Stock Analysis on Net

Cummins Inc. (NYSE:CMI)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Short-term Activity Ratios (Summary)

Cummins Inc., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Turnover Ratios
Inventory turnover 4.55 3.81 4.21 4.36 5.05
Receivables turnover 6.10 5.40 6.02 5.19 6.42
Payables turnover 6.06 5.02 6.07 5.29 6.94
Working capital turnover 14.84 9.27 4.60 3.56 7.54
Average No. Days
Average inventory processing period 80 96 87 84 72
Add: Average receivable collection period 60 68 61 70 57
Operating cycle 140 164 148 154 129
Less: Average payables payment period 60 73 60 69 53
Cash conversion cycle 80 91 88 85 76

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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Cummins Inc. inventory turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. Cummins Inc. receivables turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Cummins Inc. payables turnover ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Cummins Inc. working capital turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Cummins Inc. number of days of inventory outstanding deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Cummins Inc. number of days of receivables outstanding deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Cummins Inc. operating cycle deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Cummins Inc. cash conversion cycle deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Inventory Turnover

Cummins Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Cost of sales 25,816 21,355 18,326 14,917 17,591
Inventories 5,677 5,603 4,355 3,425 3,486
Short-term Activity Ratio
Inventory turnover1 4.55 3.81 4.21 4.36 5.05
Benchmarks
Inventory Turnover, Competitors2
Boeing Co. 0.88 0.81 0.75 0.78 0.94
Caterpillar Inc. 2.58 2.54 2.53 2.55 3.25
Eaton Corp. plc 3.95 4.04 4.48 5.88 5.11
General Electric Co. 3.05 3.19 3.40 3.80 4.74
Honeywell International Inc. 3.72 4.04 4.29 4.94 5.51
Lockheed Martin Corp. 18.87 18.68 19.45 16.01 14.22
RTX Corp. 4.83 5.03 5.65 5.11 5.21
Inventory Turnover, Sector
Capital Goods 2.39 2.35 2.34 2.33 2.67
Inventory Turnover, Industry
Industrials 3.92 3.98 3.88 3.63 3.97

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
Inventory turnover = Cost of sales ÷ Inventories
= 25,816 ÷ 5,677 = 4.55

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Cummins Inc. inventory turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Receivables Turnover

Cummins Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net sales 34,065 28,074 24,021 19,811 23,571
Accounts and notes receivable, net 5,583 5,202 3,990 3,820 3,670
Short-term Activity Ratio
Receivables turnover1 6.10 5.40 6.02 5.19 6.42
Benchmarks
Receivables Turnover, Competitors2
Boeing Co. 29.37 26.46 23.58 29.75 23.44
Caterpillar Inc. 6.86 6.39 5.68 5.33 5.92
Eaton Corp. plc 5.18 5.09 5.95 6.15 6.22
General Electric Co. 4.17 4.09 4.55 4.37 5.22
Honeywell International Inc. 4.87 4.77 5.04 4.78 4.90
Lockheed Martin Corp. 31.69 26.34 34.15 33.06 25.59
RTX Corp. 6.36 7.36 6.66 6.11 5.70
Receivables Turnover, Sector
Capital Goods 7.53 7.18 7.45 7.14 7.34
Receivables Turnover, Industry
Industrials 8.00 7.66 7.53 7.37 7.61

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
Receivables turnover = Net sales ÷ Accounts and notes receivable, net
= 34,065 ÷ 5,583 = 6.10

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Cummins Inc. receivables turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Payables Turnover

Cummins Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Cost of sales 25,816 21,355 18,326 14,917 17,591
Accounts payable, principally trade 4,260 4,252 3,021 2,820 2,534
Short-term Activity Ratio
Payables turnover1 6.06 5.02 6.07 5.29 6.94
Benchmarks
Payables Turnover, Competitors2
Boeing Co. 5.86 6.18 6.40 4.94 4.63
Caterpillar Inc. 5.41 4.76 4.36 4.75 6.15
Eaton Corp. plc 4.39 4.51 4.75 6.24 6.78
General Electric Co. 3.27 2.98 3.32 3.67 4.20
Honeywell International Inc. 3.36 3.53 3.40 3.86 4.25
Lockheed Martin Corp. 25.56 27.25 74.34 64.48 40.16
RTX Corp. 5.31 5.40 5.93 5.56 5.28
Payables Turnover, Sector
Capital Goods 5.46 5.20 5.63 5.53 5.68
Payables Turnover, Industry
Industrials 7.65 7.44 7.66 7.35 7.38

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
Payables turnover = Cost of sales ÷ Accounts payable, principally trade
= 25,816 ÷ 4,260 = 6.06

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Cummins Inc. payables turnover ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Working Capital Turnover

Cummins Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
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
Less: Current liabilities 12,903 11,421 7,084 6,335 6,260
Working capital 2,295 3,030 5,225 5,562 3,127
 
