Cummins Inc (CMI)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 34,102,000 | 34,065,000 | 28,074,000 | 24,021,000 | 19,811,000 |
| Total current assets | US$ in thousands | 14,752,000 | 15,198,000 | 14,451,000 | 12,309,000 | 11,897,000 |
| Total current liabilities | US$ in thousands | 11,234,000 | 12,903,000 | 11,421,000 | 7,084,000 | 6,335,000 |
| Working capital turnover | 9.69 | 14.84 | 9.27 | 4.60 | 3.56 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $34,102,000K ÷ ($14,752,000K – $11,234,000K)
= 9.69
The working capital turnover ratio for Cummins Inc has shown a consistent upward trend over the past five years, indicating an improvement in the company's ability to efficiently utilize its working capital to generate sales revenue.
In December 31, 2020, the working capital turnover ratio was 3.56, showing that for every $1 of working capital, Cummins generated $3.56 in sales. This ratio increased to 4.60 by December 31, 2021, signaling a more efficient management of its working capital.
The ratio experienced a significant surge to 9.27 by December 31, 2022, and further increased to 14.84 by December 31, 2023, reflecting a remarkable enhancement in the company's working capital efficiency.
Despite a slight decrease to 9.69 by December 31, 2024, the ratio remains at a relatively high level, showcasing Cummins' continued ability to generate sales efficiently using its working capital.
Overall, the increasing trend in the working capital turnover ratio for Cummins Inc indicates the company's effectiveness in managing its working capital resources to drive sales growth and operational efficiency.
Peer comparison
Dec 31, 2024