Cummins (WBO:CMI) ROCE %

: -22.46% (As of Dec. 2023)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Cummins's annualized ROCE % for the quarter that ended in Dec. 2023 was -22.46%.

Cummins ROCE % Historical Data

The historical data trend for Cummins's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Cummins Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

22.76

15.71

18.03

17.51

10.39

Cummins Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROCE %																17.54	23.14	20.74	18.86	-22.46

Cummins ROCE % Calculation

Cummins's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	1834.917	/	( ( (28602.256 - 10781.424)	+	(29348.585 - 11832.051) )	/ 2 )
	=	1834.917	/	( (17820.832	+	17516.534)	/ 2 )
	=	1834.917	/	17668.683
	=	10.39 %

Cummins's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	-4174.184	/	( ( (30074.889 - 10425.062)	+	(29348.585 - 11832.051) )	/ 2 )
	=	-4174.184	/	( ( 19649.827	+	17516.534 )	/ 2 )
	=	-4174.184	/	18583.1805
	=	-22.46 %

(1) Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

Cummins (WBO:CMI) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Cummins ROCE % Related Terms

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Cummins (WBO:CMI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Cummins Inc (WBO:CMI) » Definitions » ROCE %

Comparable Companies

Traded in Other Exchanges

CMI:USA CUM:Germany C1MI34:Brazil

Address

500 Jackson Street, Box 3005, Columbus, IN, USA, 47202-3005

Website

https://www.cummins.com

Cummins is the top manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, in addition to standby and prime power generators. The company also sells powertrain components, which include transmissions, turbochargers, aftertreatment systems, and fuel systems. Cummins is in the unique position of competing with its primary customers, heavy-duty truck manufacturers, who make and aggressively market their own engines. Despite robust competition across all its segments and increasing government regulation of carbon emissions, Cummins has maintained its leadership position in the industry.