Cash Flow Statement
The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.
The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.
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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 cash flow 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).
- Net Income
- Consolidated net income exhibited a declining trend from 2019 through 2023, dropping sharply from 2,268 million USD in 2019 to 840 million USD in 2023. The year 2023 reflects a significant decrease compared to prior years, indicating potential profitability challenges or unusual expense impacts.
- Depreciation and Amortization
- This expense gradually increased over the period, rising from 672 million USD in 2019 to 1,024 million USD in 2023, suggesting growing investment in fixed assets or higher amortization of intangible assets.
- Deferred Income Taxes
- Values fluctuated initially but moved into negative territory in 2022 and 2023, with a steep decline to -457 million USD in 2023. This may indicate timing differences in tax payments or adjustments due to tax law changes.
- Equity in Income of Investees
- Results were volatile, showing losses in most years except for a positive 64 million USD in 2022. The negative figure of -81 million USD in 2023 points to reduced profitability or losses from associated companies.
- Pension and OPEB Expenses and Contributions
- Pension and OPEB expenses decreased substantially from 75 million USD in 2019 to 8 million USD in 2023. Contributions and payments also declined but rose again to -134 million USD in 2023, indicating fluctuating pension-related cash flows.
- Special Costs
- A notable one-time charge is visible in 2022 as 111 million USD related to Russian suspension costs, which is absent in other years.
- Working Capital and Current Assets/Liabilities
- There are notable fluctuations in accounts and notes receivable, inventory, accounts payable, and accrued expenses. Specifically, accounts receivable showed negative values in 2020-2023, suggesting a reduction or write-offs. Inventories saw negative adjustments in 2021 and 2022 but data for 2023 is missing. Accounts payable increased dramatically in 2022, followed by a negative adjustment in 2023. Accrued expenses spiked up substantially to 2,934 million USD in 2023. Overall, changes in current assets and liabilities exhibited a negative pattern until 2022 but reversed dramatically to 2,418 million USD in 2023, implying strong working capital management affecting cash flow positively in that year.
- Operating Cash Flow and Adjustments
- Net cash provided by operating activities decreased from 3,181 million USD in 2019 to a low of 1,962 million USD in 2022 but surged to 3,966 million USD in 2023. Adjustments to reconcile net income to operating cash flow showed a large positive swing from -221 million USD in 2022 to 3,126 million USD in 2023, reflecting significant non-cash or accrual adjustments impacting cash flow.
- Investing Activities
- Capital expenditures increased steadily from -700 million USD in 2019 to -1,213 million USD in 2023, demonstrating higher investment in long-term assets. Acquisitions peaked heavily in 2022 at -3,191 million USD but were lower in 2023. Investments in marketable securities acquisitions increased annually, reaching -1,409 million USD, while liquidations also increased substantially, with a net effect not clearly favorable. Overall, net cash used in investing activities spiked in 2022 due to acquisitions but decreased in 2023 to -1,643 million USD, indicating reduced investing outflows.
- Financing Activities
- Financing cash flows exhibited high volatility. Proceeds from borrowings increased in 2020 and 2022, then decreased in 2023. Net borrowings of commercial paper varied widely, shifting from negative in 2019 to large positive inflows in 2022 before a reversal in 2023. Payments on borrowings surged in 2022 and 2023, reflecting debt repayments. Dividend payments steadily increased from 761 million USD in 2019 to 921 million USD in 2023. Share repurchases decreased dramatically after 2021, with no repurchases in 2023. The net cash used in financing activities swung from negative -2,095 million USD in 2019 to a positive 1,669 million USD in 2022, then reverted to a usage of -2,177 million USD in 2023, showing fluctuating capital structure and shareholder return policies.
- Effect of Exchange Rate Changes
- Exchange rate impacts were generally negative or minimal, with a notable negative effect of -68 million USD in 2023, indicating currency headwinds for cash balances.
- Cash Balances
- Cash and cash equivalents at year-end fluctuated significantly, rising from 1,129 million USD in 2019 to a high of 3,401 million USD in 2020, then declining steadily to 2,179 million USD in 2023. The net increase/decrease in cash reflected these movements, with a large positive increase in 2020, declined in subsequent years, and slight growth in 2023.