Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Cummins Inc., solvency ratios
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).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Cummins Inc. debt to equity ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Cummins Inc. debt to equity ratio (including operating lease liability) deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Cummins Inc. debt to capital ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Cummins Inc. debt to capital ratio (including operating lease liability) deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Cummins Inc. debt to assets ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Cummins Inc. debt to assets ratio (including operating lease liability) deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Cummins Inc. financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Cummins Inc. interest coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Cummins Inc. fixed charge coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Debt to Equity
Cummins Inc., debt to equity 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) | ||||||
| Loans payable | 280) | 210) | 208) | 169) | 100) | |
| Commercial paper | 1,496) | 2,574) | 313) | 323) | 660) | |
| Current maturities of long-term debt | 118) | 573) | 59) | 62) | 31) | |
| Long-term debt | 4,802) | 4,498) | 3,579) | 3,610) | 1,576) | |
| 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 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 1.94 | 2.33 | 2.29 | 2.42 | 2.58 | |
| Eaton Corp. plc | 0.49 | 0.51 | 0.52 | 0.54 | 0.52 | |
| GE Aerospace | 0.77 | 0.89 | 0.87 | 2.11 | 3.21 | |
| Honeywell International Inc. | 1.29 | 1.17 | 1.06 | 1.28 | 0.87 | |
| Lockheed Martin Corp. | 2.55 | 1.68 | 1.07 | 2.02 | 4.05 | |
| RTX Corp. | 0.73 | 0.44 | 0.43 | 0.44 | 1.04 | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.54 | 1.33 | 1.26 | 1.75 | 2.08 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.43 | 1.32 | 1.25 | 1.73 | 1.86 | |
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 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Cummins Inc. debt to equity ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Debt to Equity (including Operating Lease Liability)
Cummins Inc., debt to equity (including operating lease liability) 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) | ||||||
| Loans payable | 280) | 210) | 208) | 169) | 100) | |
| Commercial paper | 1,496) | 2,574) | 313) | 323) | 660) | |
| Current maturities of long-term debt | 118) | 573) | 59) | 62) | 31) | |
| Long-term debt | 4,802) | 4,498) | 3,579) | 3,610) | 1,576) | |
| Total debt | 6,696) | 7,855) | 4,159) | 4,164) | 2,367) | |
| Current portion of operating lease liabilities | 138) | 132) | 128) | 128) | 131) | |
| Long-term portion of operating lease liabilities | 374) | 368) | 326) | 325) | 370) | |
| Total debt (including operating lease liability) | 7,208) | 8,355) | 4,613) | 4,617) | 2,868) | |
| Total Cummins Inc. shareholders’ equity | 8,850) | 8,975) | 8,474) | 8,062) | 7,507) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.81 | 0.93 | 0.54 | 0.57 | 0.38 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 1.97 | 2.37 | 2.33 | 2.46 | 2.62 | |
| Eaton Corp. plc | 0.52 | 0.54 | 0.55 | 0.57 | 0.55 | |
| GE Aerospace | 0.84 | 0.96 | 0.94 | 2.20 | 3.32 | |
| Honeywell International Inc. | 1.36 | 1.23 | 1.11 | 1.32 | 0.90 | |
| Lockheed Martin Corp. | 2.73 | 1.81 | 1.19 | 2.21 | 4.40 | |
| RTX Corp. | 0.76 | 0.47 | 0.46 | 0.47 | 1.11 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.61 | 1.39 | 1.32 | 1.81 | 2.17 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.61 | 1.47 | 1.39 | 1.89 | 1.96 | |
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 (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Cummins Inc. shareholders’ equity
