Stock Analysis on Net
Stock Analysis on Net

Cummins Inc. (NYSE:CMI)

$22.49

This company has been moved to the archive! The financial data has not been updated since May 2, 2024.

Return on Equity (ROE)
since 2005

Microsoft Excel

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Calculation

Cummins Inc., ROE, long-term trends, calculation

Microsoft Excel
ROE = 100 × Net income attributable to Cummins Inc.1 ÷ Total Cummins Inc. shareholders’ equity1
Dec 31, 2023 = 100 × ÷
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Dec 31, 2005 = 100 × ÷

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 key trends in profitability and equity for the period under review.

Net Income
The net income attributable to the company showed a general upward trajectory from 2005 until 2011, increasing from 550 million USD to a peak of 1,848 million USD. Following this period, net income fluctuated with a slight downward trend until 2017, reaching a low of 999 million USD. From 2018 to 2022, net income surged again, hitting a high of 2,151 million USD in 2022, before sharply declining in 2023 to 735 million USD. This volatility suggests variable market or operational challenges affecting profitability in recent years.
Total Shareholders’ Equity
The total shareholders' equity exhibited consistent growth throughout the period, rising from 1,864 million USD in 2005 to a peak of 8,975 million USD in 2022. This steady increase indicates a strong accumulation of retained earnings and/or equity financing, reflecting an expanding asset base and a solid capital structure. The slight decline observed in 2023 to 8,850 million USD suggests a minor contraction or payout but does not substantially detract from the overall growth trend.
Return on Equity (ROE)
ROE showed considerable fluctuations. It started at 29.51% in 2005, decreasing gradually to 11.34% in 2009, likely influenced by the global economic downturn during that period. Subsequently, ROE improved markedly, reaching a peak of 33.65% in 2011, before entering a period of variability between approximately 13.76% and 30.11% through 2019. After 2019, a declining trend is observed, with ROE dropping to 8.31% by 2023. This downward shift may relate to the sharp decline in net income noted in 2023, despite the larger equity base, implying reduced efficiency in generating profits from shareholders’ investments.

In summary, the company demonstrated robust growth in equity and fluctuating but generally strong profitability over the years. However, recent declines in both net income and ROE in 2023 may highlight emerging challenges in operational performance or market conditions, warranting closer examination.

Comparison to Competitors

Cummins Inc., ROE, long-term trends, comparison to competitors

Microsoft Excel
Cummins Inc. Boeing Co. Caterpillar Inc. Eaton Corp. plc GE Aerospace Honeywell International Inc. Lockheed Martin Corp. RTX Corp.
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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., ROE, long-term trends, comparison to sector (capital goods)

Microsoft Excel
Cummins Inc. Capital Goods
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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., ROE, long-term trends, comparison to industry (industrials)

Microsoft Excel
Cummins Inc. Industrials
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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).