Cummins Inc (CMI)
Debt-to-capital ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 6,651,000 | 7,426,000 | 7,070,000 | 6,491,000 | 6,375,000 | 6,939,000 | 7,280,000 | 7,386,000 | 7,400,000 | 7,635,000 | 4,109,000 | 4,060,000 | 4,461,000 | 4,285,000 | 4,304,000 | 4,338,000 | 4,665,000 | 4,532,000 | 4,241,000 | 3,661,000 |
| Total stockholders’ equity | US$ in thousands | 10,271,000 | 10,315,000 | 9,551,000 | 9,067,000 | 8,850,000 | 10,658,000 | 10,337,000 | 9,623,000 | 8,975,000 | 8,380,000 | 8,738,000 | 8,436,000 | 8,146,000 | 8,082,000 | 7,866,000 | 8,109,000 | 8,062,000 | 7,700,000 | 7,192,000 | 7,068,000 |
| Debt-to-capital ratio | 0.39 | 0.42 | 0.43 | 0.42 | 0.42 | 0.39 | 0.41 | 0.43 | 0.45 | 0.48 | 0.32 | 0.32 | 0.35 | 0.35 | 0.35 | 0.35 | 0.37 | 0.37 | 0.37 | 0.34 |
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 some fluctuations over the period from March 31, 2020, to December 31, 2024. The ratio started at 0.34 as of March 31, 2020, and gradually increased to 0.48 as of September 30, 2022, indicating a higher proportion of debt relative to the total capital employed by the company during that period.
However, from March 31, 2023, onwards, the debt-to-capital ratio began to decline consistently, reaching 0.39 as of December 31, 2024. This downward trend suggests that Cummins Inc has been reducing its reliance on debt financing compared to its total capital base, which can be a positive sign for investors and creditors as it indicates lower financial risk.
Overall, the decreasing trend in the debt-to-capital ratio of Cummins Inc reflects a potentially improving financial position in terms of leverage and capital structure management. Further monitoring of this ratio will be essential to assess the company's debt management and financial health in the future.
Peer comparison
Dec 31, 2024