Inventories are stated at the lower of cost or market. Cost is principally determined using the last-in, first-out (LIFO) method. The value of inventories on the LIFO basis represented about 65% of total inventories at December 31, 2011, and about 70% of total inventories at December 31, 2010 and 2009.
Source: Caterpillar Inc., Annual Report
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Caterpillar Inc., Statement of Financial Position, Inventory
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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Raw materials | |
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Work-in-process | |
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Finished goods | |
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Supplies | |
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Inventories | |
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Source: Based on data from Caterpillar Inc. Annual Reports
| Item | Description | The company |
|---|---|---|
| Raw materials | Carrying amount as of the balance sheet date of unprocessed items to be consumed in the manufacturing or production process. Also includes purchased parts that will be used as components of a finished product. | Caterpillar Inc.'s raw materials increased from 2009 to 2010 and from 2010 to 2011. |
| Work-in-process | Carrying amount as of the balance sheet date of merchandise or goods which are partially completed, are generally comprised of raw materials, labor and factory overhead costs, and which require further materials, labor and overhead to be converted into finished goods, and which generally require the use of estimates to determine percentage complete and pricing. | Caterpillar Inc.'s work-in-process increased from 2009 to 2010 and from 2010 to 2011. |
| Finished goods | Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. | Caterpillar Inc.'s finished goods increased from 2009 to 2010 and from 2010 to 2011. |
| Supplies | Carrying amount as of the balance sheet date of products used directly or indirectly in the manufacturing or production process, which may or may not become part of the final product. May also include items used in the storage, presentation or transportation of physical goods. | Caterpillar Inc.'s supplies declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level. |
| Inventories | Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). | Caterpillar Inc.'s inventories increased from 2009 to 2010 and from 2010 to 2011. |
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Adjusting LIFO Inventory to FIFO (Current) Cost
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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| Adjustment to Inventories | ||||||
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Inventories at LIFO (as reported) | |
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Add: LIFO reserve, ending balance | |
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Inventories at FIFO (adjusted) | |
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| Adjustment to Current Assets | ||||||
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Current assets (as reported) | |
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Add: LIFO reserve, ending balance | |
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Current assets (adjusted) | |
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| Adjustment to Total Assets | ||||||
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Total assets (as reported) | |
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Add: LIFO reserve, ending balance | |
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Total assets (adjusted) | |
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| Adjustment to Equity Attributable To Common Stockholders | ||||||
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Equity attributable to common stockholders (as reported) | |
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Add: LIFO reserve, ending balance | |
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Equity attributable to common stockholders (adjusted) | |
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| Adjustment to Profit Attributable To Common Stockholders | ||||||
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Profit attributable to common stockholders (as reported) | |
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Add: Increase (decrease) in LIFO reserve, ending balance | |
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Profit attributable to common stockholders (adjusted) | |
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Caterpillar Inc.'s inventory value on Dec 31, 2011 would be $16,966 (in millions) if the FIFO inventory method was used instead of LIFO. Caterpillar Inc.'s inventories, valued on a LIFO basis, on Dec 31, 2011 were $14,544 . Caterpillar Inc.'s inventories would have been $2,422 higher than reported on Dec 31, 2011 if the FIFO method had been used instead.
