Return on Assets (ROA)
since 2005
Calculation
Cummins Inc., ROA, long-term trends, calculation
| ROA | = | 100 | × | Net income attributable to Cummins Inc.1 | ÷ | Total assets1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | 2.30% | = | 100 | × | 735) | ÷ | 32,005) |
| Dec 31, 2022 | 7.10% | = | 100 | × | 2,151) | ÷ | 30,299) |
| Dec 31, 2021 | 8.99% | = | 100 | × | 2,131) | ÷ | 23,710) |
| Dec 31, 2020 | 7.91% | = | 100 | × | 1,789) | ÷ | 22,624) |
| Dec 31, 2019 | 11.45% | = | 100 | × | 2,260) | ÷ | 19,737) |
| Dec 31, 2018 | 11.23% | = | 100 | × | 2,141) | ÷ | 19,062) |
| Dec 31, 2017 | 5.53% | = | 100 | × | 999) | ÷ | 18,075) |
| Dec 31, 2016 | 9.29% | = | 100 | × | 1,394) | ÷ | 15,011) |
| Dec 31, 2015 | 9.24% | = | 100 | × | 1,399) | ÷ | 15,134) |
| Dec 31, 2014 | 10.47% | = | 100 | × | 1,651) | ÷ | 15,776) |
| Dec 31, 2013 | 10.07% | = | 100 | × | 1,483) | ÷ | 14,728) |
| Dec 31, 2012 | 13.11% | = | 100 | × | 1,645) | ÷ | 12,548) |
| Dec 31, 2011 | 15.84% | = | 100 | × | 1,848) | ÷ | 11,668) |
| Dec 31, 2010 | 10.00% | = | 100 | × | 1,040) | ÷ | 10,402) |
| Dec 31, 2009 | 4.85% | = | 100 | × | 428) | ÷ | 8,816) |
| Dec 31, 2008 | 8.86% | = | 100 | × | 755) | ÷ | 8,519) |
| Dec 31, 2007 | 9.02% | = | 100 | × | 739) | ÷ | 8,195) |
| Dec 31, 2006 | 9.58% | = | 100 | × | 715) | ÷ | 7,465) |
| Dec 31, 2005 | 7.99% | = | 100 | × | 550) | ÷ | 6,885) |
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 financial performance from 2005 to 2023 is characterized by a consistent expansion of the asset base contrasted with fluctuating profitability, leading to significant volatility in the Return on Assets (ROA).
- Asset Base Expansion
- A steady and aggressive increase in total assets is observed, growing from 6,885 million USD in 2005 to 32,005 million USD by 2023. This represents a nearly fivefold increase in the company's resource base over the period, indicating sustained capital investment and balance sheet growth.
- Profitability and ROA Volatility
- Net income exhibits a cyclical pattern, with notable peaks and troughs that directly impact ROA. A significant contraction occurred in 2009, where ROA dropped to 4.85% following a decrease in net income to 428 million USD. This was followed by a period of strong recovery, peaking in 2011 with an ROA of 15.84%, the highest recorded value in the series, driven by a surge in net income to 1,848 million USD.
- Mid-Term Stability and Corrections
- Between 2012 and 2016, ROA remained relatively stable, generally fluctuating between 9% and 13%. A sharp decline to 5.53% occurred in 2017, coinciding with a drop in net income to 999 million USD. However, efficiency recovered quickly in 2018 and 2019, with ROA returning to the 11% range as net income surpassed 2.1 billion USD.
- Recent Performance Trends
- The period from 2020 to 2023 shows a downward trajectory in asset efficiency. Despite total assets reaching their historical maximum of 32,005 million USD in 2023, net income fell sharply to 735 million USD. This divergence resulted in the lowest ROA of the entire period, ending at 2.30% in 2023, suggesting a significant decoupling between asset growth and earnings generation in the most recent fiscal year.
