Cummins Inc (CMI)
Current ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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 |
| Current ratio | 1.31 | 1.18 | 1.27 | 1.74 | 1.88 |
December 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $14,752,000K ÷ $11,234,000K
= 1.31
Cummins Inc's current ratio has shown a decreasing trend over the past five years, starting at 1.88 in December 31, 2020, and gradually declining to 1.31 by December 31, 2024. This indicates that the company's current assets may be becoming less sufficient to cover its current liabilities. While a current ratio above 1 typically signifies that a company can meet its short-term obligations, a declining ratio could raise concerns about liquidity management. Further analysis of the components of current assets and liabilities is recommended to understand the factors contributing to this trend and assess the company's short-term financial health.
Peer comparison
Dec 31, 2024