Cummins Free Cash Flow vs Enterprise Value Analysis

CMI Stock

USD 295.78 2.85 0.95%

Cummins financial indicator trend analysis is way more than just evaluating Cummins prevailing accounting drivers to predict future trends. We encourage investors to analyze account correlations over time for multiple indicators to determine whether Cummins is a good investment. Please check the relationship between Cummins Free Cash Flow and its Enterprise Value accounts. Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Cummins. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in population.

For more detail on how to invest in Cummins Stock please use our How to Invest in Cummins guide.

Free Cash Flow vs Enterprise Value

Free Cash Flow vs Enterprise Value Correlation Analysis

The overlapping area represents the amount of trend that can be explained by analyzing historical patterns of Cummins Free Cash Flow account and Enterprise Value. At this time, the significance of the direction appears to have strong relationship.

The correlation between Cummins' Free Cash Flow and Enterprise Value is 0.68. Overlapping area represents the amount of variation of Free Cash Flow that can explain the historical movement of Enterprise Value in the same time period over historical financial statements of Cummins, assuming nothing else is changed. The correlation between historical values of Cummins' Free Cash Flow and Enterprise Value is a relative statistical measure of the degree to which these accounts tend to move together. The correlation coefficient measures the extent to which Free Cash Flow of Cummins are associated (or correlated) with its Enterprise Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when Enterprise Value has no effect on the direction of Free Cash Flow i.e., Cummins' Free Cash Flow and Enterprise Value go up and down completely randomly.

Correlation Coefficient

0.68

Relationship Direction	Positive
Relationship Strength	Significant

View All Relationships

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Enterprise Value

Enterprise Value (or EV) is usually referred to as Cummins theoretical takeover price. In the event of an acquisition, an acquirer would have to take on Cummins debt, but would also pocket its cash. Enterprise Value is more accurate representation of Cummins value than its market capitalization because it takes into account all of Cummins existing debt. A measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization that includes the market capitalization, plus total debt, minority interest and preferred shares, minus total cash and cash equivalents.

Most indicators from Cummins' fundamental ratios are interrelated and interconnected. However, analyzing fundamental ratios indicators one by one will only give a small insight into Cummins current financial condition. On the other hand, looking into the entire matrix of fundamental ratios indicators, and analyzing their relationships over time can provide a more complete picture of the company financial strength now and in the future. Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Cummins. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in population.

For more detail on how to invest in Cummins Stock please use our How to Invest in Cummins guide.As of now, Cummins' Enterprise Value Multiple is increasing as compared to previous years. The Cummins' current Enterprise Value is estimated to increase to about 31.3 B, while Tax Provision is projected to decrease to under 536.8 M.

	2021	2022	2023	2024 (projected)
Gross Profit	5.7B	6.7B	8.2B	8.7B
Total Revenue	24.0B	28.1B	34.1B	35.8B