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Comparison to Competitors
Cummins Inc., ROA, 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 | 2.30% | -1.62% | 11.81% | 8.37% | 5.81% | 9.20% | 13.19% | 1.97% |
| Dec 31, 2022 | 7.10% | -3.60% | 8.18% | 7.03% | 0.12% | 7.97% | 10.84% | 3.27% |
| Dec 31, 2021 | 8.99% | -3.03% | 7.84% | 6.30% | -3.28% | 8.60% | 12.41% | 2.39% |
| Dec 31, 2020 | 7.91% | -7.80% | 3.83% | 4.43% | 2.25% | 7.40% | 13.47% | -2.17% |
| Dec 31, 2019 | 11.45% | -0.48% | 7.77% | 6.74% | -1.87% | 10.47% | 13.11% | 3.96% |
| Dec 31, 2018 | 11.23% | 8.91% | 7.83% | 6.90% | -7.23% | 11.71% | 11.24% | 3.93% |
| Dec 31, 2017 | 5.53% | 8.88% | 0.98% | 9.15% | -1.53% | 2.79% | 4.30% | 4.70% |
| Dec 31, 2016 | 9.29% | 5.44% | -0.09% | 6.32% | 2.42% | 8.88% | 11.09% | 5.64% |
| Dec 31, 2015 | 9.24% | 5.48% | 2.68% | 6.38% | -1.24% | 9.67% | 7.34% | 8.70% |
| Dec 31, 2014 | 10.47% | 5.49% | 4.36% | 5.35% | 2.35% | 9.33% | 9.75% | 6.81% |
| Dec 31, 2013 | 10.07% | 4.95% | 4.46% | 5.24% | 1.99% | 8.64% | 8.24% | 6.31% |
| Dec 31, 2012 | 13.11% | 4.39% | 6.36% | 3.39% | 1.99% | 6.99% | 7.10% | 5.74% |
| Dec 31, 2011 | 15.84% | 5.02% | 6.05% | 7.55% | 1.97% | 5.19% | 7.00% | 8.10% |
| Dec 31, 2010 | 10.00% | 4.82% | 4.22% | 5.38% | 1.55% | 5.34% | 8.34% | 7.48% |
| Dec 31, 2009 | 4.85% | 2.11% | 1.49% | 2.35% | 1.41% | 5.98% | 8.61% | 6.87% |
| Dec 31, 2008 | 8.86% | 4.97% | 5.25% | 6.35% | 2.18% | 7.87% | 9.62% | 8.30% |
| Dec 31, 2007 | 9.02% | 6.91% | 6.31% | 7.40% | 2.79% | 7.23% | 10.49% | 7.74% |
| Dec 31, 2006 | 9.58% | 4.28% | 6.95% | 8.32% | 2.99% | 6.73% | 8.96% | 7.92% |
| Dec 31, 2005 | 7.99% | 4.28% | 6.06% | 7.88% | 2.43% | 5.12% | 6.58% | 6.68% |
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., ROA, long-term trends, comparison to sector (capital goods)
| Cummins Inc. | Capital Goods | |
|---|---|---|
| Dec 31, 2023 | 2.30% | 5.21% |
| Dec 31, 2022 | 7.10% | 2.84% |
| Dec 31, 2021 | 8.99% | 1.86% |
| Dec 31, 2020 | 7.91% | 0.80% |
| Dec 31, 2019 | 11.45% | 2.72% |
| Dec 31, 2018 | 11.23% | 1.74% |
| Dec 31, 2017 | 5.53% | 1.83% |
| Dec 31, 2016 | 9.29% | 4.09% |
| Dec 31, 2015 | 9.24% | 2.17% |
| Dec 31, 2014 | 10.47% | 3.87% |
| Dec 31, 2013 | 10.07% | 3.45% |
| Dec 31, 2012 | 13.11% | 3.30% |
| Dec 31, 2011 | 15.84% | 3.30% |
| Dec 31, 2010 | 10.00% | 2.70% |
| Dec 31, 2009 | 4.85% | 2.16% |
| Dec 31, 2008 | 8.86% | 3.33% |
| Dec 31, 2007 | 9.02% | 3.89% |
| Dec 31, 2006 | 9.58% | 3.91% |
| Dec 31, 2005 | 7.99% | 3.25% |
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., ROA, long-term trends, comparison to industry (industrials)
| Cummins Inc. | Industrials | |
|---|---|---|
| Dec 31, 2023 | 2.30% | 5.61% |
| Dec 31, 2022 | 7.10% | 3.31% |
| Dec 31, 2021 | 8.99% | 3.40% |
| Dec 31, 2020 | 7.91% | 0.04% |
| Dec 31, 2019 | 11.45% | 2.56% |
| Dec 31, 2018 | 11.23% | 3.16% |
| Dec 31, 2017 | 5.53% | 3.59% |
| Dec 31, 2016 | 9.29% | 4.55% |
| Dec 31, 2015 | 9.24% | 3.52% |
| Dec 31, 2014 | 10.47% | 4.31% |
| Dec 31, 2013 | 10.07% | 3.91% |
| Dec 31, 2012 | 13.11% | 3.38% |
| Dec 31, 2011 | 15.84% | 3.69% |
| Dec 31, 2010 | 10.00% | 3.03% |
| Dec 31, 2009 | 4.85% | 2.24% |
| Dec 31, 2008 | 8.86% | 3.10% |
| Dec 31, 2007 | 9.02% | 3.87% |
| Dec 31, 2006 | 9.58% | 6.41% |
| Dec 31, 2005 | 7.99% | 1.42% |
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).