Caterpillar Inc. (CAT)
Long-term Debt and Solvency Analysis
Difficulty: Beginner
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Ratios (Summary)
Caterpillar Inc., debt and solvency ratios
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
| Ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Caterpillar Inc.’s debt to equity ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Caterpillar Inc.’s debt to capital ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Caterpillar Inc.’s debt to assets ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Caterpillar Inc.’s financial leverage ratio improved from 2016 to 2017 and from 2017 to 2018. |
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Caterpillar Inc.’s interest coverage ratio improved from 2016 to 2017 and from 2017 to 2018. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Caterpillar Inc.’s fixed charge coverage ratio improved from 2016 to 2017 and from 2017 to 2018. |
Debt to Equity
Caterpillar Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Short-term borrowings | 5,723 | 4,837 | 7,303 | 6,967 | 4,708 | |
| Long-term debt due within one year | 5,830 | 6,194 | 6,662 | 5,879 | 6,793 | |
| Long-term debt due after one year | 25,000 | 23,847 | 22,818 | 25,247 | 27,784 | |
| Total debt | 36,553 | 34,878 | 36,783 | 38,093 | 39,285 | |
| Equity attributable to common stockholders | 14,039 | 13,697 | 13,137 | 14,809 | 16,746 | |
| Ratio | ||||||
| Debt to equity1 | 2.60 | 2.55 | 2.80 | 2.57 | 2.35 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Illinois Tool Works Inc. | 2.27 | 1.82 | 1.84 | 1.42 | 1.09 | |
| Debt to Equity, Sector | ||||||
| Industrial Engineering | 2.54 | 2.36 | 2.57 | 2.27 | 1.98 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.51 | 1.36 | 1.31 | 1.30 | 1.50 | |
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
1 2018 Calculation
Debt to equity = Total debt ÷ Equity attributable to common stockholders
= 36,553 ÷ 14,039 = 2.60
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Caterpillar Inc.’s debt to equity ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
Debt to Capital
Caterpillar Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Short-term borrowings | 5,723 | 4,837 | 7,303 | 6,967 | 4,708 | |
| Long-term debt due within one year | 5,830 | 6,194 | 6,662 | 5,879 | 6,793 | |
| Long-term debt due after one year | 25,000 | 23,847 | 22,818 | 25,247 | 27,784 | |
| Total debt | 36,553 | 34,878 | 36,783 | 38,093 | 39,285 | |
| Equity attributable to common stockholders | 14,039 | 13,697 | 13,137 | 14,809 | 16,746 | |
| Total capital | 50,592 | 48,575 | 49,920 | 52,902 | 56,031 | |
| Ratio | ||||||
| Debt to capital1 | 0.72 | 0.72 | 0.74 | 0.72 | 0.70 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Illinois Tool Works Inc. | 0.69 | 0.64 | 0.65 | 0.59 | 0.52 | |
| Debt to Capital, Sector | ||||||
| Industrial Engineering | 0.72 | 0.70 | 0.72 | 0.69 | 0.66 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.60 | 0.58 | 0.57 | 0.56 | 0.60 | |
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
1 2018 Calculation
Debt to capital = Total debt ÷ Total capital
= 36,553 ÷ 50,592 = 0.72
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Caterpillar Inc.’s debt to capital ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
Debt to Assets
Caterpillar Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Short-term borrowings | 5,723 | 4,837 | 7,303 | 6,967 | 4,708 | |
| Long-term debt due within one year | 5,830 | 6,194 | 6,662 | 5,879 | 6,793 | |
| Long-term debt due after one year | 25,000 | 23,847 | 22,818 | 25,247 | 27,784 | |
| Total debt | 36,553 | 34,878 | 36,783 | 38,093 | 39,285 | |
| Total assets | 78,509 | 76,962 | 74,704 | 78,497 | 84,681 | |
| Ratio | ||||||
| Debt to assets1 | 0.47 | 0.45 | 0.49 | 0.49 | 0.46 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Illinois Tool Works Inc. | 0.50 | 0.50 | 0.52 | 0.47 | 0.42 | |
| Debt to Assets, Sector | ||||||
