Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Cummins Inc., liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.18 | 1.27 | 1.74 | 1.88 | 1.50 | |
| Quick ratio | 0.65 | 0.68 | 1.01 | 1.21 | 0.82 | |
| Cash ratio | 0.21 | 0.23 | 0.45 | 0.61 | 0.23 |
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).
| Liquidity ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Cummins Inc. current ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Cummins Inc. quick ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Cummins Inc. cash ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Current Ratio
Cummins Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| 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 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Boeing Co. | 1.14 | 1.22 | 1.33 | 1.39 | 1.05 | |
| Caterpillar Inc. | 1.35 | 1.39 | 1.46 | 1.53 | 1.47 | |
| Eaton Corp. plc | 1.51 | 1.38 | 1.04 | 1.56 | 1.70 | |
| General Electric Co. | 1.18 | 1.16 | 1.28 | 1.58 | 1.16 | |
| Honeywell International Inc. | 1.27 | 1.25 | 1.30 | 1.47 | 1.34 | |
| Lockheed Martin Corp. | 1.21 | 1.32 | 1.42 | 1.39 | 1.22 | |
| RTX Corp. | 1.04 | 1.09 | 1.19 | 1.21 | 1.08 | |
| Current Ratio, Sector | ||||||
| Capital Goods | 1.18 | 1.22 | 1.32 | 1.44 | 1.17 | |
| Current Ratio, Industry | ||||||
| Industrials | 1.18 | 1.22 | 1.31 | 1.43 | 1.20 | |
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
Current ratio = Current assets ÷ Current liabilities
= 15,198 ÷ 12,903 = 1.18
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Cummins Inc. current ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Quick Ratio
Cummins Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 2,179) | 2,101) | 2,592) | 3,401) | 1,129) | |
| Marketable securities | 562) | 472) | 595) | 461) | 341) | |
| Accounts and notes receivable, net | 5,583) | 5,202) | 3,990) | 3,820) | 3,670) | |
| Total quick assets | 8,324) | 7,775) | 7,177) | 7,682) | 5,140) | |
| Current liabilities | 12,903) | 11,421) | 7,084) | 6,335) | 6,260) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.65 | 0.68 | 1.01 | 1.21 | 0.82 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Boeing Co. | 0.28 | 0.32 | 0.34 | 0.41 | 0.23 | |
| Caterpillar Inc. | 0.74 | 0.79 | 0.89 | 1.02 | 0.98 | |
| Eaton Corp. plc | 0.91 | 0.73 | 0.54 | 0.68 | 0.78 | |
| General Electric Co. | 0.78 | 0.81 | 0.93 | 1.27 | 0.86 | |
| Honeywell International Inc. | 0.84 | 0.88 | 0.94 | 1.15 | 0.99 | |
| Lockheed Martin Corp. | 0.99 | 1.09 | 1.15 | 1.05 | 0.93 | |
| RTX Corp. | 0.63 | 0.69 | 0.81 | 0.78 | 0.73 | |
| Quick Ratio, Sector | ||||||
| Capital Goods | 0.60 | 0.64 | 0.72 | 0.84 | 0.65 | |
| Quick Ratio, Industry | ||||||
| Industrials | 0.66 | 0.70 | 0.78 | 0.88 | 0.71 | |
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
Quick ratio = Total quick assets ÷ Current liabilities
= 8,324 ÷ 12,903 = 0.65
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Cummins Inc. quick ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Cash Ratio
Cummins Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 2,179) | 2,101) | 2,592) | 3,401) | 1,129) | |
| Marketable securities | 562) | 472) | 595) | 461) | 341) | |
| Total cash assets | 2,741) | 2,573) | 3,187) | 3,862) | 1,470) | |
| Current liabilities | 12,903) | 11,421) | 7,084) | 6,335) | 6,260) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.21 | 0.23 | 0.45 | 0.61 | 0.23 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Boeing Co. | 0.17 | 0.19 | 0.20 | 0.29 | 0.10 | |
| Caterpillar Inc. | 0.20 | 0.22 | 0.31 | 0.36 | 0.31 | |
| Eaton Corp. plc | 0.34 | 0.09 | 0.08 | 0.19 | 0.12 | |
| General Electric Co. | 0.45 | 0.44 | 0.54 | 0.78 | 0.60 | |
| Honeywell International Inc. | 0.44 | 0.51 | 0.59 | 0.79 | 0.58 | |
| Lockheed Martin Corp. | 0.09 | 0.16 | 0.26 | 0.23 | 0.11 | |
| RTX Corp. | 0.14 | 0.16 | 0.22 | 0.25 | 0.21 | |
| Cash Ratio, Sector | ||||||
| Capital Goods | 0.24 | 0.26 | 0.32 | 0.44 | 0.31 | |
| Cash Ratio, Industry | ||||||
| Industrials | 0.26 | 0.29 | 0.35 | 0.45 | 0.34 | |
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
Cash ratio = Total cash assets ÷ Current liabilities
= 2,741 ÷ 12,903 = 0.21
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Cummins Inc. cash ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |