Cummins Inc (CMI)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 3,946,000 | 735,000 | 2,151,000 | 2,131,000 | 1,789,000 |
| Total stockholders’ equity | US$ in thousands | 10,271,000 | 8,850,000 | 8,975,000 | 8,146,000 | 8,062,000 |
| ROE | 38.42% | 8.31% | 23.97% | 26.16% | 22.19% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $3,946,000K ÷ $10,271,000K
= 38.42%
Cummins Inc's return on equity (ROE) has displayed some fluctuations over the years. The company's ROE increased from 22.19% in 2020 to 26.16% in 2021, indicating improved profitability and efficiency in generating returns for its shareholders. However, the ROE slightly decreased to 23.97% in 2022 before experiencing a significant drop to 8.31% in 2023. This sharp decline may suggest challenges or reduced profitability in that particular year for Cummins Inc.
Subsequently, the company's ROE sharply rebounded to 38.42% in 2024, surpassing previous levels and reflecting a strong performance in generating profits relative to shareholders' equity. This substantial increase could indicate effective management strategies or successful operational improvements leading to enhanced profitability. Overall, while Cummins Inc's ROE has varied over the years, the recent high of 38.42% demonstrates a positive growth trajectory in creating value for its shareholders.
Peer comparison
Dec 31, 2024