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Cummins Inc. (NYSE:CMI)

This company has been moved to the archive! The financial data has not been updated since May 2, 2024.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Cummins Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Accounts payable, principally trade 13.31 14.03 12.74 12.46 12.84
Loans payable 0.87 0.69 0.88 0.75 0.51
Commercial paper 4.67 8.50 1.32 1.43 3.34
Current maturities of long-term debt 0.37 1.89 0.25 0.27 0.16
Accrued compensation, benefits and retirement costs 3.46 2.04 2.88 2.14 2.84
Current portion of accrued product warranty 2.08 2.40 3.18 2.98 4.07
Current portion of deferred revenue 3.81 3.31 3.61 3.05 2.70
Agreement in Principle 6.06 0.00 0.00 0.00 0.00
Marketing accruals 1.25 1.04 1.28 1.07 0.89
Other taxes payable 0.92 0.74 0.99 1.13 1.16
Income taxes payable 0.76 0.57 0.45 0.36 0.26
Current portion of operating lease liabilities 0.43 0.44 0.54 0.57 0.66
Other 2.32 2.05 1.76 1.79 2.29
Other accrued expenses 11.73% 4.84% 5.02% 4.92% 5.26%
Current liabilities 40.32% 37.69% 29.88% 28.00% 31.72%
Long-term debt 15.00 14.85 15.09 15.96 7.99
Deferred revenue 3.02 2.79 3.58 3.71 4.16
Accrued product warranty 2.43 2.46 2.88 2.97 3.27
Pensions 1.66 1.47 1.82 1.91 1.95
Deferred income taxes 1.66 2.14 1.70 1.44 1.55
Long-term portion of operating lease liabilities 1.17 1.21 1.37 1.44 1.87
Accrued compensation 0.67 0.61 0.75 0.90 1.04
Other postretirement benefits 0.41 0.47 0.73 0.88 1.04
Mark-to-market valuation on interest rate derivatives 0.37 0.50 0.08 0.18 0.06
Long-term income taxes 0.35 0.63 1.11 1.28 1.48
Other long-term liabilities 2.02 1.44 1.35 1.61 0.97
Other liabilities 10.72% 10.93% 11.79% 12.60% 13.25%
Long-term liabilities 28.74% 28.56% 30.47% 32.27% 25.39%
Total liabilities 69.05% 66.25% 60.35% 60.27% 57.11%
Redeemable noncontrolling interests 0.00 0.85 0.00 0.00 0.00
Common stock, $2.50 par value 8.01 7.40 10.24 10.63 11.89
Retained earnings 55.78 59.53 70.61 68.15 73.04
Treasury stock, at cost -29.24 -31.07 -38.48 -34.38 -36.61
Common stock held by employee benefits trust, at cost 0.00 0.00 0.00 0.00 -0.01
Accumulated other comprehensive loss -6.89 -6.24 -6.63 -8.76 -10.28
Total Cummins Inc. shareholders’ equity 27.65% 29.62% 35.74% 35.63% 38.04%
Noncontrolling interests 3.29 3.27 3.91 4.10 4.85
Total equity 30.95% 32.90% 39.65% 39.73% 42.89%
Total liabilities, redeemable noncontrolling interests and equity 100.00% 100.00% 100.00% 100.00% 100.00%

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).

The capital structure of the organization exhibits a clear shift toward increased leverage over the five-year period ending December 31, 2023. Total liabilities have risen steadily from 57.11% of the total balance sheet in 2019 to 69.05% in 2023. Conversely, total equity has experienced a corresponding contraction, declining from 42.89% to 30.95% over the same timeframe.

Current Liabilities Trend
Current liabilities have grown from 31.72% in 2019 to 40.32% in 2023. This increase is primarily driven by a significant spike in other accrued expenses, which rose from approximately 5% in previous years to 11.73% in 2023. Additionally, a new obligation labeled "Agreement in Principle" appeared in 2023, representing 6.06% of the total capital structure. Commercial paper utilization showed volatility, peaking at 8.50% in 2022 before retreating to 4.67% in 2023.
Long-Term Debt and Liabilities
Long-term liabilities peaked in 2020 at 32.27% before stabilizing around 28.74% by 2023. A notable structural shift occurred between 2019 and 2020, where long-term debt nearly doubled from 7.99% to 15.96%, maintaining a consistent weight of approximately 15% through 2023. Other long-term liabilities have seen a gradual decline from 13.25% to 10.72% over the period.
Equity Composition and Retained Earnings
Total shareholders' equity declined from 38.04% in 2019 to 27.65% in 2023. This reduction is most evident in retained earnings, which dropped from 73.04% of the equity base to 55.78%. The impact of treasury stock remained a substantial negative component of equity, though its relative weight decreased from -36.61% to -29.24%. Accumulated other comprehensive loss has remained negative throughout the period, fluctuating between -6.24% and -10.28%.
Operational Accruals and Obligations
Short-term operational obligations show mixed trends. Accounts payable have remained relatively stable, hovering between 12.46% and 14.03%. However, the current portion of accrued product warranty has trended downward, moving from 4.07% in 2019 to 2.08% in 2023. Deferred revenue has shown a slight increase in its current portion, rising from 2.70% to 3.81%.

Overall, the financial profile indicates a strategic or operational move toward higher debt reliance and a reduction in the proportion of equity financing. The recent surge in current liabilities, particularly accrued expenses and the introduction of new principle agreements, suggests an increase in short-term financial obligations relative to the total asset base.

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