Debt to Equity
since 2005
Calculation
Cummins Inc., debt to equity, long-term trends, calculation
| Debt to equity | = | Total debt1 | ÷ | Total Cummins Inc. shareholders’ equity1 | |
|---|---|---|---|---|---|
| Dec 31, 2023 | 0.76 | = | 6,696) | ÷ | 8,850) |
| Dec 31, 2022 | 0.88 | = | 7,855) | ÷ | 8,975) |
| Dec 31, 2021 | 0.49 | = | 4,159) | ÷ | 8,474) |
| Dec 31, 2020 | 0.52 | = | 4,164) | ÷ | 8,062) |
| Dec 31, 2019 | 0.32 | = | 2,367) | ÷ | 7,507) |
| Dec 31, 2018 | 0.34 | = | 2,476) | ÷ | 7,348) |
| Dec 31, 2017 | 0.28 | = | 2,006) | ÷ | 7,259) |
| Dec 31, 2016 | 0.27 | = | 1,856) | ÷ | 6,875) |
| Dec 31, 2015 | 0.22 | = | 1,639) | ÷ | 7,406) |
| Dec 31, 2014 | 0.22 | = | 1,698) | ÷ | 7,749) |
| Dec 31, 2013 | 0.23 | = | 1,740) | ÷ | 7,510) |
| Dec 31, 2012 | 0.12 | = | 775) | ÷ | 6,603) |
| Dec 31, 2011 | 0.14 | = | 783) | ÷ | 5,492) |
| Dec 31, 2010 | 0.18 | = | 843) | ÷ | 4,670) |
| Dec 31, 2009 | 0.19 | = | 704) | ÷ | 3,773) |
| Dec 31, 2008 | 0.22 | = | 698) | ÷ | 3,230) |
| Dec 31, 2007 | 0.20 | = | 674) | ÷ | 3,409) |
| Dec 31, 2006 | 0.29 | = | 811) | ÷ | 2,802) |
| Dec 31, 2005 | 0.73 | = | 1,367) | ÷ | 1,864) |
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), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The long-term financial trajectory of Cummins Inc. exhibits three distinct phases of capital structure management: a period of aggressive deleveraging, a phase of relative stability, and a recent period of significant debt expansion. While shareholders' equity has grown consistently over nearly two decades, the debt-to-equity ratio has fluctuated based on shifting financing strategies and capital requirements.
- Total Debt Trends
- A substantial reduction in total debt occurred between 2005 and 2007, falling from 1,367 million US$ to 674 million US$. Debt levels remained relatively stable and low through 2012. A structural shift began in 2013 with a jump to 1,740 million US$, followed by a gradual increase through 2019. The most aggressive expansion in borrowing occurred between 2020 and 2022, where total debt peaked at 7,855 million US$ before decreasing to 6,696 million US$ in 2023.
- Shareholders' Equity Growth
- Total shareholders' equity demonstrated a strong and consistent upward trend for the majority of the period. Starting at 1,864 million US$ in 2005, equity expanded to reach 8,975 million US$ by 2022. This growth represents a nearly five-fold increase in the company's equity base, providing a significant buffer that mitigated the impact of increasing debt levels for several years.
- Debt-to-Equity Ratio Analysis
- The debt-to-equity ratio reflects the interplay between the rising equity base and the fluctuating debt levels. The ratio declined sharply from 0.73 in 2005 to a historical low of 0.12 in 2012, indicating a highly conservative capital structure. Between 2013 and 2019, the ratio stabilized in a moderate range between 0.22 and 0.34. However, a steep increase is observed starting in 2020, with the ratio rising to 0.52 and eventually peaking at 0.88 in 2022. The 2023 ratio of 0.76 suggests a slight reduction in leverage, though it remains significantly higher than the levels maintained between 2006 and 2019.
