Compute DuPont Analysis Ratios

Selected balance sheet and income statement information for Humana Inc., a health and wellbeing 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
	AnswerAverage assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield	AnswerAverage assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield
	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
	AnswerAverage assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield	AnswerAverage assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield
	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
	AnswerAverage assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield	AnswerAverage assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield
	Answer	Answer