= 7,208 ÷ 8,850 = 0.81
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Cummins Inc. debt to equity ratio (including operating lease liability) deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Debt to Capital
Cummins Inc., debt to capital 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) | ||||||
| Loans payable | 280) | 210) | 208) | 169) | 100) | |
| Commercial paper | 1,496) | 2,574) | 313) | 323) | 660) | |
| Current maturities of long-term debt | 118) | 573) | 59) | 62) | 31) | |
| Long-term debt | 4,802) | 4,498) | 3,579) | 3,610) | 1,576) | |
| 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) | |
| 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 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.49 | 1.39 | 1.35 | 1.40 | 1.46 | |
| Caterpillar Inc. | 0.66 | 0.70 | 0.70 | 0.71 | 0.72 | |
| Eaton Corp. plc | 0.33 | 0.34 | 0.34 | 0.35 | 0.34 | |
| GE Aerospace | 0.43 | 0.47 | 0.47 | 0.68 | 0.76 | |
| Honeywell International Inc. | 0.56 | 0.54 | 0.51 | 0.56 | 0.46 | |
| Lockheed Martin Corp. | 0.72 | 0.63 | 0.52 | 0.67 | 0.80 | |
| RTX Corp. | 0.42 | 0.31 | 0.30 | 0.31 | 0.51 | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.61 | 0.57 | 0.56 | 0.64 | 0.68 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.59 | 0.57 | 0.56 | 0.63 | 0.65 | |
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 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Cummins Inc. debt to capital ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Debt to Capital (including Operating Lease Liability)
Cummins Inc., debt to capital (including operating lease liability) 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) | ||||||
| Loans payable | 280) | 210) | 208) | 169) | 100) | |
| Commercial paper | 1,496) | 2,574) | 313) | 323) | 660) | |
| Current maturities of long-term debt | 118) | 573) | 59) | 62) | 31) | |
| Long-term debt | 4,802) | 4,498) | 3,579) | 3,610) | 1,576) | |
| Total debt | 6,696) | 7,855) | 4,159) | 4,164) | 2,367) | |
| Current portion of operating lease liabilities | 138) | 132) | 128) | 128) | 131) | |
| Long-term portion of operating lease liabilities | 374) | 368) | 326) | 325) | 370) | |
| Total debt (including operating lease liability) | 7,208) | 8,355) | 4,613) | 4,617) | 2,868) | |
| Total Cummins Inc. shareholders’ equity | 8,850) | 8,975) | 8,474) | 8,062) | 7,507) | |
| Total capital (including operating lease liability) | 16,058) | 17,330) | 13,087) | 12,679) | 10,375) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.45 | 0.48 | 0.35 | 0.36 | 0.28 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.47 | 1.37 | 1.34 | 1.39 | 1.43 | |
| Caterpillar Inc. | 0.66 | 0.70 | 0.70 | 0.71 | 0.72 | |
| Eaton Corp. plc | 0.34 | 0.35 | 0.36 | 0.36 | 0.35 | |
| GE Aerospace | 0.46 | 0.49 | 0.49 | 0.69 | 0.77 | |
| Honeywell International Inc. | 0.58 | 0.55 | 0.53 | 0.57 | 0.47 | |
| Lockheed Martin Corp. | 0.73 | 0.64 | 0.54 | 0.69 | 0.81 | |
| RTX Corp. | 0.43 | 0.32 | 0.31 | 0.32 | 0.53 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.62 | 0.58 | 0.57 | 0.64 | 0.68 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.62 | 0.60 | 0.58 | 0.65 | 0.66 | |
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 (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 7,208 ÷ 16,058 = 0.45
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Cummins Inc. debt to capital ratio (including operating lease liability) deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Debt to Assets
Cummins Inc., debt to assets 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) | ||||||
| Loans payable | 280) | 210) | 208) | 169) | 100) | |
| Commercial paper | 1,496) | 2,574) | 313) | 323) | 660) | |
| Current maturities of long-term debt | 118) | 573) | 59) | 62) | 31) | |
