Cummins Inc (CMI)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 25,663,000 | 25,816,000 | 21,355,000 | 18,326,000 | 14,917,000 |
| Inventory | US$ in thousands | 5,742,000 | 5,677,000 | 5,603,000 | 4,355,000 | 3,425,000 |
| Inventory turnover | 4.47 | 4.55 | 3.81 | 4.21 | 4.36 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $25,663,000K ÷ $5,742,000K
= 4.47
The inventory turnover ratio for Cummins Inc has shown some fluctuations over the past five years. The ratio decreased from 4.36 in 2020 to 4.21 in 2021, indicating that the company took slightly longer to sell its inventory in 2021. This was followed by a further decrease to 3.81 in 2022, suggesting that the company may have had excess inventory on hand relative to its sales during that year.
However, there was a notable improvement in the inventory turnover ratio in 2023, increasing to 4.55. This suggests that Cummins Inc managed its inventory more efficiently, selling inventory at a faster rate compared to the previous year. In 2024, the inventory turnover ratio remained relatively stable at 4.47, indicating that the company continued to effectively manage its inventory turnover.
Overall, the trend in the inventory turnover ratio for Cummins Inc indicates some fluctuations, but the company has shown the ability to adjust its inventory management practices accordingly. A higher inventory turnover ratio generally indicates better efficiency in selling inventory and managing working capital.
Peer comparison
Dec 31, 2024