Common-Size Income Statement
Paying user area
Try for free
Caterpillar Inc. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Caterpillar Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Caterpillar Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The common-size income statement reveals several noteworthy trends over the five-year period. A significant improvement in gross margin is observed, alongside fluctuations in operating expenses and other income components, ultimately impacting profitability. The analysis below details these observations.
- Gross Profitability
- Gross margin, expressed as a percentage of sales, demonstrates a consistent upward trend from 26.30% in 2021 to a peak of 34.49% in 2024, before decreasing slightly to 30.05% in 2025. This suggests improved efficiency in production or pricing strategies during the earlier part of the period. The decrease in 2025 warrants further investigation to determine its cause.
- Operating Expenses
- Selling, general, and administrative expenses remained relatively stable as a percentage of sales, fluctuating between 9.99% and 11.13% over the period. Research and development expenses also exhibited stability, ranging from 3.21% to 3.50%. However, interest expense related to financial products increased substantially from 0.94% to 2.12%, indicating a higher cost of financing these activities.
- Operating Profit
- Operating profit as a percentage of sales increased significantly from 14.27% in 2021 to 21.30% in 2024, mirroring the improvement in gross margin. This positive trend was partially reversed in 2025, with operating profit declining to 17.43%, likely influenced by the decrease in gross margin and the continued rise in interest expense.
- Non-Operating Items
- Several non-operating items contribute to the overall profitability. Investment and interest income showed an increasing trend until 2024, then decreased slightly in 2025. Other income (expense) also fluctuated, with a notable decrease in 2025. Net periodic pension and OPEB income decreased significantly from 2.65% in 2021 to 0.07% in 2023, before increasing again in 2024 and 2025, suggesting changes in pension and OPEB plan management or actuarial assumptions.
- Profitability
- Consolidated profit before taxes followed a similar pattern to operating profit, peaking in 2024 at 21.79% and declining to 18.04% in 2025. The provision for income taxes remained relatively consistent as a percentage of sales, around 3.6%. Profit attributable to common stockholders mirrored this trend, reaching 17.59% in 2024 and decreasing to 13.89% in 2025. Equity in profit of unconsolidated affiliated companies showed a modest increase over the period.
In summary, the period demonstrates a generally positive trend in profitability, driven primarily by improvements in gross margin, particularly through 2024. However, the decline in key metrics during 2025 suggests potential challenges or shifts in the business environment that warrant further scrutiny. The increasing interest expense related to financial products also represents a potential area of concern.