Analysis of Geographic Areas
Caterpillar Inc. operates in 2 regions: Inside United States and Outside United States.
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- 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
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Area Asset Turnover
Caterpillar Inc., asset turnover by geographic area
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Inside United States | |||||
| Outside United States |
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).
Asset turnover ratios for the analyzed geographic areas demonstrate distinct trends over the five-year period. The Inside United States ratio exhibits an initial increase followed by a stabilization and subsequent decline, while the Outside United States ratio shows a more consistent, albeit moderating, performance.
- Inside United States
- The asset turnover ratio for the Inside United States area increased from 2.74 in 2021 to 3.46 in 2022, representing a substantial improvement in asset utilization. This upward trend continued into 2023, reaching a peak of 4.05. However, the ratio then decreased to 3.73 in 2024 and further to 3.48 in 2025. This suggests a potential weakening in the efficiency of asset use within the United States towards the end of the analyzed period.
- Outside United States
- The Outside United States area consistently maintained a higher asset turnover ratio compared to the Inside United States. The ratio began at 6.27 in 2021 and increased to 7.03 in 2022, and 7.17 in 2023, indicating strong and improving asset utilization. A slight decrease to 6.64 was observed in 2024, followed by a further decline to 6.11 in 2025. While still robust, this represents a moderating trend in asset efficiency outside of the United States.
The difference in asset turnover between the two areas remained significant throughout the period. The Outside United States consistently demonstrated a more efficient use of assets, generating more revenue per dollar of assets invested. The convergence of the two ratios in 2025, driven by the decline in the Inside United States ratio and the moderation in the Outside United States ratio, warrants further investigation to understand the underlying causes.
Overall, the asset turnover trends suggest differing operational dynamics between the Inside and Outside United States areas. The initial improvements in both areas were followed by stabilization and, in some cases, declines, indicating potential shifts in market conditions or internal operational changes.
Area Asset Turnover: Inside United States
Caterpillar Inc.; Inside United States; area asset turnover calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| External sales and revenues | |||||
| Property, plant and equipment, net | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
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).
1 2025 Calculation
Area asset turnover = External sales and revenues ÷ Property, plant and equipment, net
= ÷ =
The financial performance within the United States demonstrates a generally positive trend in asset utilization, followed by a stabilization and slight decline in recent periods. External sales and revenues increased significantly between 2021 and 2023, while property, plant, and equipment also increased, though at a slower rate. This resulted in improvements in the area asset turnover ratio. However, the rate of improvement slowed, and the ratio has exhibited a slight downward trend in the most recent two years.
- External Sales and Revenues
- External sales and revenues experienced substantial growth, increasing from US$19,298 million in 2021 to US$31,053 million in 2023. This represents a growth of approximately 61%. While growth continued into 2025, reaching US$32,880 million, the rate of increase slowed considerably. A slight decrease was observed between 2023 and 2024.
- Property, Plant and Equipment, Net
- Property, plant, and equipment, net, increased steadily throughout the period, rising from US$7,035 million in 2021 to US$9,455 million in 2025. The largest increase occurred between 2023 and 2024, suggesting a period of significant capital investment. The rate of increase in net PP&E has been consistently positive, though not directly proportional to revenue growth.
- Area Asset Turnover
- The area asset turnover ratio increased from 2.74 in 2021 to 4.05 in 2023, indicating improved efficiency in generating sales from assets. This suggests that the company was becoming more effective at utilizing its assets to produce revenue. However, the ratio decreased to 3.73 in 2024 and further to 3.48 in 2025. This recent decline may indicate a leveling off of efficiency gains or potentially an over-investment in assets relative to sales.
The combination of increasing revenues and property, plant, and equipment suggests continued business activity and investment within the United States. The recent stabilization and slight decline in the area asset turnover ratio warrants further investigation to determine the underlying causes and potential implications for future performance.
Area Asset Turnover: Outside United States
Caterpillar Inc.; Outside United States; area asset turnover calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| External sales and revenues | |||||
| Property, plant and equipment, net | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
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).
1 2025 Calculation
Area asset turnover = External sales and revenues ÷ Property, plant and equipment, net
= ÷ =
The financial performance outside the United States demonstrates a fluctuating, yet generally decreasing, asset turnover ratio over the five-year period. External sales and revenues exhibited initial growth followed by a slight contraction, while net property, plant, and equipment showed a consistent, albeit moderate, increase. These movements collectively influenced the area asset turnover.
- External Sales and Revenues
- External sales and revenues increased from US$31,673 million in 2021 to US$35,059 million in 2022, representing a growth of approximately 10.7%. This growth continued, albeit at a slower pace, reaching US$36,007 million in 2023. However, a decrease to US$34,185 million was observed in 2024, followed by a marginal recovery to US$34,709 million in 2025. This suggests a potential stabilization, but at a level below the 2023 peak.
