Stock Analysis on Net
Stock Analysis on Net

Caterpillar Inc. (NYSE:CAT)

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Financial Reporting Quality: Aggregate Accruals

Microsoft Excel LibreOffice Calc

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Caterpillar Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Operating Assets
Total assets
Less: Cash and short-term investments
Operating assets
Operating Liabilities
Total liabilities
Less: Short-term borrowings
Less: Long-term debt due within one year
Less: Long-term debt due after one year
Operating liabilities
 
Net operating assets1
Balance-sheet-based aggregate accruals2
Financial Ratio
Balance-sheet-based accruals ratio3
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
3M Co.
Boeing Co.
General Electric Co.
Honeywell International Inc.
Illinois Tool Works Inc.
Lockheed Martin Corp.
Raytheon Technologies Corp.
Balance-Sheet-Based Accruals Ratio, Sector
Capital Goods
Balance-Sheet-Based Accruals Ratio, Industry
Industrials

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).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= =

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= =

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Caterpillar Inc. improved earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

Caterpillar Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Profit (loss) attributable to common stockholders
Less: Net cash provided by operating activities
Less: Net cash used for investing activities
Cash-flow-statement-based aggregate accruals
Financial Ratio
Cash-flow-statement-based accruals ratio1
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
3M Co.
Boeing Co.
General Electric Co.
Honeywell International Inc.
Illinois Tool Works Inc.
Lockheed Martin Corp.
Raytheon Technologies Corp.
Cash-Flow-Statement-Based Accruals Ratio, Sector
Capital Goods
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials

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).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Caterpillar Inc. deteriorated earnings quality from 2019 to 2020.