Financial Instruments
This gives the holder the right to sell an underlying asset at a set price (strike price) within a specified period of time
What Are Options?
Large organizations like pension funds, mutual funds, and insurance companies.
What are institutional investors?
This is the term for how a company decides to distribute its financial resources among various projects, investments, and shareholder returns.
What is capital allocation?
______ is characterized by a general increase in prices and a decrease in the purchasing power of money, is often measured by the Consumer Price Index (CPI).
What is inflation?
the agency that regulates capital markets in the US
What Are the Securities and Exchange Commission (SEC)?
a financial contract between a buyer and a seller to buy/sell a specific amount of the underlying asset at the agreed upon price on the agreed upon Later date
What are Futures?
They act as intermediaries between buyers and sellers of securities, providing market research and trading platforms.
What are Broker-Dealers?
This financial statement shows a company’s profitability over a period.
What is the income statement?
This technology is driving capital investment in data centers and operational efficiency across industries.
What is artificial intelligence (AI)?
The separation of this division streamlined operations and allowed Cummins to focus on core businesses, positively impacting its capital structure.
What is Atmus?
These two methods are the most common ways Cummins returns capital directly to shareholders.
What are dividends and share repurchases? ?
Local government entities that issue bonds to finance public projects
What are Municipalities?
This metric compares a company’s enterprise value to its earnings before interest, taxes, depreciation, and amortization.
What is EBITDA?
This measure of a country's economic performance, representing the total value of all goods and services produced over a specific time period, is closely watched by investors as an indicator of market health and potential investment opportunities.
What is Gross Domestic Product (GDP)?
____ __ WAS the year Cummins was first publicly traded
What happened in 1947?
Cummins may use this type of financing to avoid diluting shareholder equity.
What is debt financing?
Individual investors who buy and sell securities for personal investmenT
What are Retail Investors?
This type of market activity, involving company combinations, is rebounding in 2025.
What is mergers and acquisitions (M&A)?
This term refers to the return an investor can expect to earn if they hold a bond until maturity, and it is inversely related to the bond's price.
What are bond yields?
Cummins considers this type of return when evaluating whether to reinvest in the business or return capital to shareholders.
What is return on invested capital (ROIC)?
In 2025, this alternative lending market is booming, offering flexible financing outside traditional banks.
What is private credit?
(___ ___ are private investment funds that position themselves to make “long bets” on assets that they think will increase in value and “short bets” on assets that they think will decline in value.)
What are Hedge Funds?
This metric measures how effectively a company turns capital into profits.
What is return on capital employed (ROCE)?
Cummins uses this financial metric to assess the cost of capital and guide investment decisions.
What is weighted average cost of capital (WACC)?
The three biggest capital market risks faced by Cummins from its competitors include technological advancements, pricing pressures, and market share erosion.
What are technological advancements, pricing pressures, and market share erosion??