Selected balance sheet and income statement information for Humana Inc., a health and well- being company, follows. Company ($ millions) 20Y2 20Y2 20Y2 20Y1 20Y2 20Y1 Revenue Humana Inc. (HUM) $56,912 Net income $1,683 $25,413 $27,178 Assets Assets Stockholders' Stockholders' equity equity $10,161 $9,842 Required: Compute the following 20Y2 ratios for Humana. a. Return on equity (ROE) b. Profit margin (PM) c. Financial leverage (FL) Solution: 20Y2 20Y1 Net income 1683 Equity 10161 ROE = Net income / Average equity 0.17 Net income 1683 Revenue 56912 Profit margin (PM) = Net income / Revenue 0.03 Assets Equity 25413 10161 Financial leverage = Average assets / Average equity 2.50