Cummins Inc (CMI)
Inventory turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 25,816,000 | 25,225,000 | 24,556,000 | 22,926,000 | 21,355,000 | 19,937,000 | 18,800,000 | 18,573,000 | 18,326,000 | 18,262,000 | 17,477,000 | 15,806,000 | 14,917,000 | 14,713,000 | 15,218,000 | 16,836,000 | 17,591,000 | 17,906,000 | 18,024,000 | 18,136,000 |
| Inventory | US$ in thousands | 5,677,000 | 5,906,000 | 6,026,000 | 5,878,000 | 5,603,000 | 5,543,000 | 4,765,000 | 4,586,000 | 4,355,000 | 4,322,000 | 4,076,000 | 3,753,000 | 3,425,000 | 3,470,000 | 3,655,000 | 3,579,000 | 3,486,000 | 3,821,000 | 3,896,000 | 3,893,000 |
| Inventory turnover | 4.55 | 4.27 | 4.08 | 3.90 | 3.81 | 3.60 | 3.95 | 4.05 | 4.21 | 4.23 | 4.29 | 4.21 | 4.36 | 4.24 | 4.16 | 4.70 | 5.05 | 4.69 | 4.63 | 4.66 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $25,816,000K ÷ $5,677,000K
= 4.55
Cummins Inc.'s inventory turnover has shown a positive trend over the past eight quarters, gradually increasing from 3.81 in Q4 2022 to 4.55 in Q4 2023. This indicates that the company is managing its inventory more efficiently, with inventory being sold and replaced at a faster rate.
A higher inventory turnover ratio signifies that Cummins Inc. is selling its products more quickly or managing its inventory levels more effectively, which can lead to lower carrying costs and potentially higher profitability.
Consistently improving inventory turnover ratios may suggest that the company has effective inventory management practices in place, such as accurate demand forecasting, efficient supply chain management, and judicious inventory control.
Overall, the increasing trend in Cummins Inc.'s inventory turnover ratio reflects positively on the company's operations and efficiency in managing its inventory.
Peer comparison
Dec 31, 2023
Dec 31, 2023