Caterpillar Financial Profile Analysis

Corporate Profile
Name: Caterpillar Inc.
Ticker: CAT
Exchange: New York Stock Exchange (NYSE)
Number of shares of common stock outstanding: 606,166,559
Industry: Industrials
Country: United States
CATERPILLAR CONFIDENTIAL: GREEN

Assessment of the firm’s past, present and
future financial conditions
Done to find firm’s financial strengths and
weaknesses
Primary Tools:
Financial Statements
Comparison of financial ratios to past,
industry, sector and all firms

Objectives of Ratio Analysis
• Standardize financial information for comparisons
• Evaluate current operations
• Compare performance with past performance
• Compare performance against other firms or
industry standards
• Study the efficiency of operations
• Study the risk of operations

CAT Balance sheets 2010 – 2014 in Million USD
Assets
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Cash and short-term investments 7,341 6,081 5,490 3,057 3,592
Accounts recievable 16,764 17,176 18,952 17,953 16,792
Deferred and refundable income taxes 1,739 1,553 1,547 1,580 931
Prepaid expenses and other current assets 818 900 988 994 908
Inventories 12,205 12,625 15,547 14,544 9,587
Current assets 38,867 38,335 42,524 38,128 31,810
Property, plant and equipment, net 16,577 17,075 16,461 14,395 12,539
Long-term recievable accounts 16,008 16,323 15,345 13,078 12,057
Long term investment 257 272 272 133 164
Noncurrent deferred and refundable income taxes 1,404 594 2,011 2,157 2,493
Intengible assets 9,770 10,552 10,958 11,448 3,419
Other assets 1,798 1,745 1,785 2,107 1,538
Noncurrent assets 45,814 46,561 46,832 43,318 32,210
Total assets 84,681 84,896 89,356 81,446 64,020

CAT Balance sheets 2010 – 2014 in Million USD cont’d
liabilities & Stockholders' equity Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Short-term borrowings
Machinery, Energy & Transportation 9 16 636 93 204
Financial Products 4,699 3,663 4,651 3,895 3,852
Long-term debt due within one year
Accrued expenses 3,548 3,493 3,667 3,386 2,880
Accrued wages, salaries and employee benefits 2,438 1,622 1,911 2,410 1,670
Customer advances ( unearned revenues ) 1,697 2,360 2,978 2,691 1,831
Dividends payable 424 382 – 298 281
Other current liabilities 1,754 1,849 2,055 1,967 1,521
Machinery, Energy & Transportation 510 760 1,113 558 495
Current liabilities 27,877 27,297 29,755 28,561 22,020
Long-term debt due after one year
Machinery, Energy & Transportation 9,493 7,999 8,666 8,415 4,505
Liability for postemployment benefits 8,963 6,973 11,085 10,956 7,584
Other liabilities 3,231 3,029 3,182 3,583 2,654
Noncurrent liabilities 39,978 36,721 42,019 39,483 30,675
Total liabilities 67,855 64,018 71,774 68,044 52,695

CAT Balance sheets 2010 – 2014 in Million USD cont’d
Stockholders' equity Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Redeemable noncontrolling interest – – – 473 461
Common stock of $1.00 par, at paid-in amount 5,016 4,709 4,481 4,273 3,888
Treasury stock, at cost -15,726 -11,854 -10,074 -10,281 -10,397
Profit employed in the business 33,887 31,854 29,558 25,219 21,384
Accumulated other comprehensive loss -6,431 -3,898 -6,433 -6,328 -4,051
Equity attributable to common stockholders 16,746 20,811 17,532 12,883 10,824
Noncontrolling interests 80 67 50 46 40
Total stockholders' equity 16,826 20,878 17,582 12,929 11,325
Total liabilities, and stockholders' equity 84,681 84,896 89,356 81,446 64,020

Trend Analysis
1099
2035
2854
3537 3541 3557
895
3963
7153
8573
5628
5328
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
inMillionUSD

