Cummins Inc (CMI)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 735,000 | 2,151,000 | 2,131,000 | 1,789,000 | 2,260,000 |
| Total assets | US$ in thousands | 32,005,000 | 30,299,000 | 23,710,000 | 22,624,000 | 19,737,000 |
| ROA | 2.30% | 7.10% | 8.99% | 7.91% | 11.45% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $735,000K ÷ $32,005,000K
= 2.30%
Cummins Inc.'s return on assets (ROA) has exhibited a declining trend over the past five years. The ROA decreased from 11.45% in 2019 to 2.30% in 2023. This indicates that the company's ability to generate profits from its assets has weakened over this period. A lower ROA could suggest inefficiencies in asset utilization or declining profitability relative to the size of the company's asset base. It is important for Cummins Inc. to closely monitor and address the factors contributing to this downward trend in ROA to improve overall financial performance.
Peer comparison
Dec 31, 2023
Company name
Symbol
ROA
Cummins Inc
CMI
2.30%
Brunswick Corporation
BC
6.75%
BWX Technologies Inc
BWXT
8.95%