Cummins Inc (CMI)
Working capital 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 current assets | US$ in thousands | 15,198,000 | 14,451,000 | 12,309,000 | 11,897,000 | 9,387,000 |
| Total current liabilities | US$ in thousands | 12,903,000 | 11,421,000 | 7,084,000 | 6,335,000 | 6,260,000 |
| Working capital turnover | 14.84 | 9.27 | 4.60 | 3.56 | 7.54 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $34,065,000K ÷ ($15,198,000K – $12,903,000K)
= 14.84
The working capital turnover ratio for Cummins Inc. has shown a fluctuating trend over the past 5 years. The ratio increased significantly from 3.56 in 2020 to 14.84 in 2023, indicating that the company was able to generate more revenue per dollar of working capital invested. This improvement suggests that Cummins became more efficient in utilizing its working capital to support its operations and generate sales.
The notable increase in the working capital turnover ratio implies that Cummins managed its current assets and liabilities more effectively in 2023 compared to the previous years. A higher working capital turnover ratio is generally seen as a positive sign of operational efficiency and financial management, as it shows the company's ability to generate revenue from its working capital resources efficiently.
However, it is important to note that the working capital turnover ratio can be influenced by various factors such as industry dynamics, business cycles, and management decisions. Therefore, a detailed analysis of the company's financial statements and operational activities is essential to fully understand the drivers behind the fluctuations in the working capital turnover ratio for Cummins Inc.
Peer comparison
Dec 31, 2023