Stock Analysis on Net
Stock Analysis on Net

Cummins Inc. (NYSE:CMI)

Adjusted Financial Ratios

Microsoft Excel

Adjusted Financial Ratios (Summary)

Cummins Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Activity Ratio
Total Asset Turnover
Reported 1.06 0.93 1.01 0.88 1.19
Adjusted 1.10 0.94 1.03 0.90 1.22
Liquidity Ratio
Current Ratio
Reported 1.18 1.27 1.74 1.88 1.50
Adjusted 1.41 1.52 2.29 2.43 1.94
Solvency Ratios
Debt to Equity
Reported 0.76 0.88 0.49 0.52 0.32
Adjusted 0.54 0.60 0.36 0.39 0.25
Debt to Capital
Reported 0.43 0.47 0.33 0.34 0.24
Adjusted 0.35 0.38 0.27 0.28 0.20
Financial Leverage
Reported 3.62 3.38 2.80 2.81 2.63
Adjusted 2.35 2.16 1.84 1.88 1.72
Profitability Ratios
Net Profit Margin
Reported 2.16% 7.66% 8.87% 9.03% 9.59%
Adjusted 1.10% 6.30% 11.94% 9.77% 9.59%
Return on Equity (ROE)
Reported 8.31% 23.97% 25.15% 22.19% 30.11%
Adjusted 2.85% 12.80% 22.66% 16.43% 20.21%
Return on Assets (ROA)
Reported 2.30% 7.10% 8.99% 7.91% 11.45%
Adjusted 1.21% 5.92% 12.29% 8.75% 11.72%

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).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Cummins Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Cummins Inc. adjusted current ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity. Cummins Inc. adjusted debt-to-equity ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. Cummins Inc. adjusted debt-to-capital ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Cummins Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Cummins Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity. Cummins Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Cummins Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Cummins Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Net sales 34,065 28,074 24,021 19,811 23,571
Total assets 32,005 30,299 23,710 22,624 19,737
Activity Ratio
Total asset turnover1 1.06 0.93 1.01 0.88 1.19
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net sales2 34,403 28,217 24,195 19,988 23,769
Adjusted total assets3 31,247 29,992 23,507 22,321 19,438
Activity Ratio
Adjusted total asset turnover4 1.10 0.94 1.03 0.90 1.22

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).

1 2023 Calculation
Total asset turnover = Net sales ÷ Total assets
= 34,065 ÷ 32,005 = 1.06

2 Adjusted net sales. See details »

3 Adjusted total assets. See details »

4 2023 Calculation
Adjusted total asset turnover = Adjusted net sales ÷ Adjusted total assets
= 34,403 ÷ 31,247 = 1.10

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Cummins Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Current Ratio

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Current assets 15,198 14,451 12,309 11,897 9,387
Current liabilities 12,903 11,421 7,084 6,335 6,260
Liquidity Ratio
Current ratio1 1.18 1.27 1.74 1.88 1.50
Adjusted
Selected Financial Data (US$ in millions)
Adjusted current assets2 15,522 14,769 12,534 12,073 9,529
Adjusted current liabilities3 11,016 9,691 5,474 4,970 4,924
Liquidity Ratio
Adjusted current ratio4 1.41 1.52 2.29 2.43 1.94

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).

1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 15,198 ÷ 12,903 = 1.18

2 Adjusted current assets. See details »

3 Adjusted current liabilities. See details »

4 2023 Calculation
Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 15,522 ÷ 11,016 = 1.41

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Cummins Inc. adjusted current ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Total debt 6,696 7,855 4,159 4,164 2,367
Total Cummins Inc. shareholders’ equity 8,850 8,975 8,474 8,062 7,507
Solvency Ratio
Debt to equity1 0.76 0.88 0.49 0.52 0.32
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total debt2 7,208 8,355 4,613 4,617 2,868
Adjusted total equity3 13,306 13,885 12,745 11,888 11,274
Solvency Ratio
Adjusted debt to equity4 0.54 0.60 0.36 0.39 0.25

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).

1 2023 Calculation
Debt to equity = Total debt ÷ Total Cummins Inc. shareholders’ equity
= 6,696 ÷ 8,850 = 0.76

2 Adjusted total debt. See details »

3 Adjusted total equity. See details »

4 2023 Calculation
Adjusted debt to equity = Adjusted total debt ÷ Adjusted total equity
= 7,208 ÷ 13,306 = 0.54

Solvency ratio Description The company
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity. Cummins Inc. adjusted debt-to-equity ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Adjusted Debt to Capital

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Total debt 6,696 7,855 4,159 4,164 2,367
Total capital 15,546 16,830 12,633 12,226 9,874
Solvency Ratio
Debt to capital1 0.43 0.47 0.33 0.34 0.24
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total debt2 7,208 8,355 4,613 4,617 2,868
Adjusted total capital3 20,514 22,240 17,358 16,505 14,142
Solvency Ratio
Adjusted debt to capital4 0.35 0.38 0.27 0.28 0.20

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).

