 18.51 | 14.25 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,562,000K ÷ $660,000K
= 3.88
The interest coverage ratio of Humana Inc has shown a decreasing trend over the period from March 31, 2020 to December 31, 2024. The ratio started at a healthy level of 14.25 in March 2020, indicating that the company was able to cover its interest expenses 14.25 times with its operating income. However, the ratio increased steadily to its peak at 21.32 in September 30, 2020, suggesting an improvement in the company's ability to meet its interest obligations.
Subsequently, the interest coverage ratio began to decline, indicating a potential weakening in Humana Inc's ability to cover its interest payments. By June 30, 2021, the ratio had dropped to 11.90 and continued to decrease to 8.14 by December 31, 2023. This declining trend may raise concerns about the company's financial health and its ability to service its debt.
It is crucial for stakeholders to monitor the interest coverage ratio closely as a decreasing trend could indicate increasing financial risk for Humana Inc, potentially leading to difficulties in meeting its debt obligations. It would be prudent for the company to implement strategies to improve this ratio and ensure its long-term sustainability and financial stability.
Peer comparison
Dec 31, 2024