Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Cummins Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
| Long-term activity ratio | Description | The company |
|---|---|---|
| Net fixed asset turnover | An activity ratio calculated as total revenue divided by net fixed assets. | Cummins Inc. net fixed asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
| Net fixed asset turnover (including operating lease, right-of-use asset) | An activity ratio calculated as total revenue divided by net fixed assets (including operating lease, right-of-use asset). | Cummins Inc. net fixed asset turnover ratio (with operating lease, right-of-use asset) deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
| Total asset turnover | An activity ratio calculated as total revenue divided by total assets. | Cummins Inc. total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
| Equity turnover | An activity ratio calculated as total revenue divided by shareholders’ equity. | Cummins Inc. equity turnover ratio improved from 2021 to 2022 and from 2022 to 2023. |
Net Fixed Asset Turnover
Cummins Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 34,065) | 28,074) | 24,021) | 19,811) | 23,571) | |
| Property, plant and equipment, net | 6,249) | 5,521) | 4,422) | 4,255) | 4,245) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 5.45 | 5.08 | 5.43 | 4.66 | 5.55 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 7.30 | 6.31 | 5.70 | 4.92 | 6.12 | |
| Caterpillar Inc. | 5.04 | 4.70 | 3.99 | 3.15 | 3.93 | |
| Eaton Corp. plc | 6.57 | 6.59 | 6.41 | 6.02 | 6.12 | |
| General Electric Co. | 6.06 | 5.96 | 5.47 | 1.75 | 2.02 | |
| Honeywell International Inc. | 6.48 | 6.48 | 6.18 | 5.86 | 6.89 | |
| Lockheed Martin Corp. | 8.07 | 8.27 | 8.83 | 9.07 | 9.07 | |
| RTX Corp. | 4.38 | 4.42 | 4.30 | 3.78 | 6.04 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Capital Goods | 5.94 | 5.74 | 5.46 | 3.59 | 4.29 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | 3.22 | 3.27 | 3.10 | 2.46 | 2.82 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 34,065 ÷ 6,249 = 5.45
2 Click competitor name to see calculations.
| Long-term activity ratio | Description | The company |
|---|---|---|
| Net fixed asset turnover | An activity ratio calculated as total revenue divided by net fixed assets. | Cummins Inc. net fixed asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Cummins Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 34,065) | 28,074) | 24,021) | 19,811) | 23,571) | |
| Property, plant and equipment, net | 6,249) | 5,521) | 4,422) | 4,255) | 4,245) | |
| Operating lease assets | 501) | 492) | 444) | 438) | 496) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 6,750) | 6,013) | 4,866) | 4,693) | 4,741) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 5.05 | 4.67 | 4.94 | 4.22 | 4.97 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | 6.30 | 5.55 | 5.04 | 4.45 | 5.59 | |
| Caterpillar Inc. | 4.83 | 4.49 | 3.79 | 3.00 | 3.75 | |
| Eaton Corp. plc | 5.55 | 5.58 | 5.60 | 5.26 | 5.44 | |
| General Electric Co. | 5.17 | 5.08 | 4.55 | 1.63 | 1.89 | |
| Honeywell International Inc. | 5.50 | 5.58 | 5.28 | 5.15 | 6.12 | |
| Lockheed Martin Corp. | 7.14 | 7.27 | 7.54 | 7.96 | 7.88 | |
| RTX Corp. | 3.96 | 3.95 | 3.80 | 3.36 | 5.02 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Capital Goods | 5.29 | 5.10 | 4.80 | 3.29 | 3.90 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | 2.78 | 2.82 | 2.67 | 2.17 | 2.62 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 34,065 ÷ 6,750 = 5.05
2 Click competitor name to see calculations.
| Long-term activity ratio | Description | The company |
|---|---|---|
| Net fixed asset turnover (including operating lease, right-of-use asset) | An activity ratio calculated as total revenue divided by net fixed assets (including operating lease, right-of-use asset). | Cummins Inc. net fixed asset turnover ratio (with operating lease, right-of-use asset) deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
Total Asset Turnover
Cummins Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 34,065) | 28,074) | 24,021) | 19,811) | 23,571) | |
| Total assets | 32,005) | 30,299) | 23,710) | 22,624) | 19,737) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.06 | 0.93 | 1.01 | 0.88 | 1.19 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 0.57 | 0.49 | 0.45 | 0.38 | 0.57 | |
| Caterpillar Inc. | 0.73 | 0.69 | 0.58 | 0.50 | 0.65 | |
| Eaton Corp. plc | 0.60 | 0.59 | 0.58 | 0.56 | 0.65 | |
| General Electric Co. | 0.40 | 0.39 | 0.36 | 0.29 | 0.33 | |
| Honeywell International Inc. | 0.60 | 0.57 | 0.53 | 0.51 | 0.63 | |
| Lockheed Martin Corp. | 1.29 | 1.25 | 1.32 | 1.29 | 1.26 | |
| RTX Corp. | 0.43 | 0.42 | 0.40 | 0.35 | 0.55 | |
| Total Asset Turnover, Sector | ||||||
| Capital Goods | 0.60 | 0.56 | 0.52 | 0.44 | 0.56 | |
| Total Asset Turnover, Industry | ||||||
| Industrials | 0.68 | 0.66 | 0.61 | 0.52 | 0.62 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Total asset turnover = Net sales ÷ Total assets
= 34,065 ÷ 32,005 = 1.06
2 Click competitor name to see calculations.
| Long-term activity ratio | Description | The company |
|---|---|---|
| Total asset turnover | An activity ratio calculated as total revenue divided by total assets. | Cummins Inc. total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
Equity Turnover
Cummins Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 34,065) | 28,074) | 24,021) | 19,811) | 23,571) | |
| Total Cummins Inc. shareholders’ equity | 8,850) | 8,975) | 8,474) | 8,062) | 7,507) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 3.85 | 3.13 | 2.83 | 2.46 | 3.14 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 3.28 | 3.57 | 2.92 | 2.55 | 3.48 | |
| Eaton Corp. plc | 1.22 | 1.22 | 1.20 | 1.20 | 1.33 | |
| General Electric Co. | 2.36 | 2.02 | 1.76 | 2.05 | 3.09 | |
| Honeywell International Inc. | 2.31 | 2.12 | 1.85 | 1.86 | 1.98 | |
| Lockheed Martin Corp. | 9.89 | 7.12 | 6.12 | 10.87 | 19.13 | |
| RTX Corp. | 1.15 | 0.92 | 0.88 | 0.78 | 1.84 | |
| Equity Turnover, Sector | ||||||
| Capital Goods | 3.12 | 2.57 | 2.31 | 2.40 | 3.57 | |
| Equity Turnover, Industry | ||||||
| Industrials | 3.24 | 2.95 | 2.59 | 2.74 | 3.51 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Equity turnover = Net sales ÷ Total Cummins Inc. shareholders’ equity
= 34,065 ÷ 8,850 = 3.85
2 Click competitor name to see calculations.
| Long-term activity ratio | Description | The company |
|---|---|---|
| Equity turnover | An activity ratio calculated as total revenue divided by shareholders’ equity. | Cummins Inc. equity turnover ratio improved from 2021 to 2022 and from 2022 to 2023. |