Stock Analysis on Net
Stock Analysis on Net
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Caterpillar Inc. (NYSE:CAT)

Analysis of Investments

Advanced level

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Caterpillar Inc., adjustment to profit (loss) attributable to common stockholders

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Profit (loss) attributable to common stockholders (as reported) 2,998  6,093  6,147  754  (67)
Add: Available-for-sale securities 34  35  (12) (24) (5)
Profit (loss) attributable to common stockholders (adjusted) 3,032  6,128  6,135  730  (72)

Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).


Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Caterpillar Inc., adjusted profitability ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 7.68% 12.00% 11.86% 1.77% -0.19%
Adjusted net profit margin 7.77% 12.07% 11.84% 1.71% -0.20%
Return on Equity (ROE)
Reported ROE 19.56% 41.77% 43.79% 5.50% -0.51%
Adjusted ROE 19.78% 42.01% 43.70% 5.33% -0.55%
Return on Assets (ROA)
Reported ROA 3.83% 7.77% 7.83% 0.98% -0.09%
Adjusted ROA 3.87% 7.81% 7.81% 0.95% -0.10%

Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).

Profitability 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 ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Caterpillar Inc.’s adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Caterpillar Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020.

Caterpillar Inc., Profitability Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Profit (loss) attributable to common stockholders 2,998  6,093  6,147  754  (67)
Sales of Machinery, Energy & Transportation 39,022  50,755  51,822  42,676  35,773 
Profitability Ratio
Net profit margin1 7.68% 12.00% 11.86% 1.77% -0.19%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted profit (loss) attributable to common stockholders 3,032  6,128  6,135  730  (72)
Sales of Machinery, Energy & Transportation 39,022  50,755  51,822  42,676  35,773 
Profitability Ratio
Adjusted net profit margin2 7.77% 12.07% 11.84% 1.71% -0.20%

Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).

2020 Calculations

1 Net profit margin = 100 × Profit (loss) attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 2,998 ÷ 39,022 = 7.68%

2 Adjusted net profit margin = 100 × Adjusted profit (loss) attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 3,032 ÷ 39,022 = 7.77%

Profitability 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 ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Return on Equity (ROE)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Profit (loss) attributable to common stockholders 2,998  6,093  6,147  754  (67)
Equity attributable to common stockholders 15,331  14,588  14,039  13,697  13,137 
Profitability Ratio
ROE1 19.56% 41.77% 43.79% 5.50% -0.51%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted profit (loss) attributable to common stockholders 3,032  6,128  6,135  730  (72)
Equity attributable to common stockholders 15,331  14,588  14,039  13,697  13,137 
Profitability Ratio
Adjusted ROE2 19.78% 42.01% 43.70% 5.33% -0.55%

Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).

2020 Calculations

1 ROE = 100 × Profit (loss) attributable to common stockholders ÷ Equity attributable to common stockholders
= 100 × 2,998 ÷ 15,331 = 19.56%

2 Adjusted ROE = 100 × Adjusted profit (loss) attributable to common stockholders ÷ Equity attributable to common stockholders
= 100 × 3,032 ÷ 15,331 = 19.78%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Caterpillar Inc.’s adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Profit (loss) attributable to common stockholders 2,998  6,093  6,147  754  (67)
Total assets 78,324  78,453  78,509  76,962  74,704 
Profitability Ratio
ROA1 3.83% 7.77% 7.83% 0.98% -0.09%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted profit (loss) attributable to common stockholders 3,032  6,128  6,135  730  (72)
Total assets 78,324  78,453  78,509  76,962  74,704 
Profitability Ratio
Adjusted ROA2 3.87% 7.81% 7.81% 0.95% -0.10%

Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).

2020 Calculations

1 ROA = 100 × Profit (loss) attributable to common stockholders ÷ Total assets
= 100 × 2,998 ÷ 78,324 = 3.83%

2 Adjusted ROA = 100 × Adjusted profit (loss) attributable to common stockholders ÷ Total assets
= 100 × 3,032 ÷ 78,324 = 3.87%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Caterpillar Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020.