- Property, Plant, and Equipment, Net
- Net property, plant, and equipment remained relatively stable between 2021 and 2023, fluctuating around the US$5,000 million mark. A noticeable increase was recorded in 2024, reaching US$5,148 million, and continued in 2025 to US$5,685 million. This consistent growth in fixed assets, particularly in the latter years, may indicate ongoing investment in the areas outside the United States.
- Area Asset Turnover
- The area asset turnover ratio increased from 6.27 in 2021 to a peak of 7.17 in 2023, indicating improved efficiency in generating sales from assets. However, this positive trend reversed in 2024, with the ratio declining to 6.64. This downward trend continued into 2025, with the ratio falling further to 6.11. The decrease in asset turnover, despite increasing revenues in 2023, suggests that the growth in property, plant, and equipment may not be translating into proportional sales growth, or that sales growth is being outpaced by asset investment. The 2025 ratio is the lowest observed in the period.
The combined effect of these trends suggests a potential shift in capital efficiency outside the United States. While initial revenue growth was strong, the increasing investment in fixed assets, coupled with a recent decline in sales, has resulted in a lower asset turnover ratio. Further investigation may be warranted to understand the drivers behind these changes and assess the long-term implications for profitability and return on assets.
External sales and revenues
Caterpillar Inc., external sales and revenues by geographic area
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Inside United States | |||||
| Outside United States | |||||
| Total |
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).
External sales and revenues demonstrate a generally positive trajectory over the five-year period, though with some fluctuations. Total sales increased significantly from 2021 to 2023, followed by a slight decrease in 2024, and then resumed growth in 2025. Both the United States and international markets contribute to this overall trend, but exhibit differing patterns.
- Inside United States
- Sales within the United States experienced substantial growth from 2021 to 2023, increasing from US$19,298 million to US$31,053 million. This represents a significant expansion of the domestic market. A modest decline was observed in 2024, with sales reaching US$30,624 million, before recovering to US$32,880 million in 2025. This suggests a potential stabilization of the US market after a period of rapid growth.
- Outside United States
- Sales outside the United States also increased between 2021 and 2023, moving from US$31,673 million to US$36,007 million. However, the growth rate was less pronounced than that of the domestic market. A decrease in external sales occurred in 2024, with revenues falling to US$34,185 million, followed by a slight recovery to US$34,709 million in 2025. The international market appears more stable, with less dramatic fluctuations than the US market.
- Total Sales
- Total sales increased from US$50,971 million in 2021 to a peak of US$67,060 million in 2023. The dip to US$64,809 million in 2024 indicates a temporary slowdown in overall growth. The subsequent increase to US$67,589 million in 2025 suggests a return to a growth trajectory, driven by both domestic and international market performance. The overall trend indicates a growing business, despite the short-term decline experienced in 2024.
The relative contribution of the United States and outside the United States to total sales remains relatively consistent throughout the period. While both regions experienced growth and contraction, neither significantly altered its proportion of overall revenue. The company appears to maintain a balanced geographic sales portfolio.
Property, plant and equipment, net
Caterpillar Inc., property, plant and equipment, net by geographic area
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Inside United States | |||||
| Outside United States | |||||
| Total |
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).
Property, plant, and equipment, net, exhibited distinct trends when analyzed by geographic area over the five-year period. Overall, a consistent increase in total property, plant, and equipment is observed, though the composition between domestic and international holdings differs.
- Inside United States
- The value of property, plant, and equipment located within the United States demonstrated a generally upward trajectory. Beginning at US$7,035 million in 2021, it experienced a modest increase to US$7,042 million in 2022. A more substantial rise is then noted, reaching US$7,658 million in 2023, US$8,213 million in 2024, and culminating in US$9,455 million in 2025. This indicates a significant and accelerating investment in domestic assets during the latter part of the period.
- Outside United States
- Property, plant, and equipment outside the United States showed a more stable pattern. The value decreased slightly from US$5,055 million in 2021 to US$4,986 million in 2022. It then recovered to US$5,022 million in 2023 and continued to grow, reaching US$5,148 million in 2024 and US$5,685 million in 2025. While positive growth is present, the rate of increase is considerably less pronounced than that observed within the United States.
- Total Property, Plant, and Equipment
- Total property, plant, and equipment, net, followed an increasing trend throughout the period, moving from US$12,090 million in 2021 to US$15,140 million in 2025. The increase from 2021 to 2022 was minimal, at US$12,028 million. However, subsequent years show consistent growth, with the largest year-over-year increase occurring between 2024 and 2025. The increasing proportion of domestic assets within the total suggests a strategic shift towards greater investment within the United States.
The observed trends suggest a potential strategic focus on expanding and modernizing assets within the United States, while maintaining a relatively stable level of investment in international property, plant, and equipment. Further investigation would be required to determine the underlying reasons for this geographic allocation of capital expenditure.