Assets Analysis 2010 – 2011 in Million USD
Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Cash and short-term investments 3,057 3,592 -15% 4% 6%
Accounts receivable 17,953 16,792 7% 22% 26%
Deferred and refundable income taxes 1,580 931 70% 2% 1%
Prepaid expenses and other current assets 994 908 9% 1% 1%
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Property, plant and equipment, net 14,395 12,539 15% 18% 20%
Long-term receivable accounts 13,078 12,057 8% 16% 19%
Long term investment 133 164 -19% 0% 0%
Noncurrent deferred and refundable income taxes 2,157 2,493 -13% 3% 4%
Intengible assets 11,448 3,419 235% 14% 5%
Other assets 2,107 1,538 37% 3% 2%
Noncurrent assets 43,318 32,210 34% 53% 50%
0% 0%
Total assets 81,446 64,020 27% 100% 100%

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
cash dropped by 15% in 2011 representing
4% of total assets instead of 6% in 2010

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
sales on account increased by 7% which
reflected on the cash ( longer period of
sales turnover )

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
the refundable income tax has increased
dramatically with 70%

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
Company had stocked inventories with more
than 50% in 2011 , increasing its share in total
assets from 15% to 18%

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
Although Plant Property & Equips increased by
15% , however their share of total assets
dropped by 2% to be become 18%

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Intangible assets 11,448 3,419 235% 14% 5%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
Intangible assets increment was more than a double ,
this gives an indication of very good reputation ,
great marketing campaigns and definitely an in
crease in the company stocks

Assets
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Inventories 14,544 9,587 52% 18% 15%
Current assets 38,128 31,810 20% 47% 50%
Intangible assets 11,448 3,419 235% 14% 5%
Other assets 2,107 1,538 37% 3% 2%
0% 0%
Total assets 81,446 64,020 27% 100% 100%
Total Assets increased by 27%

0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Dec 31, 2011
Dec 31, 2010

Liabilities & SE Analysis 2010 – 2011 in
Million USD cont’d
liabilities & Stockholders' equity
Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Machinery, Energy & Transportation 93 204 -54% 0% 0%
Financial Products 3,895 3,852 1% 5% 6%
Accrued expenses 3,386 2,880 18% 4% 4%
Accrued wages, salaries and employee benefits 2,410 1,670 44% 3% 3%
Customer advances ( unearned revenues ) 2,691 1,831 47% 3% 3%
Dividends payable 298 281 6% 0% 0%
Other current liabilities 1,967 1,521 29% 2% 2%
Machinery, Energy & Transportation 558 495 13% 1% 1%
0% 0%
Current liabilities 28,561 22,020 30% 35% 34%
0% 0%
Machinery, Energy & Transportation 8,415 4,505 87% 10% 7%
Liability for postemployment benefits 10,956 7,584 44% 13% 12%
Other liabilities 3,583 2,654 35% 4% 4%
Noncurrent liabilities 39,483 30,675 29% 48% 48%
0% 0%
Total liabilities 68,044 52,695 29% 84% 82%

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
0% 0%
0% 0%
0% 0%
Accrued expenses increased by 18%

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
0% 0%
0% 0%
0% 0%
Accrued employee wages &
benefits increased by 44%

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
0% 0%
0% 0%
0% 0%
Customer advances increased by
47 %

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
0% 0%
0% 0%
0% 0%
CAT Finance products increased
by 47 %

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
0% 0%
0% 0%
0% 0%
Postemployment liabilities
increased by 44 %

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
0% 0%
0% 0%
0% 0%
Total liabilities increased by 29%
while keeping each item of liabilities
vertically almost the same

Dec 31, 2011 Dec 31, 2010
Horizontal
Analyasis
Vertical
2011
Vertical
2010
Redeemable non controlling interest 473 461 3% 1% 1%
Common stock of $1.00 par, at paid-in amount 4,273 3,888 10% 5% 6%
Treasury stock, at cost -10,281 -10,397 -1% -13% -16%
Profit employed in the business 25,219 21,384 18% 31% 33%
Accumulated other comprehensive loss -6,328 -4,051 56% -8% -6%
Equity attributable to common stockholders 12,883 10,824 19% 16% 17%
Noncontrolling interests 46 40 15% 0% 0%
Total stockholders' equity 12,929 11,325 14% 16% 18%
0% 0%
Total liabilities, and stockholders' equity 81,446 64,020 27% 100% 100%
SE increased by 14% and
Liabilities + SE by 27%[

Liabilities & SE Analysis 2010 – 2011 in Million
USD cont’d
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Dec 31, 2011
Dec 31, 2010

