Cummins Inc.
Supplier Financial Health Report
Overview
June 2024
USA
Incorporated Country
75,000
Number of Employees
A+
Credit Rating
8
Count of Investments
Five-Year Financial Trend Analysis for Cummins Inc.
--
Credit Trend
111.48%
Total Balance Sheet Growth Rate
182.89%
Total Debt Growth Rate
The balance sheet shows a similar trend, with total assets growing from $15.13B in 2015 to $32B in 2023, a 111.48% increase. The company's cash reserves have also grown from $1.71B in 2015 to $2.18B in 2023, a 27.35% increase. However, the total debt has seen a substantial increase, rising from $2.37B in 2019 to $6.7B in 2023, a 182.89% change.
Cummins' financial health is further evidenced by its strong credit rating of A+ and a high credit score of 97. These indicators suggest a robust financial position and low credit risk. The company has undergone two funding rounds, raising a total of $52.62M, and has made eight investments. In terms of exits, Cummins has had only one recorded exit.
The net income trend has shown a decrease, dropping from $1.47B in 2015 to $840M in 2023, a 42.86% change. However, the EBITDA and net operating cash flow have both increased, with EBITDA rising from $3.48B in 2018 to $3.8B in 2022, and net operating cash flow increasing from $2.06B in 2015 to $3.97B in 2023. The free cash flow has also seen an increase, rising from $2.41B in 2019 to $2.75B in 2023.
Cummins' revenue is diversified across various countries, with China being the largest market, accounting for 8.95% of the company's revenue in 2023. India, Japan, Germany, the United Kingdom, France, Italy, Canada, Brazil, and the Russian Federation are also significant contributors to Cummins' revenue.
In conclusion, Cummins Inc. has demonstrated a strong financial position, with increasing revenue, a robust balance sheet, and a solid credit rating and score. The company's financial health is further supported by its successful fundraising efforts and strategic investments. Despite a decrease in net income, the growth in EBITDA, net operating cash flow, and free cash flow indicates a financially healthy and growing business.
Financial Health Risk Assessment for Cummins Inc.
LOW
Credit Risk
LOW
Bankruptcy Risk
MEDIUM
Financial Health Risk
However, the financial health of Cummins Inc. is not without challenges. Total debt has seen a substantial increase, rising from $2.37 billion in 2019 to $6.7 billion in 2023, a 182.89% change. This increase in debt could be a concern for investors and creditors, as it may impact the company's ability to meet its financial obligations.
The net income trend has also shown a decrease, dropping from $1.47 billion in 2015 to $840 million in 2023, a 42.86% change. While the EBITDA and net operating cash flow have both increased, the net income decrease may indicate operational inefficiencies or a decline in pricing power.
Additionally, the company's gross profit margin and net profit margin are relatively low at 0.24 and 0.02, respectively. This suggests that Cummins may be facing production inefficiencies or struggling to command high prices for its goods or services. This could potentially impact the company's profitability in the long run.
Furthermore, the quick ratio of 0.65 is lower than the current ratio, indicating that the company may not have enough quick assets to cover its immediate liabilities. This could limit the company's ability to respond to unexpected financial obligations.
Despite these concerns, the company's strong credit rating and high Altman Z-Score suggest a low probability of bankruptcy. However, it is important for investors and creditors to closely monitor these areas of concern to ensure the company's long-term financial sustainability.
List of UEIs for Cummins Inc.
ABOUT SUPPLIER FINANCIAL HEALTH REPORTS
Ark provides definitive, consolidated analyses of every vendor, subcontractor, supplier, grant awardee, non-profit, and investment organization in the national security and defense sectors. Supplier financial health reports are AI-assisted analyses of the current health and stability of an organization, as well as the trends, trajectory, and risk indicators that partners and stakeholders need to know about.
Explore Additional Analyses
ABOUT ARK.AI
The Ark is the only software platform purpose-built for Defense Acquisition that leverages authoritative commercial data and AI-enabled Applications designed to solve Acquisition challenges. With the Ark, analysts and decision-makers gain the ability to manage Acquisition programs proactively, allowing them to unwind the legacy complexity and effectively field modern warfighting systems that compete with China.
The Leading Defense Acquisition Software.
OUR APPLICATIONS
AI-enabled Applications within The Ark reflect standard workflows across the Defense Acquisition Process. From Science & Technology to Modernization, these Applications allow for the execution of rapid, efficient, data-informed decisions, standardized reporting, and efficient workflow management. The Ark enables your team to transform Defense Acquisition into a strategic advantage.
