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Cummins Piotroski F-Score

: 5 (As of Today)
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The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Cummins has an F-score of 5 indicating the company's financial situation is typical for a stable company.

The historical rank and industry rank for Cummins's Piotroski F-Score or its related term are showing as below:

CMI' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Med: 6   Max: 9
Current: 5

During the past 13 years, the highest Piotroski F-Score of Cummins was 9. The lowest was 2. And the median was 6.


Cummins Piotroski F-Score Historical Data

The historical data trend for Cummins's Piotroski F-Score 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.

* Premium members only.

Cummins Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 6.00 6.00 5.00 7.00

Cummins Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 7.00 7.00 6.00 5.00

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Cummins's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Cummins Piotroski F-Score Distribution

For the Industrial Products industry and Industrials sector, Cummins's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Cummins's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* 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.

This Year (Jun22) TTM:Last Year (Jun21) TTM:
Net Income was 534 + 394 + 418 + 702 = $2,048 Mil.
Cash Flow from Operations was 569 + 732 + 164 + 599 = $2,064 Mil.
Revenue was 5968 + 5850 + 6385 + 6586 = $24,789 Mil.
Gross Profit was 1414 + 1317 + 1532 + 1726 = $5,989 Mil.
Average Total Assets from the begining of this year (Jun21)
to the end of this year (Jun22) was
(22608 + 23063 + 23710 + 24122 + 24477) / 5 = $23596 Mil.
Total Assets at the begining of this year (Jun21) was $22,608 Mil.
Long-Term Debt & Capital Lease Obligation was $3,805 Mil.
Total Current Assets was $12,762 Mil.
Total Current Liabilities was $7,671 Mil.
Net Income was 501 + 501 + 603 + 600 = $2,205 Mil.

Revenue was 5118 + 5830 + 6092 + 6111 = $23,151 Mil.
Gross Profit was 1349 + 1361 + 1486 + 1478 = $5,674 Mil.
Average Total Assets from the begining of last year (Jun20)
to the end of last year (Jun21) was
(20314 + 21568 + 22624 + 22962 + 22608) / 5 = $22015.2 Mil.
Total Assets at the begining of last year (Jun20) was $20,314 Mil.
Long-Term Debt & Capital Lease Obligation was $3,952 Mil.
Total Current Assets was $11,931 Mil.
Total Current Liabilities was $6,604 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Cummins's current Net Income (TTM) was 2,048. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Cummins's current Cash Flow from Operations (TTM) was 2,064. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Jun21)
=2048/22608
=0.0905874

ROA (Last Year)=Net Income/Total Assets (Jun20)
=2205/20314
=0.10854583

Cummins's return on assets of this year was 0.0905874. Cummins's return on assets of last year was 0.10854583. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Cummins's current Net Income (TTM) was 2,048. Cummins's current Cash Flow from Operations (TTM) was 2,064. ==> 2,064 > 2,048 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun22)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jun21 to Jun22
=3805/23596
=0.16125615

Gearing (Last Year: Jun21)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jun20 to Jun21
=3952/22015.2
=0.17951234

Cummins's gearing of this year was 0.16125615. Cummins's gearing of last year was 0.17951234. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Jun22)=Total Current Assets/Total Current Liabilities
=12762/7671
=1.66366836

Current Ratio (Last Year: Jun21)=Total Current Assets/Total Current Liabilities
=11931/6604
=1.80663234

Cummins's current ratio of this year was 1.66366836. Cummins's current ratio of last year was 1.80663234. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Cummins's number of shares in issue this year was 142. Cummins's number of shares in issue last year was 146.5. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=5989/24789
=0.2415991

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=5674/23151
=0.24508661

Cummins's gross margin of this year was 0.2415991. Cummins's gross margin of last year was 0.24508661. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Jun21)
=24789/22608
=1.09647028

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jun20)
=23151/20314
=1.13965738

Cummins's asset turnover of this year was 1.09647028. Cummins's asset turnover of last year was 1.13965738. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+1+0+1+0+0
=5

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Cummins has an F-score of 5 indicating the company's financial situation is typical for a stable company.

Cummins  (NYSE:CMI) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Cummins Piotroski F-Score Related Terms

Thank you for viewing the detailed overview of Cummins's Piotroski F-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Cummins Business Description

Cummins logo
Address
500 Jackson Street, Box 3005, Columbus, IN, USA, 47202-3005
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 filtration products, 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 diesel emissions, Cummins has maintained its leadership position in the industry.
Executives
Peters Luther E officer: VP - Corporate Controller 500 JACKSON STREET COLUMBUS IN 47201
Fetch Bonnie J officer: VP - Supply Chain 500 JACKSON STREET COLUMBUS IN 47201
Wiltrout Jeffrey T officer: VP - Corporate Strategy 500 JACKSON STREET COLUMBUS IN 47201
Harris Carla A director 702 SW 8TH STREET BENTONVILLE AR 72716
Lamb-hale Nicole officer: VP - General Counsel 909 ROSE AVENUE SUITE 200 NORTH BETHESDA MD 20852
Newsome Earl officer: VP - Chief Information Officer 505 HUNTMAR PARK DR SUITE 300 HERNDON VA 20170
Brockhaus John D officer: VP-Human Resources Operations 500 JACKSON STREET COLUMBUS IN 47201
Narang Mahesh officer: VP & President - Components 500 JACKSON STREET COLUMBUS IN 47201
Chandler Mary T officer: VP - Corp. Resp. & Comm. Rel. 500 JACKSON STREET COLUMBUS IN 47201
Nelson Kimberly A director ONE GENERAL MILLS BLVD MINNEAPOLIS MN 55426
Davis Amy Rochelle officer: VP & Pres. - New Power Segment 500 JACKSON STREET COLUMBUS IN 47201
Stoner Nathan R officer: VP - China Area Business Org 500 JACKSON STREET COLUMBUS IN 47201
Kennedy Melina M officer: VP-Product Compl.-Reg. Affairs 301 EAST MARKET STREET INDIANAPOLIS IN 46204
Fier Walter J officer: VP - Chief Technical Officer 500 CENTRAL AVENUE COLUMBUS IN 47201
Quintos Karen H director ONE DELL WAY ROUND ROCK TX 78682

Cummins Headlines

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