Stock Analysis on Net

Caterpillar Inc. (NYSE:CAT)

Analysis of Inventory

Microsoft Excel

Inventory Disclosure

Caterpillar Inc., balance sheet: inventory

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Raw materials 6,492 6,370 5,528 4,021 4,263
Work-in-process 1,411 1,452 1,318 1,052 1,147
Finished goods 8,308 8,138 6,907 6,054 5,598
Supplies 354 310 285 275 258
Inventories 16,565 16,270 14,038 11,402 11,266

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Inventories Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Caterpillar Inc. inventories increased from 2021 to 2022 and from 2022 to 2023.

Adjustment to Inventory: Conversion from LIFO to FIFO

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Inventories
Inventories at LIFO (as reported) 16,565 16,270 14,038 11,402 11,266
Add: Inventory LIFO reserve 3,423 3,321 2,599 2,132 2,086
Inventories at FIFO (adjusted) 19,988 19,591 16,637 13,534 13,352
Adjustment to Current Assets
Current assets (as reported) 46,949 43,785 43,455 39,464 39,193
Add: Inventory LIFO reserve 3,423 3,321 2,599 2,132 2,086
Current assets (adjusted) 50,372 47,106 46,054 41,596 41,279
Adjustment to Total Assets
Total assets (as reported) 87,476 81,943 82,793 78,324 78,453
Add: Inventory LIFO reserve 3,423 3,321 2,599 2,132 2,086
Total assets (adjusted) 90,899 85,264 85,392 80,456 80,539
Adjustment to Equity Attributable To Common Shareholders
Equity attributable to common shareholders (as reported) 19,494 15,869 16,484 15,331 14,588
Add: Inventory LIFO reserve 3,423 3,321 2,599 2,132 2,086
Equity attributable to common shareholders (adjusted) 22,917 19,190 19,083 17,463 16,674
Adjustment to Profit Attributable To Common Stockholders
Profit attributable to common stockholders (as reported) 10,335 6,705 6,489 2,998 6,093
Add: Increase (decrease) in inventory LIFO reserve 102 722 467 46 77
Profit attributable to common stockholders (adjusted) 10,437 7,427 6,956 3,044 6,170

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Caterpillar Inc. inventory value on Dec 31, 2023 would be $19,988 (in millions) if the FIFO inventory method was used instead of LIFO. Caterpillar Inc. inventories, valued on a LIFO basis, on Dec 31, 2023 were $16,565. Caterpillar Inc. inventories would have been $3,423 higher than reported on Dec 31, 2023 if the FIFO method had been used instead.


Caterpillar Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Caterpillar Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current Ratio
Reported current ratio (LIFO) 1.35 1.39 1.46 1.53 1.47
Adjusted current ratio (FIFO) 1.45 1.49 1.54 1.62 1.55
Net Profit Margin
Reported net profit margin (LIFO) 16.18% 11.85% 13.47% 7.68% 12.00%
Adjusted net profit margin (FIFO) 16.34% 13.13% 14.44% 7.80% 12.16%
Total Asset Turnover
Reported total asset turnover (LIFO) 0.73 0.69 0.58 0.50 0.65
Adjusted total asset turnover (FIFO) 0.70 0.66 0.56 0.49 0.63
Financial Leverage
Reported financial leverage (LIFO) 4.49 5.16 5.02 5.11 5.38
Adjusted financial leverage (FIFO) 3.97 4.44 4.47 4.61 4.83
Return on Equity (ROE)
Reported ROE (LIFO) 53.02% 42.25% 39.37% 19.56% 41.77%
Adjusted ROE (FIFO) 45.54% 38.70% 36.45% 17.43% 37.00%
Return on Assets (ROA)
Reported ROA (LIFO) 11.81% 8.18% 7.84% 3.83% 7.77%
Adjusted ROA (FIFO) 11.48% 8.71% 8.15% 3.78% 7.66%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Caterpillar Inc. adjusted current ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Caterpillar Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Caterpillar Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
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. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Caterpillar Inc. adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Caterpillar Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

Caterpillar Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Current assets 46,949 43,785 43,455 39,464 39,193
Current liabilities 34,728 31,531 29,847 25,717 26,621
Liquidity Ratio
Current ratio1 1.35 1.39 1.46 1.53 1.47
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets 50,372 47,106 46,054 41,596 41,279
Current liabilities 34,728 31,531 29,847 25,717 26,621
Liquidity Ratio
Adjusted current ratio2 1.45 1.49 1.54 1.62 1.55