SE Analysis 2010 – 2011 in Million USD cont’d
Redeemable
noncontrolling
interest
Common stock
of $1.00 par, at
paid-in amount
Treasury stock,
at cost
Profit employed
in the business
Accumulated
other
comprehensive
loss
Equity
attributable to
common
stockholders
Noncontrolling
interests
Total
stockholders'
equity
2011 473 4,273 -10,281 25,219 -6,328 12,883 46 12,929
2010 461 3,888 -10,397 21,384 -4,051 10,824 40 11,325
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
2011
2010

USD $ in millions
Balance sheet
Assets
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Horizontal Analyasis Vertical 2011 Vertical 2010
Cash and short-term investments 7,341 6,081 5,490 3,057 3,592 -15% 4% 6%
Accounts receivable 16,764 17,176 18,952 17,953 16,792 7% 22% 26%
Deferred and refundable income taxes 1,739 1,553 1,547 1,580 931 70% 2% 1%
Prepaid expenses and other current assets 818 900 988 994 908 9% 1% 1%
Inventories 12,205 12,625 15,547 14,544 9,587 52% 18% 15%
Current assets 38,867 38,335 42,524 38,128 31,810 20% 47% 50%
Property, plant and equipment, net 16,577 17,075 16,461 14,395 12,539 15% 18% 20%
Long-term recievable accounts 16,008 16,323 15,345 13,078 12,057 8% 16% 19%
Long term investment 257 272 272 133 164 -19% 0% 0%
Noncurrent deferred and refundable income taxes 1,404 594 2,011 2,157 2,493 -13% 3% 4%
Intengible assets 9,770 10,552 10,958 11,448 3,419 235% 14% 5%
Other assets 1,798 1,745 1,785 2,107 1,538 37% 3% 2%
Noncurrent assets 45,814 46,561 46,832 43,318 32,210 34% 53% 50%
0% 0%
Total assets 84,681 84,896 89,356 81,446 64,020 27% 100% 100%
Machinery, Energy & Transportation 9 16 636 93 204 -54% 0% 0%
Financial Products 4,699 3,663 4,651 3,895 3,852 1% 5% 6%
Long-term debt due within one year 0% 0%
Accrued expenses 3,548 3,493 3,667 3,386 2,880 18% 4% 4%
Accrued wages, salaries and employee benefits 2,438 1,622 1,911 2,410 1,670 44% 3% 3%
Customer advances ( unearned revenues ) 1,697 2,360 2,978 2,691 1,831 47% 3% 3%
Dividends payable 424 382 – 298 281 6% 0% 0%
Other current liabilities 1,754 1,849 2,055 1,967 1,521 29% 2% 2%
Machinery, Energy & Transportation 510 760 1,113 558 495 13% 1% 1%
0% 0%
Current liabilities 27,877 27,297 29,755 28,561 22,020 30% 35% 34%
0% 0%
Long-term debt due after one year 0% 0%
Machinery, Energy & Transportation 9,493 7,999 8,666 8,415 4,505 87% 10% 7%
Liability for postemployment benefits 8,963 6,973 11,085 10,956 7,584 44% 13% 12%
Other liabilities 3,231 3,029 3,182 3,583 2,654 35% 4% 4%
Noncurrent liabilities 39,978 36,721 42,019 39,483 30,675 29% 48% 48%
0% 0%
Total liabilities 67,855 64,018 71,774 68,044 52,695 29% 84% 82%
0% 0%
Stockholders' equity 0% 0%
Redeemable noncontrolling interest – – – 473 461 3% 1% 1%
Common stock of $1.00 par, at paid-in amount 5,016 4,709 4,481 4,273 3,888 10% 5% 6%
Treasury stock, at cost -15,726 -11,854 -10,074 -10,281 -10,397 -1% -13% -16%
Profit employed in the business 33,887 31,854 29,558 25,219 21,384 18% 31% 33%
Accumulated other comprehensive loss -6,431 -3,898 -6,433 -6,328 -4,051 56% -8% -6%
Equity attributable to common stockholders 16,746 20,811 17,532 12,883 10,824 19% 16% 17%
Noncontrolling interests 80 67 50 46 40 15% 0% 0%
Total stockholders' equity 16,826 20,878 17,582 12,929 11,325 14% 16% 18%
0% 0%
Total liabilities, and stockholders' equity 84,681 84,896 89,356 81,446 64,020 27% 100% 100%

