Cummins Inc (CMI)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,671,000 | 2,179,000 | 2,020,000 | 2,592,000 | 3,401,000 |
| Short-term investments | US$ in thousands | 593,000 | 562,000 | 553,000 | 595,000 | 461,000 |
| Total current liabilities | US$ in thousands | 11,234,000 | 12,903,000 | 11,421,000 | 7,084,000 | 6,335,000 |
| Cash ratio | 0.20 | 0.21 | 0.23 | 0.45 | 0.61 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,671,000K
+ $593,000K)
÷ $11,234,000K
= 0.20
The cash ratio for Cummins Inc has shown a downward trend over the past five years, declining from 0.61 in December 2020 to 0.20 in December 2024. This indicates a decrease in the company's ability to cover its short-term liabilities solely with its cash and cash equivalents. A cash ratio below 1 may suggest that Cummins Inc may not have sufficient liquid assets to meet its current obligations. It is important to monitor this trend and explore the reasons behind the decline in the cash ratio to ensure the company's financial health and liquidity position.
Peer comparison
Dec 31, 2024