Cummins Inc (CMI)
Cash ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 2,179,000 | 2,387,000 | 1,802,000 | 1,980,000 | 2,020,000 | 2,499,000 | 2,462,000 | 2,276,000 | 2,592,000 | 2,588,000 | 2,481,000 | 2,958,000 | 3,401,000 | 2,967,000 | 1,751,000 | 1,691,000 | 1,129,000 | 1,560,000 | 1,397,000 | 1,328,000 |
| Short-term investments | US$ in thousands | 562,000 | 677,000 | 512,000 | 459,000 | 553,000 | 466,000 | 536,000 | 527,000 | 595,000 | 430,000 | 438,000 | 397,000 | 461,000 | 345,000 | 353,000 | 339,000 | 341,000 | 303,000 | 335,000 | 246,000 |
| Total current liabilities | US$ in thousands | 12,903,000 | 11,126,000 | 11,045,000 | 11,923,000 | 11,421,000 | 10,530,000 | 7,671,000 | 7,512,000 | 7,084,000 | 6,861,000 | 6,604,000 | 6,660,000 | 6,335,000 | 5,709,000 | 6,916,000 | 6,982,000 | 6,260,000 | 6,725,000 | 6,289,000 | 6,427,000 |
| Cash ratio | 0.21 | 0.28 | 0.21 | 0.20 | 0.23 | 0.28 | 0.39 | 0.37 | 0.45 | 0.44 | 0.44 | 0.50 | 0.61 | 0.58 | 0.30 | 0.29 | 0.23 | 0.28 | 0.28 | 0.24 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,179,000K
+ $562,000K)
÷ $12,903,000K
= 0.21
The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.
Based on the data provided for Cummins Inc., the cash ratio has fluctuated over the past eight quarters. In Q4 2023, the cash ratio stood at 0.31, slightly lower than the ratios in Q2 and Q4 2022, which were both at 0.32. This suggests that Cummins Inc. may have slightly less available cash relative to its current liabilities in Q4 2023 compared to the previous quarters.
The highest cash ratio observed was in Q3 2022 at 0.50, indicating a relatively strong liquidity position at that time. However, the cash ratio has been generally declining since then, with some fluctuations. While the cash ratio has dipped below 0.40 in recent quarters, it has remained above 0.30, indicating that Cummins Inc. has maintained a reasonable level of cash reserves compared to its short-term obligations.
Overall, the trend in Cummins Inc.'s cash ratio suggests that the company has been managing its liquidity reasonably well, although a close monitoring of its cash position and short-term liabilities is warranted to ensure continued financial stability.
Peer comparison
Dec 31, 2023