Cummins Inc (CMI)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 25,663,000 | 25,792,000 | 25,867,000 | 25,754,000 | 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 |
| Inventory | US$ in thousands | 5,742,000 | 6,134,000 | 5,857,000 | 5,758,000 | 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 |
| Inventory turnover | 4.47 | 4.20 | 4.42 | 4.47 | 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 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $25,663,000K ÷ $5,742,000K
= 4.47
Inventory turnover is a measure of how efficiently a company manages its inventory by evaluating how many times the company sells and replaces its inventory over a specific period. A higher inventory turnover ratio indicates that the company is selling products quickly and efficiently, minimizing inventory holding costs and potential obsolescence.
Analyzing Cummins Inc's inventory turnover data from March 2020 to December 2024, we observe fluctuations in the ratio. The inventory turnover ratio ranged from a low of 3.60 in September 2022 to a high of 4.70 in March 2020. Generally, a consistent inventory turnover ratio is desirable as it signifies a steady pace of selling and restocking.
The trend in Cummins Inc's inventory turnover ratio shows some variability, with peaks and troughs observed over the years. Notably, the ratio decreased from 4.70 in March 2020 to 3.60 in September 2022, indicating a slowdown in inventory turnover efficiency during that period. However, the ratio has shown some improvement since then, standing at 4.47 in December 2024.
It is important to further investigate the factors contributing to the fluctuations in inventory turnover, such as changes in demand, production levels, inventory management practices, and supply chain disruptions. Understanding the underlying reasons for the changes in inventory turnover can provide insights into the company's operational efficiency and potential areas for improvement in inventory management.
Peer comparison
Dec 31, 2024
Dec 31, 2024