| Long-term debt | 4,802) | 4,498) | 3,579) | 3,610) | 1,576) | |
| Total debt | 6,696) | 7,855) | 4,159) | 4,164) | 2,367) | |
| Total assets | 32,005) | 30,299) | 23,710) | 22,624) | 19,737) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.21 | 0.26 | 0.18 | 0.18 | 0.12 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.38 | 0.42 | 0.42 | 0.42 | 0.20 | |
| Caterpillar Inc. | 0.43 | 0.45 | 0.46 | 0.47 | 0.48 | |
| Eaton Corp. plc | 0.24 | 0.25 | 0.25 | 0.25 | 0.25 | |
| GE Aerospace | 0.13 | 0.17 | 0.18 | 0.30 | 0.34 | |
| Honeywell International Inc. | 0.33 | 0.31 | 0.30 | 0.35 | 0.27 | |
| Lockheed Martin Corp. | 0.33 | 0.29 | 0.23 | 0.24 | 0.27 | |
| RTX Corp. | 0.27 | 0.20 | 0.20 | 0.20 | 0.31 | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.29 | 0.28 | 0.28 | 0.32 | 0.31 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.30 | 0.29 | 0.29 | 0.32 | 0.32 | |
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 assets = Total debt ÷ Total assets
= 6,696 ÷ 32,005 = 0.21
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Cummins Inc. debt to assets ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
Debt to Assets (including Operating Lease Liability)
Cummins Inc., debt to assets (including operating lease liability) 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) | ||||||
| Loans payable | 280) | 210) | 208) | 169) | 100) | |
| Commercial paper | 1,496) | 2,574) | 313) | 323) | 660) | |
| Current maturities of long-term debt | 118) | 573) | 59) | 62) | 31) | |
| Long-term debt | 4,802) | 4,498) | 3,579) | 3,610) | 1,576) | |
| Total debt | 6,696) | 7,855) | 4,159) | 4,164) | 2,367) | |
| Current portion of operating lease liabilities | 138) | 132) | 128) | 128) | 131) | |
| Long-term portion of operating lease liabilities | 374) | 368) | 326) | 325) | 370) | |
| Total debt (including operating lease liability) | 7,208) | 8,355) | 4,613) | 4,617) | 2,868) | |
| Total assets | 32,005) | 30,299) | 23,710) | 22,624) | 19,737) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.23 | 0.28 | 0.19 | 0.20 | 0.15 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.40 | 0.43 | 0.43 | 0.43 | 0.21 | |
| Caterpillar Inc. | 0.44 | 0.46 | 0.46 | 0.48 | 0.49 | |
| Eaton Corp. plc | 0.26 | 0.26 | 0.27 | 0.27 | 0.27 | |
| GE Aerospace | 0.14 | 0.19 | 0.19 | 0.31 | 0.35 | |
| Honeywell International Inc. | 0.35 | 0.33 | 0.32 | 0.36 | 0.28 | |
| Lockheed Martin Corp. | 0.36 | 0.32 | 0.26 | 0.26 | 0.29 | |
| RTX Corp. | 0.28 | 0.21 | 0.21 | 0.21 | 0.33 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.30 | 0.30 | 0.29 | 0.33 | 0.33 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.33 | 0.33 | 0.32 | 0.35 | 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
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 7,208 ÷ 32,005 = 0.23
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Cummins Inc. debt to assets ratio (including operating lease liability) deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
Financial Leverage
Cummins Inc., financial leverage 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) | ||||||
| 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 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 4.49 | 5.16 | 5.02 | 5.11 | 5.38 | |
| Eaton Corp. plc | 2.02 | 2.06 | 2.07 | 2.13 | 2.04 | |
| GE Aerospace | 5.96 | 5.16 | 4.93 | 7.13 | 9.40 | |
| Honeywell International Inc. | 3.88 | 3.73 | 3.47 | 3.68 | 3.17 | |
| Lockheed Martin Corp. | 7.67 | 5.71 | 4.64 | 8.43 | 15.20 | |
| RTX Corp. | 2.71 | 2.19 | 2.21 | 2.25 | 3.34 | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 5.35 | 4.71 | 4.55 | 5.54 | 6.65 | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.81 | 4.49 | 4.33 | 5.35 | 5.76 | |
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).
