Compute DuPont Analysis Ratios Selected balance sheet and income statement information for Humana Inc., a health and well‑being company, follows. 2018 2017 2018 2018 Net 2018 2017 Stockholders’ Stockholders’ Company ($ millions) Ticker Revenue income Assets Assets Equity Equity Humana Inc HUM $66,610 $11,381 $35,111 $36,876 $19,859 $19,540 Compute the following 2018 ratios for Humana. a. Return on equity (ROE) Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROE. Numerator Denominator ROE Answer Answer Answer Answer b. Profit margin (PM) Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM. Numerator Denominator PM Answer Answer Answer Answer c. Financial leverage (FL) Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL. Numerator Denominator FL Answer Answer Answer Answer
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Compute DuPont Analysis Ratios
Selected
| 2018 | 2017 | ||||||
|---|---|---|---|---|---|---|---|
| 2018 | 2018 Net | 2018 | 2017 | Stockholders’ | Stockholders’ | ||
| Company ($ millions) | Ticker | Revenue | income | Assets | Assets | Equity | Equity |
| Humana Inc | HUM | $66,610 | $11,381 | $35,111 | $36,876 | $19,859 | $19,540 |
Compute the following 2018 ratios for Humana.
a.
Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROE.
| Numerator | Denominator | ROE | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
b. Profit margin (PM)
Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM.
| Numerator | Denominator | PM | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
c. Financial leverage (FL)
Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL.
| Numerator | Denominator | FL | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
|
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