Net sales 34,065 28,074 24,021 19,811 23,571
Short-term Activity Ratio
Working capital turnover1 14.84 9.27 4.60 3.56 7.54
Benchmarks
Working Capital Turnover, Competitors2
Boeing Co. 5.78 3.42 2.34 1.69 15.57
Caterpillar Inc. 5.23 4.62 3.54 2.84 4.04
Eaton Corp. plc 5.91 8.70 65.65 5.42 5.95
General Electric Co. 7.24 7.93 4.94 2.26 7.03
Honeywell International Inc. 7.39 7.03 5.86 3.64 5.92
Lockheed Martin Corp. 18.85 12.93 11.52 12.01 19.15
RTX Corp. 41.62 20.15 9.75 7.52 26.47
Working Capital Turnover, Sector
Capital Goods 8.56 6.91 4.98 3.26 8.86
Working Capital Turnover, Industry
Industrials 11.58 9.65 6.77 4.43 9.88

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
Working capital turnover = Net sales ÷ Working capital
= 34,065 ÷ 2,295 = 14.84

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Cummins Inc. working capital turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Average Inventory Processing Period

Cummins Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Inventory turnover 4.55 3.81 4.21 4.36 5.05
Short-term Activity Ratio (no. days)
Average inventory processing period1 80 96 87 84 72
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Boeing Co. 415 452 486 467 388
Caterpillar Inc. 141 144 144 143 112
Eaton Corp. plc 92 90 82 62 71
General Electric Co. 120 114 107 96 77
Honeywell International Inc. 98 90 85 74 66
Lockheed Martin Corp. 19 20 19 23 26
RTX Corp. 76 73 65 71 70
Average Inventory Processing Period, Sector
Capital Goods 153 156 156 157 136
Average Inventory Processing Period, Industry
Industrials 93 92 94 100 92

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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 4.55 = 80

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Cummins Inc. number of days of inventory outstanding deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Average Receivable Collection Period

Cummins Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Receivables turnover 6.10 5.40 6.02 5.19 6.42
Short-term Activity Ratio (no. days)
Average receivable collection period1 60 68 61 70 57
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Boeing Co. 12 14 15 12 16
Caterpillar Inc. 53 57 64 68 62
Eaton Corp. plc 70 72 61 59 59
General Electric Co. 87 89 80 83 70
Honeywell International Inc. 75 77 72 76 75
Lockheed Martin Corp. 12 14 11 11 14
RTX Corp. 57 50 55 60 64
Average Receivable Collection Period, Sector
Capital Goods 48 51 49 51 50
Average Receivable Collection Period, Industry
Industrials 46 48 48 49 48

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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.10 = 60

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Cummins Inc. number of days of receivables outstanding deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Operating Cycle

Cummins Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 80 96 87 84 72
Average receivable collection period 60 68 61 70 57
Short-term Activity Ratio
Operating cycle1 140 164 148 154 129
Benchmarks
Operating Cycle, Competitors2
Boeing Co. 427 466 501 479 404
Caterpillar Inc. 194 201 208 211 174
Eaton Corp. plc 162 162 143 121 130
General Electric Co. 207 203 187 179 147
Honeywell International Inc. 173 167 157 150 141
Lockheed Martin Corp. 31 34 30 34 40
RTX Corp. 133 123 120 131 134
Operating Cycle, Sector
Capital Goods 201 207 205 208 186
Operating Cycle, Industry
Industrials 139 140 142 149 140

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
Operating cycle = Average inventory processing period + Average receivable collection period
= 80 + 60 = 140

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Cummins Inc. operating cycle deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Average Payables Payment Period

Cummins Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Payables turnover 6.06 5.02 6.07 5.29 6.94
Short-term Activity Ratio (no. days)
Average payables payment period1 60 73 60 69 53
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Boeing Co. 62 59 57 74 79
Caterpillar Inc. 67 77 84 77 59
Eaton Corp. plc 83 81 77 58 54
General Electric Co. 112 123 110 100 87
Honeywell International Inc. 109 103 107 95 86
Lockheed Martin Corp. 14 13 5 6 9
RTX Corp. 69 68 62 66 69
Average Payables Payment Period, Sector
Capital Goods 67 70 65 66 64
Average Payables Payment Period, Industry
Industrials 48 49 48 50 49

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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.06 = 60

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.

Cash Conversion Cycle

Cummins Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 80 96 87 84 72
Average receivable collection period 60 68 61 70 57
Average payables payment period 60 73 60 69 53
Short-term Activity Ratio
Cash conversion cycle1 80 91 88 85 76
Benchmarks
Cash Conversion Cycle, Competitors2
Boeing Co. 365 407 444 405 325
Caterpillar Inc. 127 124 124 134 115
Eaton Corp. plc 79 81 66 63 76
General Electric Co. 95 80 77 79 60
Honeywell International Inc. 64 64 50 55 55
Lockheed Martin Corp. 17 21 25 28 31
RTX Corp. 64 55 58 65 65
Cash Conversion Cycle, Sector
Capital Goods 134 137 140 142 122
Cash Conversion Cycle, Industry
Industrials 91 91 94 99 91

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 conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 80 + 6060 = 80

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Cummins Inc. cash conversion cycle deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.