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Cummins Interest Coverage

: 23.68 (As of Jun. 2022)
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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Cummins's Operating Income for the three months ended in Jun. 2022 was $805 Mil. Cummins's Interest Expense for the three months ended in Jun. 2022 was $-34 Mil. Cummins's interest coverage for the quarter that ended in Jun. 2022 was 23.68. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Cummins's Interest Coverage or its related term are showing as below:

CMI' s Interest Coverage Range Over the Past 10 Years
Min: 18.47   Med: 24.77   Max: 58.97
Current: 22.1


CMI's Interest Coverage is ranked better than
55.11% of 2163 companies
in the Industrial Products industry
Industry Median: 17.52 vs CMI: 22.10

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.


Cummins Interest Coverage Historical Data

The historical data trend for Cummins's Interest Coverage 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
Interest Coverage
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 24.41 20.98 22.83 18.47 19.95

Cummins Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Interest Coverage 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 20.69 20.46 15.15 32.24 23.68

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Cummins's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage Distribution

For the Industrial Products industry and Industrials sector, Cummins's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Cummins's Interest Coverage falls into.



Cummins Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage=-1* Operating Income /Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt.


Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Cummins's Interest Coverage for the fiscal year that ended in Dec. 2021 is calculated as

Here, for the fiscal year that ended in Dec. 2021, Cummins's Interest Expense was $-111 Mil. Its Operating Income was $2,214 Mil. And its Long-Term Debt & Capital Lease Obligation was $3,905 Mil.

Interest Coverage=-1* Operating Income (A: Dec. 2021 )/Interest Expense (A: Dec. 2021 )
=-1*2214/-111
=19.95

Cummins's Interest Coverage for the quarter that ended in Jun. 2022 is calculated as

Here, for the three months ended in Jun. 2022, Cummins's Interest Expense was $-34 Mil. Its Operating Income was $805 Mil. And its Long-Term Debt & Capital Lease Obligation was $3,805 Mil.

Interest Coverage=-1* Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*805/-34
=23.68

* 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.

The higher the ratio, the stronger the company's Financial Strength is.


Cummins  (NYSE:CMI) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .


Cummins Interest Coverage Related Terms

Thank you for viewing the detailed overview of Cummins's Interest Coverage 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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