| Industrial Engineering | 0.47 | 0.46 | 0.50 | 0.48 | 0.46 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.31 | 0.31 | 0.30 | 0.31 | 0.37 | |
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
1 2018 Calculation
Debt to assets = Total debt ÷ Total assets
= 36,553 ÷ 78,509 = 0.47
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Caterpillar Inc.’s debt to assets ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018. |
Financial Leverage
Caterpillar Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Total assets | 78,509 | 76,962 | 74,704 | 78,497 | 84,681 | |
| Equity attributable to common stockholders | 14,039 | 13,697 | 13,137 | 14,809 | 16,746 | |
| Ratio | ||||||
| Financial leverage1 | 5.59 | 5.62 | 5.69 | 5.30 | 5.06 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Illinois Tool Works Inc. | 4.57 | 3.66 | 3.57 | 3.01 | 2.59 | |
| Financial Leverage, Sector | ||||||
| Industrial Engineering | 5.40 | 5.13 | 5.17 | 4.70 | 4.34 | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.86 | 4.45 | 4.36 | 4.19 | 4.03 | |
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
1 2018 Calculation
Financial leverage = Total assets ÷ Equity attributable to common stockholders
= 78,509 ÷ 14,039 = 5.59
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Caterpillar Inc.’s financial leverage ratio improved from 2016 to 2017 and from 2017 to 2018. |
Interest Coverage
Caterpillar Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Profit (loss) attributable to common stockholders | 6,147 | 754 | (67) | 2,102 | 3,695 | |
| Add: Net income attributable to noncontrolling interest | 1 | 5 | 8 | 11 | 16 | |
| Add: Income tax expense | 1,698 | 3,339 | 192 | 742 | 1,380 | |
| Add: Interest expense excluding Financial Products | 404 | 531 | 505 | 507 | 484 | |
| Earnings before interest and tax (EBIT) | 8,250 | 4,629 | 638 | 3,362 | 5,575 | |
| Ratio | ||||||
| Interest coverage1 | 20.42 | 8.72 | 1.26 | 6.63 | 11.52 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Illinois Tool Works Inc. | 14.21 | 13.58 | 13.27 | 13.03 | 11.80 | |
| Interest Coverage, Sector | ||||||
| Industrial Engineering | 18.00 | 10.31 | 5.10 | 8.60 | 11.61 | |
| Interest Coverage, Industry | ||||||
| Industrials | 7.01 | 7.95 | 8.24 | 10.83 | 7.76 | |
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
1 2018 Calculation
Interest coverage = EBIT ÷ Interest expense
= 8,250 ÷ 404 = 20.42
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Caterpillar Inc.’s interest coverage ratio improved from 2016 to 2017 and from 2017 to 2018. |
Fixed Charge Coverage
Caterpillar Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Profit (loss) attributable to common stockholders | 6,147 | 754 | (67) | 2,102 | 3,695 | |
| Add: Net income attributable to noncontrolling interest | 1 | 5 | 8 | 11 | 16 | |
| Add: Income tax expense | 1,698 | 3,339 | 192 | 742 | 1,380 | |
| Add: Interest expense excluding Financial Products | 404 | 531 | 505 | 507 | 484 | |
| Earnings before interest and tax (EBIT) | 8,250 | 4,629 | 638 | 3,362 | 5,575 | |
| Add: Rental expense for operating leases | 322 | 331 | 375 | 371 | 391 | |
| Earnings before fixed charges and tax | 8,572 | 4,960 | 1,013 | 3,733 | 5,966 | |
| Interest expense excluding Financial Products | 404 | 531 | 505 | 507 | 484 | |
| Rental expense for operating leases | 322 | 331 | 375 | 371 | 391 | |
| Fixed charges | 726 | 862 | 880 | 878 | 875 | |
| Ratio | ||||||
| Fixed charge coverage1 | 11.81 | 5.75 | 1.15 | 4.25 | 6.82 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Illinois Tool Works Inc. | 9.91 | 9.61 | 9.12 | 8.93 | 8.10 | |
| Fixed Charge Coverage, Sector | ||||||
| Industrial Engineering | 11.15 | 6.93 | 3.46 | 5.57 | 7.21 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.19 | 4.60 | 4.79 | 5.89 | 5.14 | |
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
1 2018 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 8,572 ÷ 726 = 11.81
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Caterpillar Inc.’s fixed charge coverage ratio improved from 2016 to 2017 and from 2017 to 2018. |