Cummins Inc (CMI)
Current 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 15,198,000 | 15,912,000 | 15,410,000 | 15,368,000 | 14,451,000 | 14,398,000 | 12,762,000 | 12,596,000 | 12,309,000 | 12,320,000 | 11,931,000 | 12,122,000 | 11,897,000 | 11,062,000 | 9,834,000 | 9,790,000 | 9,387,000 | 10,228,000 | 10,450,000 | 10,091,000 |
| 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 |
| Current ratio | 1.18 | 1.43 | 1.40 | 1.29 | 1.27 | 1.37 | 1.66 | 1.68 | 1.74 | 1.80 | 1.81 | 1.82 | 1.88 | 1.94 | 1.42 | 1.40 | 1.50 | 1.52 | 1.66 | 1.57 |
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 shown fluctuations over the past eight quarters as per the provided data. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, stood at 1.18 in Q4 2023, exhibiting a decline compared to the previous quarter.
The downward trend in the current ratio from 1.43 in Q3 2023 to 1.18 in Q4 2023 may indicate a potential liquidity concern. The ratio falling below 1 suggests that Cummins Inc. may face difficulties in meeting its short-term obligations with its current assets alone.
Furthermore, the current ratio of Cummins Inc. has generally been on a declining trend since Q1 2022 when it was at its peak of 1.68. This downward trend raises a red flag regarding the company's liquidity position and its ability to manage short-term financial commitments in recent quarters.
It is advisable for stakeholders to closely monitor Cummins Inc.'s liquidity position and financial health, particularly in terms of its ability to convert current assets into cash to meet short-term liabilities, based on the declining current ratio trend observed over the past quarters.
Peer comparison
Dec 31, 2023