Income Statement
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Cummins Inc., consolidated income statement
US$ in millions
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 financial data over the five-year period reveals several notable trends and shifts in key performance indicators.
- Net Sales and Cost of Sales
- Net sales increased steadily from $23,571 million in 2019 to $34,065 million in 2023, indicating consistent revenue growth. Correspondingly, the cost of sales rose from $17,591 million to $25,816 million over the same period, reflecting increased production or procurement costs aligned with higher sales volumes.
- Gross Margin
- The gross margin exhibited growth from $5,980 million in 2019 to $8,249 million in 2023, though with some fluctuations, particularly a dip in 2020 to $4,894 million, likely impacted by external factors during that year. The recovery and increase through to 2023 suggest improved operational efficiency or better pricing power.
- Operating Expenses
- Selling, general and administrative expenses showed an upward trend, rising from $2,454 million to $3,333 million, indicating increased overhead costs possibly due to expanded operations or inflationary pressures. Similarly, research, development, and engineering expenses increased steadily from $1,001 million to $1,500 million, reflecting sustained investment in innovation.
- Other Operating Items
- Equity, royalty, and interest income from investees fluctuated, peaking at $506 million in 2021 and decreasing to $483 million in 2023. Restructuring actions appeared only in 2019 at a cost of $119 million, with no further entries in subsequent years, suggesting the completion of associated initiatives. Other operating expenses increased sharply in 2023 to -$2,138 million from -$174 million in 2022, indicating unusual or non-recurring costs adversely affecting operational results.
- Operating Income and Expenses
- Overall operating income and expenses presented increasing net outflows, from -$3,280 million in 2019 to -$6,488 million in 2023. Despite this, operating income marginally decreased from $2,700 million in 2019 to $1,761 million in 2023, with a peak around 2022. The decline in 2023 is notable and may be linked to the sharp rise in other operating expenses and rising interest costs.
- Interest and Other Income
- Interest expense increased significantly from $109 million in 2019 to $375 million in 2023, indicating higher debt levels or increased borrowing costs. Other income net fluctuated around similar levels, showing no significant upward or downward trend.
- Profitability and Taxation
- Income before income taxes followed a trajectory similar to operating income, with an initial decline in 2020, recovery through 2021 and 2022, and a decline in 2023 to $1,626 million. Income tax expense increased steadily but at a slower pace compared to pre-tax income, reaching $786 million in 2023. Consolidated net income reflected these trends, increasing from $2,268 million in 2019 to over $2,100 million in 2021 and 2022 before declining sharply to $840 million in 2023.
- Net Income Attributable to Cummins Inc.
- The portion of net income attributable to the company rose from $2,260 million in 2019 to peaked around $2,150 million in 2022 but fell substantially to $735 million in 2023, representing a significant reduction that may warrant further investigation into underlying causes, including operational or one-time expenses.