Cummins Inc (CMI)
Total asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 34,065,000 | 28,074,000 | 24,021,000 | 19,811,000 | 23,571,000 |
| Total assets | US$ in thousands | 32,005,000 | 30,299,000 | 23,710,000 | 22,624,000 | 19,737,000 |
| Total asset turnover | 1.06 | 0.93 | 1.01 | 0.88 | 1.19 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $34,065,000K ÷ $32,005,000K
= 1.06
Total asset turnover represents the efficiency with which Cummins Inc. utilizes its assets to generate sales. A higher total asset turnover ratio indicates better efficiency in asset utilization.
In the last five years, Cummins Inc.'s total asset turnover ratio has fluctuated. It decreased from 1.19 in 2019 to 0.88 in 2020, suggesting a decline in asset efficiency. However, the ratio rebounded to 1.01 in 2021, indicating improved asset utilization. In 2022, there was a slight decrease to 0.93, but the ratio improved again to 1.06 in 2023.
The recent increase in total asset turnover ratios indicates that Cummins Inc. is becoming more efficient in generating sales from its assets. This trend is generally positive, as higher asset turnover ratios signal the company's ability to generate more revenue per dollar of assets invested. It implies effective management of assets and potentially improved profitability.
Overall, while there have been fluctuations in total asset turnover over the years, the recent trend of increasing ratios suggests a positive shift towards better asset utilization at Cummins Inc.
Peer comparison
Dec 31, 2023