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Comparison to Competitors
Cummins Inc., debt to equity, long-term trends, comparison to competitors
| Cummins Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | 0.76 | — | 1.94 | 0.49 | 0.77 | 1.29 | 2.55 | 0.73 |
| Dec 31, 2022 | 0.88 | — | 2.33 | 0.51 | 0.89 | 1.17 | 1.68 | 0.44 |
| Dec 31, 2021 | 0.49 | — | 2.29 | 0.52 | 0.87 | 1.06 | 1.07 | 0.43 |
| Dec 31, 2020 | 0.52 | — | 2.42 | 0.54 | 2.11 | 1.28 | 2.02 | 0.44 |
| Dec 31, 2019 | 0.32 | — | 2.58 | 0.52 | 3.21 | 0.87 | 4.05 | 1.04 |
| Dec 31, 2018 | 0.34 | 40.85 | 2.60 | 0.47 | 3.55 | 0.89 | 9.04 | 1.18 |
| Dec 31, 2017 | 0.28 | 31.32 | 2.55 | 0.45 | 2.09 | 1.04 | — | 0.93 |
| Dec 31, 2016 | 0.27 | 12.18 | 2.80 | 0.56 | 1.80 | 0.81 | 9.45 | 0.87 |
| Dec 31, 2015 | 0.22 | 1.57 | 2.57 | 0.56 | 2.02 | 0.66 | 4.62 | 0.75 |
| Dec 31, 2014 | 0.22 | 1.05 | 2.35 | 0.57 | 2.85 | 0.49 | 1.81 | 0.63 |
| Dec 31, 2013 | 0.23 | 0.65 | 1.81 | 0.57 | 2.93 | 0.51 | 1.25 | 0.64 |
| Dec 31, 2012 | 0.12 | 1.77 | 2.29 | 0.72 | 3.37 | 0.58 | 157.90 | 0.90 |
| Dec 31, 2011 | 0.14 | 3.52 | 2.69 | 0.51 | 3.89 | 0.70 | 6.45 | 0.47 |
| Dec 31, 2010 | 0.18 | 4.49 | 2.63 | 0.47 | 4.02 | 0.62 | 1.35 | 0.48 |
| Dec 31, 2009 | 0.19 | 6.07 | 3.62 | 0.51 | 4.35 | 0.86 | 1.22 | 0.49 |
| Dec 31, 2008 | 0.22 | — | 5.84 | 0.68 | 5.00 | 1.17 | 1.24 | 0.72 |
| Dec 31, 2007 | 0.20 | 0.91 | 3.20 | 0.66 | 4.45 | 0.83 | 0.44 | 0.43 |
| Dec 31, 2006 | 0.29 | 2.01 | 3.98 | 0.63 | 3.85 | 0.52 | 0.64 | 0.46 |
| Dec 31, 2005 | 0.73 | 0.97 | 3.05 | 0.65 | 3.39 | 0.45 | 0.61 | 0.48 |
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), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Cummins Inc., debt to equity, long-term trends, comparison to sector (capital goods)
| Cummins Inc. | Capital Goods | |
|---|---|---|
| Dec 31, 2023 | 0.76 | 1.54 |
| Dec 31, 2022 | 0.88 | 1.33 |
| Dec 31, 2021 | 0.49 | 1.26 |
| Dec 31, 2020 | 0.52 | 1.75 |
| Dec 31, 2019 | 0.32 | 2.08 |
| Dec 31, 2018 | 0.34 | 2.03 |
| Dec 31, 2017 | 0.28 | 1.74 |
| Dec 31, 2016 | 0.27 | 1.60 |
| Dec 31, 2015 | 0.22 | 1.64 |
| Dec 31, 2014 | 0.22 | 2.06 |
| Dec 31, 2013 | 0.23 | 2.00 |
| Dec 31, 2012 | 0.12 | 2.56 |
| Dec 31, 2011 | 0.14 | 3.04 |
| Dec 31, 2010 | 0.18 | 3.10 |
| Dec 31, 2009 | 0.19 | 3.46 |
| Dec 31, 2008 | 0.22 | 4.19 |
| Dec 31, 2007 | 0.20 | 3.21 |
| Dec 31, 2006 | 0.29 | 3.02 |
| Dec 31, 2005 | 0.73 | 2.53 |
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), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Cummins Inc., debt to equity, long-term trends, comparison to industry (industrials)
| Cummins Inc. | Industrials | |
|---|---|---|
| Dec 31, 2023 | 0.76 | 1.52 |
| Dec 31, 2022 | 0.88 | 1.42 |
| Dec 31, 2021 | 0.49 | 1.37 |
| Dec 31, 2020 | 0.52 | 1.82 |
| Dec 31, 2019 | 0.32 | 1.82 |
| Dec 31, 2018 | 0.34 | 1.85 |
| Dec 31, 2017 | 0.28 | 1.65 |
| Dec 31, 2016 | 0.27 | 1.54 |
| Dec 31, 2015 | 0.22 | 1.51 |
| Dec 31, 2014 | 0.22 | 1.89 |
| Dec 31, 2013 | 0.23 | 1.79 |
| Dec 31, 2012 | 0.12 | 2.29 |
| Dec 31, 2011 | 0.14 | 2.60 |
| Dec 31, 2010 | 0.18 | 2.68 |
| Dec 31, 2009 | 0.19 | 3.01 |
| Dec 31, 2008 | 0.22 | 3.54 |
| Dec 31, 2007 | 0.20 | 2.73 |
| Dec 31, 2006 | 0.29 | 2.49 |
| Dec 31, 2005 | 0.73 | 2.42 |
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), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).