1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 6,696 ÷ 15,546 = 0.43

2 Adjusted total debt. See details »

3 Adjusted total capital. See details »

4 2023 Calculation
Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 7,208 ÷ 20,514 = 0.35

Solvency ratio Description The company
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. Cummins Inc. adjusted debt-to-capital ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Total assets 32,005 30,299 23,710 22,624 19,737
Total Cummins Inc. shareholders’ equity 8,850 8,975 8,474 8,062 7,507
Solvency Ratio
Financial leverage1 3.62 3.38 2.80 2.81 2.63
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total assets2 31,247 29,992 23,507 22,321 19,438
Adjusted total equity3 13,306 13,885 12,745 11,888 11,274
Solvency Ratio
Adjusted financial leverage4 2.35 2.16 1.84 1.88 1.72

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).

1 2023 Calculation
Financial leverage = Total assets ÷ Total Cummins Inc. shareholders’ equity
= 32,005 ÷ 8,850 = 3.62

2 Adjusted total assets. See details »

3 Adjusted total equity. See details »

4 2023 Calculation
Adjusted financial leverage = Adjusted total assets ÷ Adjusted total equity
= 31,247 ÷ 13,306 = 2.35

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Cummins Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Net income attributable to Cummins Inc. 735 2,151 2,131 1,789 2,260
Net sales 34,065 28,074 24,021 19,811 23,571
Profitability Ratio
Net profit margin1 2.16% 7.66% 8.87% 9.03% 9.59%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted consolidated net income2 379 1,777 2,888 1,953 2,279
Adjusted net sales3 34,403 28,217 24,195 19,988 23,769
Profitability Ratio
Adjusted net profit margin4 1.10% 6.30% 11.94% 9.77% 9.59%

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).

1 2023 Calculation
Net profit margin = 100 × Net income attributable to Cummins Inc. ÷ Net sales
= 100 × 735 ÷ 34,065 = 2.16%

2 Adjusted consolidated net income. See details »

3 Adjusted net sales. See details »

4 2023 Calculation
Adjusted net profit margin = 100 × Adjusted consolidated net income ÷ Adjusted net sales
= 100 × 379 ÷ 34,403 = 1.10%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Cummins Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Net income attributable to Cummins Inc. 735 2,151 2,131 1,789 2,260
Total Cummins Inc. shareholders’ equity 8,850 8,975 8,474 8,062 7,507
Profitability Ratio
ROE1 8.31% 23.97% 25.15% 22.19% 30.11%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted consolidated net income2 379 1,777 2,888 1,953 2,279
Adjusted total equity3 13,306 13,885 12,745 11,888 11,274
Profitability Ratio
Adjusted ROE4 2.85% 12.80% 22.66% 16.43% 20.21%

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).

1 2023 Calculation
ROE = 100 × Net income attributable to Cummins Inc. ÷ Total Cummins Inc. shareholders’ equity
= 100 × 735 ÷ 8,850 = 8.31%

2 Adjusted consolidated net income. See details »

3 Adjusted total equity. See details »

4 2023 Calculation
Adjusted ROE = 100 × Adjusted consolidated net income ÷ Adjusted total equity
= 100 × 379 ÷ 13,306 = 2.85%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity. Cummins Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Reported
Selected Financial Data (US$ in millions)
Net income attributable to Cummins Inc. 735 2,151 2,131 1,789 2,260
Total assets 32,005 30,299 23,710 22,624 19,737
Profitability Ratio
ROA1 2.30% 7.10% 8.99% 7.91% 11.45%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted consolidated net income2 379 1,777 2,888 1,953 2,279
Adjusted total assets3 31,247 29,992 23,507 22,321 19,438
Profitability Ratio
Adjusted ROA4 1.21% 5.92% 12.29% 8.75% 11.72%

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).

1 2023 Calculation
ROA = 100 × Net income attributable to Cummins Inc. ÷ Total assets
= 100 × 735 ÷ 32,005 = 2.30%

2 Adjusted consolidated net income. See details »

3 Adjusted total assets. See details »

4 2023 Calculation
Adjusted ROA = 100 × Adjusted consolidated net income ÷ Adjusted total assets
= 100 × 379 ÷ 31,247 = 1.21%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Cummins Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.