Cummins Inc (CMI)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 34,065,000 | 28,074,000 | 24,021,000 | 19,811,000 | 23,571,000 |
| Property, plant and equipment | US$ in thousands | 6,249,000 | 5,521,000 | 4,422,000 | 4,255,000 | 4,245,000 |
| Fixed asset turnover | 5.45 | 5.08 | 5.43 | 4.66 | 5.55 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $34,065,000K ÷ $6,249,000K
= 5.45
Cummins Inc.'s fixed asset turnover ratio has shown variability over the past five years. The ratio measures the efficiency with which the company generates revenue from its fixed assets.
In 2023, the fixed asset turnover ratio increased to 5.45, indicating that Cummins generated $5.45 in revenue for every $1 invested in fixed assets. This improvement suggests that the company was able to utilize its fixed assets more effectively to generate sales compared to the previous year.
Conversely, in 2020, the fixed asset turnover ratio decreased to 4.66, signaling a decline in the company's efficiency in generating revenue from its fixed asset base. However, this was followed by a notable rebound in 2021, with the ratio increasing to 5.43, demonstrating an improvement in asset utilization efficiency.
Overall, despite some fluctuations, Cummins Inc. has generally maintained a solid performance in terms of fixed asset turnover over the past five years, with the ratio consistently above 5. This indicates that the company has been efficient in generating sales relative to its investment in fixed assets, which is a positive indicator of operational efficiency and effective asset management.
Peer comparison
Dec 31, 2023