1 2023 Calculation
Financial leverage = Total assets ÷ Total Cummins Inc. shareholders’ equity
= 32,005 ÷ 8,850 = 3.62
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Cummins Inc. financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023. |
Interest Coverage
Cummins Inc., interest coverage 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) | ||||||
| Net income attributable to Cummins Inc. | 735) | 2,151) | 2,131) | 1,789) | 2,260) | |
| Add: Net income attributable to noncontrolling interest | 105) | 32) | 33) | 22) | 8) | |
| Add: Income tax expense | 786) | 636) | 587) | 527) | 566) | |
| Add: Interest expense | 375) | 199) | 111) | 100) | 109) | |
| Earnings before interest and tax (EBIT) | 2,001) | 3,018) | 2,862) | 2,438) | 2,943) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 5.34 | 15.17 | 25.78 | 24.38 | 27.00 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | 0.18 | -0.98 | -0.88 | -5.71 | -2.19 | |
| Caterpillar Inc. | 26.66 | 20.80 | 17.88 | 8.80 | 19.62 | |
| Eaton Corp. plc | 26.34 | 21.22 | 21.11 | 12.72 | 11.98 | |
| GE Aerospace | 10.12 | 1.88 | -0.96 | 2.59 | 1.27 | |
| Honeywell International Inc. | 10.36 | 16.41 | 22.09 | 17.75 | 22.17 | |
| Lockheed Martin Corp. | 9.84 | 11.72 | 14.27 | 14.93 | 12.09 | |
| RTX Corp. | 3.32 | 5.64 | 4.71 | -0.65 | 5.65 | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 6.84 | 4.84 | 3.98 | 1.99 | 4.85 | |
| Interest Coverage, Industry | ||||||
| Industrials | 7.24 | 5.53 | 6.00 | 2.04 | 4.37 | |
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
Interest coverage = EBIT ÷ Interest expense
= 2,001 ÷ 375 = 5.34
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Cummins Inc. interest coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Fixed Charge Coverage
Cummins Inc., fixed charge coverage 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) | ||||||
| Net income attributable to Cummins Inc. | 735) | 2,151) | 2,131) | 1,789) | 2,260) | |
| Add: Net income attributable to noncontrolling interest | 105) | 32) | 33) | 22) | 8) | |
| Add: Income tax expense | 786) | 636) | 587) | 527) | 566) | |
| Add: Interest expense | 375) | 199) | 111) | 100) | 109) | |
| Earnings before interest and tax (EBIT) | 2,001) | 3,018) | 2,862) | 2,438) | 2,943) | |
| Add: Operating lease cost | 165) | 160) | 172) | 172) | 208) | |
| Earnings before fixed charges and tax | 2,166) | 3,178) | 3,034) | 2,610) | 3,151) | |
| Interest expense | 375) | 199) | 111) | 100) | 109) | |
| Operating lease cost | 165) | 160) | 172) | 172) | 208) | |
| Fixed charges | 540) | 359) | 283) | 272) | 317) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 4.01 | 8.85 | 10.72 | 9.60 | 9.94 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | 0.31 | -0.70 | -0.64 | -4.75 | -1.19 | |
| Caterpillar Inc. | 19.73 | 14.92 | 12.73 | 6.58 | 13.01 | |
| Eaton Corp. plc | 11.90 | 10.01 | 10.40 | 6.24 | 7.45 | |
| GE Aerospace | 5.25 | 1.35 | -0.22 | 1.93 | 1.09 | |
| Honeywell International Inc. | 8.13 | 11.00 | 13.67 | 11.49 | 14.06 | |
| Lockheed Martin Corp. | 7.81 | 8.44 | 9.95 | 11.12 | 9.12 | |
| RTX Corp. | 2.81 | 4.40 | 3.66 | -0.22 | 4.31 | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 5.14 | 3.61 | 3.06 | 1.66 | 3.63 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.62 | 3.58 | 3.93 | 1.59 | 2.96 | |
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,166 ÷ 540 = 4.01
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Cummins Inc. fixed charge coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |