Cummins Inc (CMI)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| 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 |
| Current ratio | 1.18 | 1.27 | 1.74 | 1.88 | 1.50 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $15,198,000K ÷ $12,903,000K
= 1.18
Cummins Inc.'s current ratio has exhibited a declining trend over the past five years. The ratio decreased from 1.50 in 2019 to 1.18 in 2023. This suggests that the company's ability to cover its short-term liabilities with its current assets has weakened over the years. The current ratio was highest in 2021 at 1.74, indicating a better liquidity position compared to the other years presented. However, the ratio has since declined, indicating potential challenges in meeting short-term obligations. It may be advisable for Cummins Inc. to closely monitor its current assets and liabilities to ensure proper management of liquidity going forward.
Peer comparison
Dec 31, 2023