Cummins Inc (CMI)
Debt-to-capital ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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 |
| Debt-to-capital ratio | 0.39 | 0.42 | 0.45 | 0.35 | 0.37 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $6,651,000K ÷ ($6,651,000K + $10,271,000K)
= 0.39
The debt-to-capital ratio of Cummins Inc has shown a fluctuating trend over the past five years. It stood at 0.37 as of December 31, 2020, decreasing slightly to 0.35 by the end of 2021. Subsequently, there was an increase to 0.45 by December 31, 2022, before declining to 0.42 by December 31, 2023, and further dropping to 0.39 as of December 31, 2024.
Overall, the debt-to-capital ratio indicates the proportion of the company's capital structure funded by debt as opposed to equity. A lower ratio suggests a lower reliance on debt financing, which may signify better financial stability and lower financial risk. However, it is essential to further analyze the company's overall financial health and compare this ratio with industry benchmarks to assess Cummins Inc's leverage position accurately.
Peer comparison
Dec 31, 2024