Cummins Inc (CMI)
Payables 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 |
| Payables | US$ in thousands | 4,260,000 | 4,262,000 | 4,308,000 | 4,636,000 | 4,252,000 | 4,000,000 | 3,405,000 | 3,497,000 | 3,021,000 | 3,210,000 | 3,172,000 | 3,279,000 | 2,820,000 | 2,597,000 | 2,281,000 | 2,648,000 | 2,534,000 | 2,830,000 | 2,991,000 | 3,018,000 |
| Payables turnover | 6.06 | 5.92 | 5.70 | 4.95 | 5.02 | 4.98 | 5.52 | 5.31 | 6.07 | 5.69 | 5.51 | 4.82 | 5.29 | 5.67 | 6.67 | 6.36 | 6.94 | 6.33 | 6.03 | 6.01 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $25,816,000K ÷ $4,260,000K
= 6.06
Cummins Inc.'s payables turnover has shown some fluctuation over the past eight quarters. The payables turnover ratio measures how efficiently the company is managing its trade payables by analyzing how many times the company pays off its suppliers in a given period.
In Q4 2023, the payables turnover ratio increased to 6.06 from the previous quarter's 5.92, indicating that Cummins Inc. paid its suppliers approximately 6.06 times during the quarter. This increase suggests that the company is managing its trade payables more efficiently compared to the previous quarter.
Looking back over the past year, the payables turnover ratio ranged from 4.95 to 6.06. The highest ratio was observed in Q4 2023, indicating an improvement in managing supplier payments compared to the other quarters. On average, the payables turnover ratio seems healthy, consistently above 5, which suggests that Cummins Inc. is efficiently handling its trade payables.
Overall, the upward trend in the payables turnover ratio in Q4 2023 indicates that Cummins Inc. may be effectively managing its relationships with suppliers and paying off its obligations in a timely manner.
Peer comparison
Dec 31, 2023