USD $ in millions
Balance sheet
Assets
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Horizontal Analyasis Vertical 2011 Vertical 2010
Cash and short-term investments 7,341 6,081 5,490 3,057 3,592 -15% 4% 6%
Accounts receivable 16,764 17,176 18,952 17,953 16,792 7% 22% 26%
Deferred and refundable income taxes 1,739 1,553 1,547 1,580 931 70% 2% 1%
Prepaid expenses and other current assets 818 900 988 994 908 9% 1% 1%
Inventories 12,205 12,625 15,547 14,544 9,587 52% 18% 15%
Current assets 38,867 38,335 42,524 38,128 31,810 20% 47% 50%
Property, plant and equipment, net 16,577 17,075 16,461 14,395 12,539 15% 18% 20%
Long-term recievable accounts 16,008 16,323 15,345 13,078 12,057 8% 16% 19%
Long term investment 257 272 272 133 164 -19% 0% 0%
Noncurrent deferred and refundable income taxes 1,404 594 2,011 2,157 2,493 -13% 3% 4%
Intangible assets 9,770 10,552 10,958 11,448 3,419 235% 14% 5%
Other assets 1,798 1,745 1,785 2,107 1,538 37% 3% 2%
Noncurrent assets 45,814 46,561 46,832 43,318 32,210 34% 53% 50%
0% 0%
Total assets 84,681 84,896 89,356 81,446 64,020 27% 100% 100%
Machinery, Energy & Transportation 9 16 636 93 204 -54% 0% 0%
Long-term debt due within one year 0% 0%
Accrued expenses 3,548 3,493 3,667 3,386 2,880 18% 4% 4%
Accrued wages, salaries and employee benefits 2,438 1,622 1,911 2,410 1,670 44% 3% 3%
Customer advances ( unearned revenues ) 1,697 2,360 2,978 2,691 1,831 47% 3% 3%
Dividends payable 424 382 – 298 281 6% 0% 0%
Other current liabilities 1,754 1,849 2,055 1,967 1,521 29% 2% 2%
Machinery, Energy & Transportation 510 760 1,113 558 495 13% 1% 1%
0% 0%
Current liabilities 27,877 27,297 29,755 28,561 22,020 30% 35% 34%
0% 0%
Long-term debt due after one year 0% 0%
Machinery, Energy & Transportation 9,493 7,999 8,666 8,415 4,505 87% 10% 7%
Liability for postemployment benefits 8,963 6,973 11,085 10,956 7,584 44% 13% 12%
Other liabilities 3,231 3,029 3,182 3,583 2,654 35% 4% 4%
Noncurrent liabilities 39,978 36,721 42,019 39,483 30,675 29% 48% 48%
0% 0%
Total liabilities 67,855 64,018 71,774 68,044 52,695 29% 84% 82%
0% 0%
Stockholders' equity 0% 0%
Redeemable noncontrolling interest – – – 473 461 3% 1% 1%
Common stock of $1.00 par, at paid-in amount 5,016 4,709 4,481 4,273 3,888 10% 5% 6%
Treasury stock, at cost -15,726 -11,854 -10,074 -10,281 -10,397 -1% -13% -16%
Profit employed in the business 33,887 31,854 29,558 25,219 21,384 18% 31% 33%
Accumulated other comprehensive loss -6,431 -3,898 -6,433 -6,328 -4,051 56% -8% -6%
Equity attributable to common stockholders 16,746 20,811 17,532 12,883 10,824 19% 16% 17%
Noncontrolling interests 80 67 50 46 40 15% 0% 0%
Total stockholders' equity 16,826 20,878 17,582 12,929 11,325 14% 16% 18%
0% 0%
Total liabilities, and stockholders' equity 84,681 84,896 89,356 81,446 64,020 27% 100% 100%
CAT® invested cash , Financial
products , and sales on credit to
achieve a massive increment in
its market value

Liquidity Ratios
Current Ratio:
33.1
sLiabilitieCurrent
AssetsCurrent
:RatioCurrent 
Years 2010 2011 Industry
Current
Ratio
1.44 1.33 1.26
In 2010, the firm’s ability to cover its current liabilities with its current assets
was 1.44. In 2011, the ratio goes down to 1.33 as compared to 2010, which
means that the company still has the ability to pay its liabilities and it is above
the industry average, as the definition says that higher the ratio, greater the
ability of the firm to pay its bills.

