Cummins Inc (CMI)
Debt-to-equity 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-equity ratio | 0.65 | 0.72 | 0.82 | 0.55 | 0.58 |
December 31, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $6,651,000K ÷ $10,271,000K
= 0.65
Cummins Inc's debt-to-equity ratio has been showing some fluctuations over the years based on the provided data. The ratio decreased from 0.58 as of December 31, 2020, to 0.55 as of December 31, 2021, which indicates a reduction in the company's reliance on debt to finance its operations compared to equity. However, there was an increase in the ratio to 0.82 as of December 31, 2022, suggesting a higher proportion of debt used in the company's capital structure.
Subsequently, the debt-to-equity ratio decreased to 0.72 as of December 31, 2023, followed by a further decline to 0.65 as of December 31, 2024. These decreases indicate a trend towards a more balanced capital structure, with a decreasing reliance on debt compared to equity over the recent years.
Overall, it is essential for Cummins Inc to closely monitor and manage its debt-to-equity ratio to maintain a healthy financial position and capital structure. Fluctuations in this ratio can indicate changes in the extent of financial leverage and risk within the company.
Peer comparison
Dec 31, 2024