Introduction
Every company provides its financial position to the public for auditing and tax payment purposes. In addition, this is usually done to strengthen their competitive edge and increase investor confidence as well as invite potential investors. An accounting report on the financial positions of businesses is therefore very important and necessary for the development of such businesses. It is through such initiatives that a conclusive evaluation along with a valuation of the company can be made. In this respect, accounting reporting forms an integral part of financial activities. Depending on each company’s performance, that is whether they make profits or losses, these are important in the calculation of the tax as well as dividend for shareholders. High profits result in increased tax collection, while a loss means less or no tax collection. These reports are quite significant in the development of a country’s economy. For instance, the United States economy is built largely on strong corporate ethics and investments. This paper will consider recent news on Cummins, Inc. It will also endeavor to provide an accounting report of the same (Gibson, 2011, p. 45).
Current event in accounting
Recent news by Dow Jones Newswires on Cummins Inc. provided a strong financial report on its first-quarter performance. Cummins Company deals in the manufacture, distribution, and design of service engines, among other electrical and fuel appliances. The company made a huge step towards its 2011 sales objectives. This raised their overall sales for the year 2011, allowing them to double second-quarter profits. The company boasts of presence in over 190 countries with above 500 independent distributors globally. Its distribution centers are networked in over 5200 dealer locations throughout the world. In addition, Cummins’ net income for the year 2010 was a massive $1.04 Billion. This shows its large financial base, which is impeccable and tempting to potential investors whose motives are usually to make more profit (Cummins Inc., 2011, p. 1).
Summary of the news on Cummins
An accounting report on Cummins by Bob Tita brings to knowledge its second-quarter performance which was outstanding. This achievement is attributed to an exceptional rise in demand for truck engines. It is this category of sales that is said to have propelled its profits to more than double. It is also reported that Cummins’ heavy-duty engines also saw a 73% rise in sales. Moreover, the company said that its sales on engines utilized in off-road constructions also rose by 51%. In summary, the company reported a 53% rise in engine-segment sales, which translated into $ 2.9 billion. In addition, pretax profit from that segment also rose from $ 197 in the previous year to $377 million. This exposed the surging demand for trucks used in commercial industries in North America. Other areas of improvement included avoidance of problems such as shortages of parts, among others, that held back other truck industries. It also increased its annual sales outlook to $18 billion from a forecast of $17 billion. The profit that Cummins reported in the second quarter was $ 505 million which translates to $ 2.60 per share. This was a huge improvement from its previous year’s performance, which was $ 1.25 per share, reflecting a $ 246 billion profit. performance in the second quarter raised its stock by 4.8% to $111.87 per share (Tita, 2011, p. 1).
Conclusion
Cummins Inc. deals in the manufacture, distribution, and design of service engines, among other electrical and fuel appliances. The company made a huge step towards its 2011 sales objectives. This raised their overall sales for the year 2011, allowing them to double second-quarter profits. It boasts of presence in over 190 countries with above 500 independent distributors globally. In addition, Cummins’ performance in the second quarter raised its stock by 4.8% to $111.87 per share (Tita, 2011, p. 1).
Reference List
Cummins Inc. (2011). About Cummins. Cummins.com. Web.
Gibson, C. H. (2011). Financial reporting and analysis: Using financial accounting Information (12th ed.). Mason, OH: South-Western Cengage Learning. ISBN 13: 9781439080603.
Tita, B. (2011). UPDATE: Cummins 2Q Profit Soars On Strong Truck-Market Growth. DOW JONES NEWSWIRES. Web.