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 46,949 ÷ 34,728 = 1.35

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 50,372 ÷ 34,728 = 1.45

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Caterpillar Inc. adjusted current ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Profit attributable to common stockholders 10,335 6,705 6,489 2,998 6,093
Sales of Machinery, Energy & Transportation 63,869 56,574 48,188 39,022 50,755
Profitability Ratio
Net profit margin1 16.18% 11.85% 13.47% 7.68% 12.00%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted profit attributable to common stockholders 10,437 7,427 6,956 3,044 6,170
Sales of Machinery, Energy & Transportation 63,869 56,574 48,188 39,022 50,755
Profitability Ratio
Adjusted net profit margin2 16.34% 13.13% 14.44% 7.80% 12.16%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Profit attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 10,335 ÷ 63,869 = 16.18%

2 Adjusted net profit margin = 100 × Adjusted profit attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 10,437 ÷ 63,869 = 16.34%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Caterpillar Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Sales of Machinery, Energy & Transportation 63,869 56,574 48,188 39,022 50,755
Total assets 87,476 81,943 82,793 78,324 78,453
Activity Ratio
Total asset turnover1 0.73 0.69 0.58 0.50 0.65
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Sales of Machinery, Energy & Transportation 63,869 56,574 48,188 39,022 50,755
Adjusted total assets 90,899 85,264 85,392 80,456 80,539
Activity Ratio
Adjusted total asset turnover2 0.70 0.66 0.56 0.49 0.63

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Sales of Machinery, Energy & Transportation ÷ Total assets
= 63,869 ÷ 87,476 = 0.73

2 Adjusted total asset turnover = Sales of Machinery, Energy & Transportation ÷ Adjusted total assets
= 63,869 ÷ 90,899 = 0.70

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Caterpillar Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 87,476 81,943 82,793 78,324 78,453
Equity attributable to common shareholders 19,494 15,869 16,484 15,331 14,588
Solvency Ratio
Financial leverage1 4.49 5.16 5.02 5.11 5.38
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets 90,899 85,264 85,392 80,456 80,539
Adjusted equity attributable to common shareholders 22,917 19,190 19,083 17,463 16,674
Solvency Ratio
Adjusted financial leverage2 3.97 4.44 4.47 4.61 4.83

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Equity attributable to common shareholders
= 87,476 ÷ 19,494 = 4.49

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to common shareholders
= 90,899 ÷ 22,917 = 3.97

Solvency 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. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Profit attributable to common stockholders 10,335 6,705 6,489 2,998 6,093
Equity attributable to common shareholders 19,494 15,869 16,484 15,331 14,588
Profitability Ratio
ROE1 53.02% 42.25% 39.37% 19.56% 41.77%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted profit attributable to common stockholders 10,437 7,427 6,956 3,044 6,170
Adjusted equity attributable to common shareholders 22,917 19,190 19,083 17,463 16,674
Profitability Ratio
Adjusted ROE2 45.54% 38.70% 36.45% 17.43% 37.00%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Profit attributable to common stockholders ÷ Equity attributable to common shareholders
= 100 × 10,335 ÷ 19,494 = 53.02%

2 Adjusted ROE = 100 × Adjusted profit attributable to common stockholders ÷ Adjusted equity attributable to common shareholders
= 100 × 10,437 ÷ 22,917 = 45.54%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Caterpillar Inc. adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Profit attributable to common stockholders 10,335 6,705 6,489 2,998 6,093
Total assets 87,476 81,943 82,793 78,324 78,453
Profitability Ratio
ROA1 11.81% 8.18% 7.84% 3.83% 7.77%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted profit attributable to common stockholders 10,437 7,427 6,956 3,044 6,170
Adjusted total assets 90,899 85,264 85,392 80,456 80,539
Profitability Ratio
Adjusted ROA2 11.48% 8.71% 8.15% 3.78% 7.66%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Profit attributable to common stockholders ÷ Total assets
= 100 × 10,335 ÷ 87,476 = 11.81%

2 Adjusted ROA = 100 × Adjusted profit attributable to common stockholders ÷ Adjusted total assets
= 100 × 10,437 ÷ 90,899 = 11.48%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Caterpillar Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.