Cummins Inc (CMI)
Payables 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 |
| Payables | US$ in thousands | 3,951,000 | 4,260,000 | 4,252,000 | 3,021,000 | 2,820,000 |
| Payables turnover | 6.50 | 6.06 | 5.02 | 6.07 | 5.29 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $25,663,000K ÷ $3,951,000K
= 6.50
The payables turnover ratio for Cummins Inc has shown a fluctuating trend over the past five years. In December 2020, the ratio was 5.29, indicating that on average, the company took approximately 5.29 times to pay off its accounts payable during that year.
By December 2021, the payables turnover ratio improved to 6.07, suggesting that Cummins Inc was managing its accounts payable more efficiently, taking less time to pay off its suppliers. However, in December 2022, the ratio decreased to 5.02, signaling a potential slowdown in the company's ability to settle its payables promptly.
Subsequently, in December 2023, there was a notable increase in the payables turnover ratio to 6.06, reflecting an improvement in Cummins Inc's management of accounts payable. This positive trend continued into December 2024, with the ratio reaching 6.50, indicating that the company was effectively managing its payables, possibly through negotiating better terms with suppliers or streamlining its payment processes.
Overall, the fluctuations in Cummins Inc's payables turnover ratio suggest varying levels of efficiency in managing its accounts payable over the five-year period, with the company demonstrating an ability to adapt and improve its payables management practices.
Peer comparison
Dec 31, 2024