Gross Profit Total Revenue

Cummins fundamental ratios Correlations

	Total Assets	Short Long Term Debt Total	Other Current Liab	Total Current Liabilities	Total Stockholder Equity	Property Plant And Equipment Net	Net Debt	Retained Earnings	Cash	Non Current Assets Total	Non Currrent Assets Other	Cash And Short Term Investments	Net Receivables	Common Stock Shares Outstanding	Non Current Liabilities Total	Inventory	Other Current Assets	Other Stockholder Equity	Total Liab	Property Plant And Equipment Gross	Total Current Assets	Short Term Debt	Accounts Payable	Common Stock	Intangible Assets	Current Deferred Revenue
Total Assets		0.94	0.89	0.97	0.86	0.98	0.86	0.96	0.59	0.99	0.83	0.69	0.99	0.09	0.98	0.99	0.89	-0.87	0.99	0.93	0.99	0.83	0.99	0.12	0.92	0.89
Short Long Term Debt Total	0.94		0.85	0.96	0.67	0.9	0.95	0.87	0.5	0.96	0.82	0.61	0.9	-0.17	0.96	0.93	0.81	-0.8	0.97	0.96	0.91	0.92	0.95	-0.12	0.97	0.96
Other Current Liab	0.89	0.85		0.94	0.65	0.92	0.82	0.79	0.39	0.9	0.59	0.5	0.89	0.05	0.87	0.88	0.84	-0.62	0.92	0.89	0.86	0.71	0.88	-0.22	0.87	0.88
Total Current Liabilities	0.97	0.96	0.94		0.73	0.96	0.94	0.89	0.43	0.98	0.74	0.55	0.96	-0.03	0.95	0.97	0.86	-0.79	0.99	0.95	0.93	0.89	0.98	-0.09	0.97	0.93
Total Stockholder Equity	0.86	0.67	0.65	0.73		0.85	0.51	0.88	0.71	0.81	0.77	0.76	0.87	0.5	0.79	0.84	0.84	-0.77	0.76	0.69	0.9	0.52	0.8	0.54	0.62	0.55
Property Plant And Equipment Net	0.98	0.9	0.92	0.96	0.85		0.83	0.94	0.51	0.98	0.77	0.61	0.98	0.13	0.94	0.97	0.88	-0.8	0.96	0.91	0.96	0.77	0.96	0.07	0.89	0.87
Net Debt	0.86	0.95	0.82	0.94	0.51	0.83		0.78	0.21	0.9	0.69	0.34	0.83	-0.3	0.86	0.87	0.7	-0.71	0.92	0.91	0.79	0.96	0.89	-0.27	0.97	0.94
Retained Earnings	0.96	0.87	0.79	0.89	0.88	0.94	0.78		0.58	0.96	0.89	0.69	0.95	0.08	0.95	0.95	0.79	-0.96	0.93	0.87	0.95	0.74	0.95	0.28	0.82	0.83
Cash	0.59	0.5	0.39	0.43	0.71	0.51	0.21	0.58		0.5	0.66	0.98	0.53	0.31	0.63	0.51	0.6	-0.52	0.52	0.47	0.68	0.24	0.5	0.38	0.34	0.39
Non Current Assets Total	0.99	0.96	0.9	0.98	0.81	0.98	0.9	0.96	0.5		0.82	0.62	0.98	0.0	0.98	0.99	0.86	-0.87	0.99	0.94	0.96	0.86	0.99	0.05	0.95	0.92
Non Currrent Assets Other	0.83	0.82	0.59	0.74	0.77	0.77	0.69	0.89	0.66	0.82		0.74	0.77	-0.02	0.87	0.81	0.68	-0.89	0.8	0.82	0.84	0.67	0.79	0.29	0.68	0.75
Cash And Short Term Investments	0.69	0.61	0.5	0.55	0.76	0.61	0.34	0.69	0.98	0.62	0.74		0.64	0.27	0.73	0.62	0.68	-0.62	0.63	0.59	0.77	0.35	0.61	0.35	0.46	0.51
Net Receivables	0.99	0.9	0.89	0.96	0.87	0.98	0.83	0.95	0.53	0.98	0.77	0.64		0.18	0.94	0.99	0.88	-0.85	0.97	0.9	0.98	0.8	0.98	0.17	0.9	0.84
Common Stock Shares Outstanding	0.09	-0.17	0.05	-0.03	0.5	0.13	-0.3	0.08	0.31	0.0	-0.02	0.27	0.18		-0.06	0.09	0.35	0.07	-0.04	-0.1	0.19	-0.24	0.02	0.65	-0.15	-0.32
Non Current Liabilities Total	0.98	0.96	0.87	0.95	0.79	0.94	0.86	0.95	0.63	0.98	0.87	0.73	0.94	-0.06		0.96	0.83	-0.88	0.98	0.94	0.97	0.82	0.96	0.05	0.91	0.93
Inventory	0.99	0.93	0.88	0.97	0.84	0.97	0.87	0.95	0.51	0.99	0.81	0.62	0.99	0.09	0.96		0.88	-0.86	0.98	0.94	0.97	0.85	0.99	0.12	0.92	0.88
Other Current Assets	0.89	0.81	0.84	0.86	0.84	0.88	0.7	0.79	0.6	0.86	0.68	0.68	0.88	0.35	0.83	0.88		-0.62	0.86	0.83	0.91	0.7	0.84	0.11	0.8	0.71
Other Stockholder Equity	-0.87	-0.8	-0.62	-0.79	-0.77	-0.8	-0.71	-0.96	-0.52	-0.87	-0.89	-0.62	-0.85	0.07	-0.88	-0.86	-0.62		-0.84	-0.77	-0.85	-0.7	-0.87	-0.35	-0.73	-0.75
Total Liab	0.99	0.97	0.92	0.99	0.76	0.96	0.92	0.93	0.52	0.99	0.8	0.63	0.97	-0.04	0.98	0.98	0.86	-0.84		0.96	0.96	0.87	0.99	-0.03	0.96	0.94
Property Plant And Equipment Gross	0.93	0.96	0.89	0.95	0.69	0.91	0.91	0.87	0.47	0.94	0.82	0.59	0.9	-0.1	0.94	0.94	0.83	-0.77	0.96		0.91	0.84	0.93	-0.12	0.92	0.95
Total Current Assets	0.99	0.91	0.86	0.93	0.9	0.96	0.79	0.95	0.68	0.96	0.84	0.77	0.98	0.19	0.97	0.97	0.91	-0.85	0.96	0.91		0.77	0.96	0.2	0.86	0.83
Short Term Debt	0.83	0.92	0.71	0.89	0.52	0.77	0.96	0.74	0.24	0.86	0.67	0.35	0.8	-0.24	0.82	0.85	0.7	-0.7	0.87	0.84	0.77		0.87	-0.14	0.95	0.84
Accounts Payable	0.99	0.95	0.88	0.98	0.8	0.96	0.89	0.95	0.5	0.99	0.79	0.61	0.98	0.02	0.96	0.99	0.84	-0.87	0.99	0.93	0.96	0.87		0.08	0.94	0.9
Common Stock	0.12	-0.12	-0.22	-0.09	0.54	0.07	-0.27	0.28	0.38	0.05	0.29	0.35	0.17	0.65	0.05	0.12	0.11	-0.35	-0.03	-0.12	0.2	-0.14	0.08		-0.17	-0.29
Intangible Assets	0.92	0.97	0.87	0.97	0.62	0.89	0.97	0.82	0.34	0.95	0.68	0.46	0.9	-0.15	0.91	0.92	0.8	-0.73	0.96	0.92	0.86	0.95	0.94	-0.17		0.92
Current Deferred Revenue	0.89	0.96	0.88	0.93	0.55	0.87	0.94	0.83	0.39	0.92	0.75	0.51	0.84	-0.32	0.93	0.88	0.71	-0.75	0.94	0.95	0.83	0.84	0.9	-0.29	0.92