174.0
sLiabilitieCurrent
AssetsQuick
:RatioQuick to
Quick Ratio:
Quick
Ratio
0.93 0.74 .74
According to the definition of the Quick Ratio, the company should have the ability
to pay its liabilities through its most liquid assets. The table shows that in 2010, the
firm has the ratio 0.93 cents. Then we observe that caterpillar deteriorated in
2011. So we can figure out from the ratios that the company has 74 Cents in cash
for every 1 $ in Liabilities.

11.0
sLiabilitieCurrent
sEquivalentCashCash
:RatioQuick 

Cash Ratio:
Quick
Ratio
0.16 0.11 .29
According to the definition of the cash ratio is a measure of the adequacy of the
cash ,. The table shows that in 2010, the firm has the ratio 0.16 cents. Then in 2012
the ratio goes down to .11. So we can figure out from the ratios that Caterpillar Inc
has 11 Cents in cash for every 1 $ of liabilities. This ratio reflects the decrease in
the balance sheet in the cash in 2011.

Receivable Turnover Ratio:
58.5
sReceivableNetAverage
SalesCreditNet
:TurnoverAssetTotal 
Receivables
Turnover
4.69 5.58 6.90
The ratio is supposed to be high. Here we can see that the coca-cola
company’s total asset turn over ratio in 2011 was 0.58, which means that
the company generated more revenue per dollar of asset investment. The
ratio then comes slightly down in 2012.

Average Age of Receivables:
Days5.65
TurnoversReceivable
365
:PeriodCollectionAvg. 
Years 2010 2011
Avg. Collection Period 77.82 65.5
The ability of the firm of collecting the receivables in the specific time. Here
in the year 2010 the turnover in days was almost 78, but the collection days
decrease in the year 2011 and the collection period of approximately 65.5
days is well within the 53 days allowed in the credit terms. This shows that
the collection is faster as compared to the previous year but it is below the
industry Average

Inventory Turnover Ratio:
0.3
InventoryAverage
soldgoodsofCost
:TurnoverInventory 
Inventory
Turnover
3.17 3.0 4.62
The Coca-Cola’s Inventory turnover ratios deteriorated from 2011 to 2012,
which means that its ability to sell inventory has relatively come down. In 2011
Coca-Cola had a ratio of 5.90 and in 2012 has a ratio of 5.80. These ratios are not
what we expected; we assumed that the ratios would be much higher because
Coca-Cola sell its syrup to bottling partners around the world so it does not need
to deal with the storing of the bottled product.

Average days supply in inventory:
s67.121
TurnoverInventory
365
:PeriodPaymentAvg. Day
Avg. days supply in inventory
(days)
115 122 79
This ratio measures the average number of days it takes to sell the
inventory. Caterpillar Inc. is taking a 122 days in its cycle of inventory to
be sold it is also obvious in the horizontal change in the inventory in the
balance sheet by 52%, and it is below the industry average; so this means
that caterpillar is doing fine because its rate of sales is much higher than
the inventory amounts.

Profitability Ratios
Profit Margin:
%59.8
SalesNet
IncomeNet
:MarginProfit 
Profit Margin % 6.77% 8.59% 9.10%
The ratio should be high according to the definition. Because higher the ratio,
higher will be the firm’s ability to produce goods and services at low cost with
high sales. Here in this table there is large difference between the ratios in two
years, but its still higher the industry average.

Return on Equity:
Return on Equity % 24.94% 38.25% 20.59%
Every dollar invested by stockholders generates 38.25 cents the ratio shows the
investors how well the company management are utilizing the owner supplied
Capital; Comparing to the industry average we found that Caterpillar Inc. ratios
almost double the industry average.
38.25%
EquityStocholderAvg
IncomeNet
:EquityonReturn 

Return on Assets:
6.05%
assetstotalAverage
Exp.InterestIncomeNet
:AssetsonReturn 


These ratios represent in 2010 Ratio of the net income to the average total
assets was 4.22%, then in 2011 it slightly improved to 6.05% Each Dollar in the
assets generates 6.05 cents in Profit this Measures the productivity of the
Company, Caterpillar Inc. is below the Industry Average for the same sector.
Return on Equity % 4.22% 6.05% 7.20%

