Cummins Inc (CMI)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 25,816,000 | 21,355,000 | 18,326,000 | 14,917,000 | 17,591,000 |
| Payables | US$ in thousands | 4,260,000 | 4,252,000 | 3,021,000 | 2,820,000 | 2,534,000 |
| Payables turnover | 6.06 | 5.02 | 6.07 | 5.29 | 6.94 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $25,816,000K ÷ $4,260,000K
= 6.06
The payables turnover ratio for Cummins Inc. has fluctuated over the past five years. The company's ability to manage its trade payables effectively can be assessed through this ratio, which indicates how many times a company pays off its average accounts payable balance during a given period.
In 2023, Cummins Inc. had a payables turnover of 6.06, showing that the company paid off its accounts payable approximately 6.06 times during the year. This represents an improvement from the previous year, where the ratio was 5.02. It suggests that Cummins Inc. was more efficient in managing its trade payables in 2023.
Comparing the current ratio to earlier years, we can observe fluctuations in performance. In 2021, Cummins Inc. had a payables turnover of 6.07, indicating a similar performance to 2023. However, in 2020 and 2019, the ratios were slightly lower at 5.29 and 6.94, respectively.
Overall, the trend in the payables turnover ratio for Cummins Inc. demonstrates varying levels of efficiency in managing trade payables over the past five years. The company's ability to maintain a stable or increasing payables turnover ratio indicates effective management of its accounts payable and cash flow.
Peer comparison
Dec 31, 2023