Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Paying user area
Try for free
Cummins Inc. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Cummins Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Long-term Activity Ratios (Summary)
Cummins Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
The analysis of the quarterly financial ratios reveals certain trends and fluctuations over the presented periods. Each ratio provides insight into the efficiency of asset use and equity management.
- Net Fixed Asset Turnover
- This ratio exhibits a general stability with moderate fluctuations across the quarters. Starting from 5.47, it experienced a slight decline in late 2020, reaching a low of 4.66. It then recovered and generally increased through 2021, peaking at 5.74 in October 2021. The ratio fluctuated around 5.0 to 5.7 afterward, ending at 5.66 in the most recent quarter. This indicates relatively consistent utilization of fixed assets to generate sales, with brief periods of decreased asset efficiency that were later improved.
- Total Asset Turnover
- The total asset turnover ratio showed a declining trend through most of 2020, reaching a low of 0.88 by the end of that year. Starting in early 2021, it progressively improved and stabilized around 1.0 to 1.07, concluding at 1.07 in the latest quarter. This pattern suggests an initial reduction in the company’s overall effectiveness in using all assets to generate revenue possibly due to external factors, followed by a recovery indicating enhanced asset utilization efficiency.
- Equity Turnover
- Equity turnover demonstrated a declining trend in 2020 from 3.19 to 2.46, signaling less efficient use of shareholders' equity in that period. Recovery began in 2021 and continued steadily through 2022 and 2023. Noteworthy is a significant increase starting in late 2023, reaching 3.85 by the quarter ended March 2024. This suggests an improvement in generating revenue from equity, reflecting potentially better operational performance or financial leverage management in recent quarters.
Overall, the data indicates that after a period of reduced efficiency in 2020—likely reflecting challenging market conditions—the company improved its asset and equity utilization throughout 2021 and onwards. The recovery is particularly marked in equity turnover in the latest quarters, which may indicate stronger revenue generation relative to the equity base. The stable net fixed asset turnover ratio underscores consistent management of fixed asset productivity over time.
Net Fixed Asset Turnover
Cummins Inc., net fixed asset turnover calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Q1 2024 Calculation
Net fixed asset turnover
= (Net salesQ1 2024
+ Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
-
Net sales experienced fluctuations over the observed periods, initially declining from approximately $5,011 million to a low of $3,852 million in the second quarter of 2020. This drop indicates a challenging environment during that timeframe. Following this, net sales showed a consistent upward trend, recovering and surpassing pre-decline levels by the first quarter of 2022, reaching a peak near $8,453 million in the first quarter of 2023. However, subsequent quarters showed minor oscillations, with values stabilizing around the mid-$8,400 million range through the first quarter of 2024.
- Property, Plant and Equipment, Net
-
The net property, plant, and equipment values displayed relatively stable figures with a slight downward trend in early 2021, dipping to approximately $4,174 million in mid-2021. Afterward, there was a notable increase beginning in late 2021 through the end of 2023, peaking around $6,249 million in the fourth quarter of 2023. This suggests significant investments or capital expenditures during this period. The value slightly decreased by the first quarter of 2024 to about $6,011 million but remained substantially higher than earlier years.
- Net Fixed Asset Turnover Ratio
-
The net fixed asset turnover ratio, which measures the efficiency of using fixed assets to generate sales, began at a relatively high level of 5.47 in the first quarter of 2020 but declined throughout the year, reaching a low near 4.66 by the fourth quarter of 2020. From early 2021, the ratio improved steadily, achieving a peak around 5.74 by the third quarter of 2021. Although fluctuations continued, the turnover remained generally robust, hovering between 5.03 and 5.74 over subsequent periods. This pattern indicates improved utilization of fixed assets in generating revenue following the downturn in 2020, despite the increase in asset base.
Total Asset Turnover
Cummins Inc., total asset turnover calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Q1 2024 Calculation
Total asset turnover
= (Net salesQ1 2024
+ Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data for the company over the observed quarters reveal several notable trends in net sales, total assets, and total asset turnover ratios.
- Net Sales
- Net sales exhibit a generally upward trajectory through the reported periods, starting at approximately 5,011 million USD and reaching a peak near 8,638 million USD. There is a discernible dip in sales during the mid-2020 quarters, aligning with the broader economic challenges of that period, followed by a consistent recovery and growth trend into 2023. Sales fluctuations towards the end of the data show a slight decline but remain near historically high levels. This overall pattern indicates strong demand recovery and growth momentum over the medium term.
- Total Assets
- Total assets have progressively increased from around 20,076 million USD to approximately 31,827 million USD by the end of the latest quarter. This steady asset growth suggests ongoing investment and expansion of the asset base. Notably, there is a significant jump in total assets observed in late 2022, which may reflect acquisition activity, capital expenditures, or other strategic asset increases. Following this surge, asset levels stabilize but continue a moderate upward path, sustaining a larger asset base.
- Total Asset Turnover
- The total asset turnover ratio demonstrates some variability but generally oscillates between 0.88 and 1.12 over the timeline. The ratio initially declines from above 1.1 in early 2020 to below 0.9 by the end of that year, indicating less efficient asset use during that phase. However, from 2021 onward, the ratio improves steadily, returning to and exceeding 1.0 in later quarters. This recovery suggests enhanced efficiency in generating sales from the asset base, particularly notable given the substantial asset increases. The improvement in asset turnover towards the most recent periods indicates better operational utilization despite the larger asset scale.
In summary, the company's data reveal a rebound and growth in sales volume, significant expansion of the asset base, and a recovery in asset efficiency. These trends reflect a positive operational and financial momentum following a period of volatility, with ongoing challenges being managed to sustain growth and improve asset productivity.
Equity Turnover
Cummins Inc., equity turnover calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Total Cummins Inc. shareholders’ equity | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Q1 2024 Calculation
Equity turnover
= (Net salesQ1 2024
+ Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023)
÷ Total Cummins Inc. shareholders’ equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrate a general upward trend from March 2020 to March 2024. Starting at approximately $5.0 billion in early 2020, there was a decline in the second quarter of 2020, likely reflecting external challenges during that period. Subsequently, sales recovered steadily, surpassing pre-decline levels by early 2021. The period from early 2022 to early 2024 shows a consistent increase, with some fluctuations near the end of 2023 and early 2024, but overall maintaining a higher level than previous years.
- Total Shareholders' Equity
- Shareholders' equity exhibits growth from March 2020 through late 2023, increasing from about $7.1 billion to a peak exceeding $10 billion in the third quarter of 2023. A notable dip occurs in the final quarter of 2023 and the first quarter of 2024, dropping to around $8.9 billion and $9.1 billion, respectively. Despite this recent decline, the long-term trend indicates expansion in equity, reflecting increased company value and retained earnings over the majority of the observed period.
- Equity Turnover
- Equity turnover shows a declining trend initially, moving from over 3.1 in early 2020 to a low around 2.46 by the end of 2020. This suggests that the efficiency in using equity to generate sales decreased in that period. From early 2021 onward, the ratio improves steadily, hovering around or above 3.1 through most of 2022 and 2023. A marked increase occurs in late 2023 and early 2024, with ratios exceeding 3.7, indicating enhanced asset utilization and sales generation relative to equity during those recent quarters.
- Overall Insights
- The data presents a recovery and expansion phase following an initial setback in early 2020. Net sales and shareholders’ equity both strengthen over most of the period, supporting a positive operational and financial position. The improvement in equity turnover in recent quarters signifies increasing efficiency in converting equity investment into revenue. The late 2023 decline in shareholders' equity could warrant further investigation, although it has not yet reversed the general positive trajectory seen in other indicators.