The Financial Leverage:
%2.32ROA-ROELeverageFinancialThe 
The Financial
Leverage %
20.72 32.2 24.5
The Financial Leverage increase by around 52% from 2010 to 2011, and the
financial leverage describes the relationship between the return on equity
and the return on assets, so that caterpillar Inc. incerased its liabiliteis by
taking Financial credit from creditor but the enhancement in this ratio
caused by the effective borrowing at low rates of Interest

Earning Per Share:
%61.7
SharesofNo.Avg
IncomeNet
SharePerEarnings 
EPS % 4.23 7.61 7.1
This Ratio measures the return of investments based on the number of
shares , On Caterpillar Inc. it gives in 2011 7.6$ per share. And it is much
improved rather than 2010 it was 4.23. and it is above the industry
average an it revealed from the drop was in the last year.

Quality of Income:
times422.1
IncomeNet
ActivityoperatingfromflowCash
IncomeofQuality 
Quality of
Income
1.85 1.422 1.2
This ratio indicates that the cash from the operating activity to the Net
Income decreased from 2010 that was 1.85 to 1.422 in 2011 that is because
Caterpillar increased its liabilities in 2011 but the company still above the
industry average.

Profit Margin:
%59.8
SalesNet
IncomeNet
:MarginProfit 
Profit
Margin %
6.77% 8.59% 9.10%
The profit margin measures the percentage of each sales dollar, on average,
that represents profit.
Caterpillar Inc its profit margin in 2010 was 6.77% and its improved in 2011
to 8.59% and this is a good indicator of operating efficiency it does not
consider the resources so the company is still below the industry average so
it needs to improve its efficiency to increase its net sales and that what
happened in the 2012

Fixed Asset Turnover:
99.3
AssetsFixedNetAvg.
RevenueSalesNet
TurnoverAssetsFixed 
Fixed Asset
Turnover
3.18 3.99 4.30
This ratio measures a company’s ability to generate sales given an investment
in fixed assets. For each dollar Caterpillar Inc.+ invested in property, plant,
and equipment, the company was able to earn 3.99$, In 2010 the company
fixed asset turnover was 3.18 then it slightly improved in 2011 to be 3.99 but
it is still in progress towards the industry average.

Times Interest Earned:
Times98.17
ExpenseInterest
ExpenseTaxIncomeExpensesInterestIncomeNet
EarnedInterestTimes 


Times Interest Earned 11.93 17.98 15.75
Solvency Ratios
Caterpillar Inc. Times Interest Earned was in 2010 was 11.93
in increased in 2011 to b nearly 18 times, So Caterpillar has
18 dollars in income for each 1$ of Interest Expense and this
high ratio that indicates a secure position for creditors.

Cash Coverage Ratio:
2.23
PaidInterest
Taxes&Interestbefore
ActivitiesoperatingflowCash
:CoverageCash 
Years 2010 2011
Cash Coverage 18.67 23.2
The cash coverage ratio compares the cash generated by a company to its
cash obligations for the period, Caterpillar Inc. Times Interest Earned
was in 2010 was 18.67 increased in 2011 to b nearly 23.2 times, So
Caterpillar has 23.2 dollars in income for each 1$ of Interest Expense
and this high ratio that indicates a secure position for creditors.

Debt to Equity Ratio:
Years 2010 2011
Debt to Equity 4.65 5.26
The debt-to-equity ratio expresses a company’s debt as a proportion of its
stockholders’ equity, here in Caterpillar Inc. it is a company that rely on
liabilities more than the stockholder equity, it is obvious in the above
ratios in 2011 the Debt to equity was 4.65 then it slightly increased to
5.26, Caterpillar had changed its strategy like most companies because
the advantage of the financial leverage.
26.5
equityrStockholde
sLiabilitieTotal
:EquityDebt to 

Conclusion
After applying all the ratios we got an idea that the Coca
Cola Company is a profitable firm. Because through out
the analysis of two years, we found that the company is
getting profitable return on short term and long term
investment, their profit margin has been increased as well
and they are in the position to pay their debts with in their
resources.

Caterpillar Financial Profile Analysis

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Caterpillar Financial Profile Analysis

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