Click cells to compare fundamentals

Cummins Account Relationship Matchups

Cummins fundamental ratios Accounts

	2019	2020	2021	2022	2023	2024 (projected)
Total Assets	19.7B	22.6B	23.7B	30.3B	32.0B	33.6B
Short Long Term Debt Total	2.4B	4.2B	4.2B	7.9B	7.2B	7.6B
Other Current Liab	2.4B	2.3B	2.6B	2.8B	5.4B	5.7B
Total Current Liabilities	6.3B	6.3B	7.1B	11.4B	12.9B	13.5B
Total Stockholder Equity	7.5B	8.1B	8.5B	9.0B	8.9B	9.3B
Property Plant And Equipment Net	4.2B	4.3B	4.4B	5.5B	6.8B	7.1B
Net Debt	1.2B	763M	1.6B	5.8B	5.0B	5.3B
Retained Earnings	14.4B	15.4B	16.7B	18.0B	17.9B	18.7B
Cash	1.1B	3.4B	2.6B	2.1B	2.2B	2.3B
Non Current Assets Total	10.4B	10.7B	11.4B	15.8B	16.8B	17.6B
Non Currrent Assets Other	1.6B	2.3B	2.8B	2.9B	2.2B	2.3B
Cash And Short Term Investments	1.5B	3.9B	3.2B	2.6B	2.7B	2.9B
Net Receivables	3.7B	3.8B	4.0B	5.2B	5.6B	5.9B
Common Stock Shares Outstanding	156.1M	149M	145.9M	142.3M	142.7M	170.0M
Liabilities And Stockholders Equity	19.7B	22.6B	23.7B	30.3B	32.0B	33.6B
Non Current Liabilities Total	5.0B	7.3B	7.2B	8.7B	9.2B	9.7B
Inventory	3.5B	3.4B	4.4B	5.6B	5.7B	6.0B
Other Current Assets	761M	790M	777M	1.1B	1.2B	1.3B
Other Stockholder Equity	(7.2B)	(7.8B)	(9.1B)	(9.4B)	(7.4B)	(7.0B)
Total Liab	11.3B	13.6B	14.3B	20.1B	22.1B	23.2B
Property Plant And Equipment Gross	4.2B	4.7B	9.8B	11.0B	12.2B	12.8B
Total Current Assets	9.4B	11.9B	12.3B	14.5B	15.2B	16.0B
Accumulated Other Comprehensive Income	(2.0B)	(2.0B)	(1.6B)	(1.9B)	(2.2B)	(2.1B)
Short Term Debt	791M	554M	580M	3.4B	2.0B	2.1B
Accounts Payable	2.5B	2.8B	3.0B	4.3B	4.3B	4.5B
Common Stock	2.3B	2.4B	2.4B	2.2B	556M	1.1B
Intangible Assets	1.0B	963M	900M	2.7B	2.5B	2.6B
Current Deferred Revenue	533M	691M	855M	1.0B	1.2B	1.3B
Common Stock Total Equity	2.3B	2.4B	2.4B	2.2B	2.6B	1.3B
Good Will	1.3B	1.3B	1.3B	2.3B	2.5B	2.6B
Other Liab	3.1B	3.3B	3.6B	3.6B	4.2B	2.1B
Other Assets	2.1B	2.3B	3.3B	3.0B	3.5B	3.7B
Treasury Stock	(7.2B)	(7.8B)	(9.1B)	(9.4B)	(8.5B)	(8.0B)
Property Plant Equipment	4.2B	4.3B	4.4B	5.5B	6.3B	6.7B
Short Term Investments	341M	461M	595M	472M	562M	590.1M
Net Tangible Assets	5.2B	5.8B	6.3B	4.2B	4.8B	6.0B
Noncontrolling Interest In Consolidated Entity	911M	958M	927M	992M	1.1B	648.2M
Retained Earnings Total Equity	14.4B	15.4B	16.7B	18.0B	20.7B	11.8B

