Cummins Inc (CMI)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,750,000 | 1,761,000 | 2,929,000 | 2,706,000 | 2,269,000 |
| Long-term debt | US$ in thousands | 6,651,000 | 6,375,000 | 7,400,000 | 4,461,000 | 4,665,000 |
| Total stockholders’ equity | US$ in thousands | 10,271,000 | 8,850,000 | 8,975,000 | 8,146,000 | 8,062,000 |
| Return on total capital | 22.16% | 11.57% | 17.89% | 21.46% | 17.83% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,750,000K ÷ ($6,651,000K + $10,271,000K)
= 22.16%
Cummins Inc's return on total capital has exhibited fluctuations over the past five years. The return on total capital was 17.83% on December 31, 2020, showing a modest performance. Subsequently, on December 31, 2021, the return improved to 21.46%, indicating enhanced efficiency in generating profits relative to the total capital employed.
In the following year, as of December 31, 2022, the return on total capital slightly decreased to 17.89%, but remained relatively stable. However, there was a notable decline in performance by the end of December 31, 2023, with a return on total capital of 11.57%, which may suggest challenges in capital utilization or profitability during that period.
The most recent data point, as at December 31, 2024, shows a significant increase in the return on total capital to 22.16%, signifying a strong recovery or improved capital efficiency for Cummins Inc. Overall, while there have been fluctuations in performance over the years, the company has shown resilience and the ability to enhance returns on its total capital over time.
Peer comparison
Dec 31, 2024