Cummins Inc (CMI)
Profitability ratios
Return on sales
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 24.22% | 24.23% | 23.72% | 23.94% | 23.93% | 23.77% | 24.16% | 23.61% | 23.71% | 23.91% | 24.51% | 24.34% | 24.70% | 24.78% | 24.70% | 25.43% | 25.37% | 25.76% | 25.81% | 25.07% |
| Operating profit margin | 5.17% | 11.34% | 10.72% | 11.12% | 10.43% | 10.03% | 10.74% | 10.28% | 11.27% | 11.83% | 12.28% | 11.70% | 11.45% | 10.19% | 10.01% | 11.23% | 11.45% | 12.76% | 13.09% | 12.62% |
| Pretax margin | 4.46% | 10.68% | 10.28% | 10.71% | 9.93% | 9.67% | 10.48% | 10.35% | 11.32% | 15.40% | 16.03% | 15.86% | 16.03% | 15.69% | 15.57% | 16.11% | 16.29% | 17.03% | 17.06% | 20.18% |
| Net profit margin | 2.16% | 8.40% | 7.89% | 8.37% | 7.66% | 7.32% | 8.26% | 8.00% | 8.87% | 12.91% | 13.24% | 13.12% | 13.37% | 13.30% | 13.47% | 13.82% | 13.89% | 14.54% | 14.72% | 17.93% |
Cummins Inc.'s profitability ratios have shown fluctuations over the past eight quarters. The gross profit margin has generally been stable around the mid-20% range, indicating the company's ability to efficiently convert revenue into gross profit.
The operating profit margin has also been relatively steady, with Q3 2023 showing a slight decrease compared to the previous quarter. This margin reflects the company's ability to control operating expenses relative to revenue.
The pretax margin has experienced some volatility, with Q4 2023 notably dropping to 4.77%, indicating lower profitability before accounting for taxes. This may be a result of increased expenses or lower revenue during that period.
Net profit margin, representing the company's bottom-line profitability, has shown variability as well, with Q3 2023 reflecting a substantial increase to 8.40% compared to previous quarters. This fluctuation may be due to changes in tax expenses, interest costs, or other non-operating factors impacting net income.
Overall, while Cummins Inc. has maintained relatively stable gross and operating profit margins, the fluctuations in pretax and net profit margins suggest some level of volatility in its profitability over the analyzed periods. It would be beneficial for investors and stakeholders to closely monitor these ratios to assess the company's financial health and performance.
Return on investment
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.50% | 11.76% | 10.87% | 10.66% | 9.67% | 8.81% | 10.88% | 10.36% | 11.41% | 12.31% | 12.58% | 10.65% | 10.03% | 9.25% | 9.96% | 12.63% | 13.68% | 15.12% | 15.71% | 15.39% |
| Return on assets (ROA) | 2.30% | 8.71% | 8.01% | 8.03% | 7.10% | 6.43% | 8.37% | 8.07% | 8.99% | 13.43% | 13.56% | 11.94% | 11.71% | 12.06% | 13.40% | 15.55% | 16.58% | 17.23% | 17.66% | 21.87% |
| Return on total capital | 11.57% | 21.45% | 19.59% | 19.70% | 17.89% | 16.37% | 20.72% | 20.01% | 21.46% | 22.96% | 23.37% | 19.64% | 17.83% | 16.30% | 17.69% | 23.63% | 26.44% | 28.38% | 29.42% | 29.07% |
| Return on equity (ROE) | 8.31% | 26.24% | 24.58% | 26.22% | 23.97% | 22.84% | 23.44% | 23.07% | 26.16% | 38.33% | 38.97% | 33.80% | 32.86% | 33.78% | 37.85% | 44.16% | 43.60% | 44.89% | 43.20% | 55.51% |
Cummins Inc.'s profitability ratios display a generally positive trend over the quarters under consideration.
1. Operating return on assets (Operating ROA) has shown a consistent improvement, starting from 8.84% in Q4 2022 and reaching 10.26% in Q4 2023. This indicates the company's ability to generate operating income from its assets has been strengthening steadily.
2. Return on assets (ROA) experienced some fluctuations but generally remained at healthy levels, hovering between 7.10% to 8.71% over the quarters. This metric suggests that Cummins Inc. is efficiently utilizing its assets to generate profits.
3. Return on total capital exhibited an increasing trend, with Q4 2023 reaching the highest point at 24.41%. This signifies that the company is effectively generating returns from both debt and equity capital invested in its operations.
4. Return on equity (ROE) had significant variability, but overall displayed a positive trajectory, reaching a peak of 26.24% in Q3 2023. This indicates that Cummins Inc. is rewarding its shareholders by generating solid returns on their investments.
In conclusion, the profitability ratios of Cummins Inc. demonstrate a consistent improvement in operational efficiency, asset utilization, and overall returns to both capital providers and equity investors over the quarters analyzed.