Pair Trading with Cummins

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Cummins position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cummins will appreciate offsetting losses from the drop in the long position's value.

Moving together with Cummins Stock

0.76	B	Barnes Group Financial Report 25th of April 2024	Pair Corr
0.89	CR	Crane Company Financial Report 8th of May 2024	Pair Corr
0.78	HI	Hillenbrand Financial Report 13th of May 2024	Pair Corr
0.94	IR	Ingersoll Rand Financial Report 1st of May 2024	Pair Corr

Moving against Cummins Stock

0.94	ATS	ATS Corporation	Pair Corr
0.66	RR	Richtech Robotics Class	Pair Corr

The ability to find closely correlated positions to Cummins could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Cummins when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Cummins - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Cummins to buy it.

The correlation of Cummins is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Cummins moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Cummins moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.

Correlation analysis and pair trading evaluation for Cummins can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.

Pair Correlation Correlation Matching

When determining whether Cummins offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Cummins' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Cummins Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Cummins Stock:

How To Invest In Cummins

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Is Cummins Stock a good investment?

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What is Cummins' Net Worth?

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Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Cummins. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in population.

For more detail on how to invest in Cummins Stock please use our How to Invest in Cummins guide.

You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.

Complementary Tools for Cummins Stock analysis

When running Cummins' price analysis, check to measure Cummins' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Cummins is operating at the current time. Most of Cummins' value examination focuses on studying past and present price action to predict the probability of Cummins' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Cummins' price. Additionally, you may evaluate how the addition of Cummins to your portfolios can decrease your overall portfolio volatility.

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Is Cummins' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Cummins. If investors know Cummins will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Cummins listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

Quarterly Earnings Growth

0.628

Dividend Share

6.5

Earnings Share

5.14

Revenue Per Share

240.402

Quarterly Revenue Growth

0.099

The market value of Cummins is measured differently than its book value, which is the value of Cummins that is recorded on the company's balance sheet. Investors also form their own opinion of Cummins' value that differs from its market value or its book value, called intrinsic value, which is Cummins' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Cummins' market value can be influenced by many factors that don't directly affect Cummins' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.

Please note, there is a significant difference between Cummins' value and its price as these two are different measures arrived at by different means. Investors typically determine if Cummins is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Cummins' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

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Cummins Free Cash Flow vs Enterprise Value Analysis

Free Cash Flow vs Enterprise Value

Free Cash Flow vs Enterprise Value Correlation Analysis

Correlation Coefficient

Free Cash Flow

Enterprise Value

Cummins fundamental ratios Correlations

Cummins Account Relationship Matchups

High Positive Relationship

High Negative Relationship

Cummins fundamental ratios Accounts

Pair Trading with Cummins

Moving together with Cummins Stock

Moving against Cummins Stock

Complementary Tools for Cummins Stock analysis

COMMON DESTINATIONS

MAIN CATEGORIES

COMPANY

Non Current Assets Total	+ 0.99	Total Assets
Net Receivables	+ 0.99	Total Assets
Inventory	+ 0.99	Total Assets
Total Liab	+ 0.99	Total Assets
Total Current Assets	+ 0.99	Total Assets
Accounts Payable	+ 0.99	Total Assets

Other Stockholder Equity	- 0.96	Retained Earnings
Other Stockholder Equity	- 0.89	Non Currrent Assets Other
Other Stockholder Equity	- 0.88	Non Current Liabilities Total
Accounts Payable	- 0.87	Other Stockholder Equity
Other Stockholder Equity	- 0.87	Non Current Assets Total
Other Stockholder Equity	- 0.87	Total Assets