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Caterpillar Inc., adjusted ratios
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Current Ratio | ||||||
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Reported current ratio (LIFO) | |
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Adjusted current ratio (FIFO) | |
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| Net Profit Margin | ||||||
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Reported net profit margin (LIFO) | % |
% |
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Adjusted net profit margin (FIFO) | % |
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| Total Asset Turnover | ||||||
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Reported total asset turnover (LIFO) | |
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Adjusted total asset turnover (FIFO) | |
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| Financial Leverage | ||||||
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Reported financial leverage (LIFO) | |
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Adjusted financial leverage (FIFO) | |
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| Return on Equity (ROE) | ||||||
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Reported ROE (LIFO) | % |
% |
% |
% |
% |
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Adjusted ROE (FIFO) | % |
% |
% |
% |
% |
| Return on Assets (ROA) | ||||||
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Reported ROA (LIFO) | % |
% |
% |
% |
% |
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Adjusted ROA (FIFO) | % |
% |
% |
% |
% |
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Caterpillar Inc.'s adjusted current ratio improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011. |
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Caterpillar Inc.'s adjusted net profit margin improved from 2009 to 2010 and from 2010 to 2011. |
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Caterpillar Inc.'s adjusted total asset turnover improved from 2009 to 2010 and from 2010 to 2011. |
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Caterpillar Inc.'s adjusted financial leverage declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Caterpillar Inc.'s adjusted ROE improved from 2009 to 2010 and from 2010 to 2011. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Caterpillar Inc.'s adjusted ROA improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Current assets (USD $ in millions) | |
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Current liabilities (USD $ in millions) | |
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Current ratio1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted current assets (USD $ in millions) | |
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Current liabilities (USD $ in millions) | |
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Adjusted current ratio2 | |
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2011 Calculations
1 Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Caterpillar Inc.'s adjusted current ratio improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Profit attributable to common stockholders (USD $ in millions) | |
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Sales and revenues (USD $ in millions) | |
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Net profit margin1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted profit attributable to common stockholders (USD $ in millions) | |
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Sales and revenues (USD $ in millions) | |
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Adjusted net profit margin2 | % |
% |
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2011 Calculations
1 Net profit margin = 100 × Profit attributable to common stockholders ÷ Sales and revenues
= 100 × ÷ = %
2 Adjusted net profit margin = 100 × Adjusted profit attributable to common stockholders ÷ Sales and revenues
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Caterpillar Inc.'s adjusted net profit margin improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Sales and revenues (USD $ in millions) | |
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Total assets (USD $ in millions) | |
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Total asset turnover1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Sales and revenues (USD $ in millions) | |
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Adjusted total assets (USD $ in millions) | |
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Adjusted total asset turnover2 | |
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2011 Calculations
1 Total asset turnover = Sales and revenues ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Sales and revenues ÷ Adjusted total assets
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Caterpillar Inc.'s adjusted total asset turnover improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Total assets (USD $ in millions) | |
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Equity attributable to common stockholders (USD $ in millions) | |
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Financial leverage1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted total assets (USD $ in millions) | |
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Adjusted equity attributable to common stockholders (USD $ in millions) | |
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Adjusted financial leverage2 | |
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2011 Calculations
1 Financial leverage = Total assets ÷ Equity attributable to common stockholders
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to common stockholders
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Caterpillar Inc.'s adjusted financial leverage declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Profit attributable to common stockholders (USD $ in millions) | |
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Equity attributable to common stockholders (USD $ in millions) | |
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ROE1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted profit attributable to common stockholders (USD $ in millions) | |
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Adjusted equity attributable to common stockholders (USD $ in millions) | |
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Adjusted ROE2 | % |
% |
% |
% |
% |
2011 Calculations
1 ROE = 100 × Profit attributable to common stockholders ÷ Equity attributable to common stockholders
= 100 × ÷ = %
2 Adjusted ROE = 100 × Adjusted profit attributable to common stockholders ÷ Adjusted equity attributable to common stockholders
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Caterpillar Inc.'s adjusted ROE improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Profit attributable to common stockholders (USD $ in millions) | |
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Total assets (USD $ in millions) | |
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ROA1 | % |
% |
% |
% |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted profit attributable to common stockholders (USD $ in millions) | |
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Adjusted total assets (USD $ in millions) | |
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Adjusted ROA2 | % |
% |
% |
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2011 Calculations
1 ROA = 100 × Profit attributable to common stockholders ÷ Total assets
= 100 × ÷ = %
2 Adjusted ROA = 100 × Adjusted profit attributable to common stockholders ÷ Adjusted total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Caterpillar Inc.'s adjusted ROA improved from 2009 to 2010 and from 2010 to 2011. |
May 23, 2012