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 analysis of the financial data reveals several notable trends in the company's capital structure over the examined period.
- Total Debt
- The total debt fluctuated moderately from 2005 through 2012, maintaining values mostly below US$1 billion. There was a sharp increase in 2013, nearly doubling compared to the previous year, followed by a gradual decline through 2015. From 2016 onward, the debt level experienced significant growth, peaking dramatically in 2020 at over US$4 billion, and reaching the highest value in 2022 at US$7.855 billion, before slightly decreasing in 2023.
- Total Shareholders’ Equity
- Shareholders’ equity consistently increased from 2005 to 2014, rising from approximately US$1.9 billion to nearly US$7.7 billion. After a minor decline between 2014 and 2016, equity stabilized and again showed a steady upward trend until 2022, reaching around US$9 billion. The value slightly decreased in 2023 but remained close to the peak levels.
- Debt to Equity Ratio
- This ratio exemplifies the relationship between the debt and the equity over time. Starting at 0.73 in 2005, the ratio decreased significantly to a low of 0.12 in 2012, indicating a conservative capital structure with relatively low leverage during this period. However, from 2013, the ratio rose progressively, reaching 0.88 in 2022, the highest in the timeline, implying increased reliance on debt financing. The ratio slightly improved in 2023 to 0.76 but still reflects elevated leverage compared to the earlier years.
In summary, the company maintained a relatively low debt position with strong equity growth through the early years, reflecting a solid financial base. In the last decade, there has been a marked increase in debt levels and leverage ratios, indicating a strategic shift towards higher debt financing. Despite this, shareholders' equity also grew, suggesting ongoing accumulation of capital. The observed upticks in debt and leverage ratios coupled with sustained equity growth warrant attention to the company's debt management and capital strategy going forward.
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).