Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Caterpillar Inc., solvency ratios
Based on: 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), 10-K (reporting date: 2020-12-31).
- Debt to Equity
- The debt to equity ratio shows a gradual decrease from 2.42 in 2020 to 1.94 in 2023, followed by a slight increase to 1.97 in 2024. This indicates an overall reduction in reliance on debt relative to equity over the period, with a modest uptick at the end.
- Debt to Equity (Including Operating Lease Liability)
- This ratio follows a similar pattern to the standard debt to equity ratio, decreasing from 2.46 in 2020 to 1.97 in 2023, then slightly rising to 2.0 in 2024. The inclusion of operating lease liabilities does not significantly alter the trend.
- Debt to Capital
- The debt to capital ratio remains relatively stable, moving marginally from 0.71 in 2020 to 0.66 in both 2023 and 2024. This suggests a consistent proportion of debt within the company's capital structure with slight improvement in debt management.
- Debt to Capital (Including Operating Lease Liability)
- Including operating lease liabilities, this ratio mirrors the standard debt to capital trend, starting at 0.71 in 2020 and settling at 0.67 in 2024, reinforcing a stable capital structure.
- Debt to Assets
- The debt to assets ratio shows a downward trend from 0.47 in 2020 to 0.43 in 2023, followed by a minor increase to 0.44 in 2024. This indicates a modest decrease in the proportion of debt financing relative to total assets over time.
- Debt to Assets (Including Operating Lease Liability)
- When including operating lease liabilities, the ratio follows a similar path, decreasing from 0.48 in 2020 to 0.44 in 2023 and remaining at 0.44 in 2024, suggesting steady leverage relative to asset base.
- Financial Leverage
- Financial leverage decreases from 5.11 in 2020 to 4.49 in 2023, with a slight increase to 4.5 in 2024. This reflects a reduction in the use of debt relative to equity but indicates the company maintains a significant leverage position.
- Interest Coverage
- Interest coverage exhibits a strong upward trend, increasing substantially from 8.8 in 2020 to 27.21 in 2024. This improvement signals enhanced ability to meet interest obligations through operating earnings, pointing to improved financial health and reduced risk.
- Fixed Charge Coverage
- Similarly, fixed charge coverage increases significantly from 6.58 in 2020 to 20.25 in 2024, indicating a growing capacity to cover fixed financial obligations such as interest and lease payments, further evidencing improved financial stability.
Debt Ratios
Coverage Ratios
Debt to Equity
Caterpillar Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 4,393) | 4,643) | 5,957) | 5,404) | 2,015) | |
| Long-term debt due within one year | 6,665) | 8,763) | 5,322) | 6,352) | 9,149) | |
| Long-term debt due after one year | 27,351) | 24,472) | 25,714) | 26,033) | 25,999) | |
| Total debt | 38,409) | 37,878) | 36,993) | 37,789) | 37,163) | |
| Equity attributable to common shareholders | 19,491) | 19,494) | 15,869) | 16,484) | 15,331) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.97 | 1.94 | 2.33 | 2.29 | 2.42 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Eaton Corp. plc | 0.50 | 0.49 | 0.51 | 0.52 | 0.54 | |
| GE Aerospace | 1.00 | 0.77 | 0.89 | 0.87 | 2.11 | |
| Honeywell International Inc. | 1.67 | 1.29 | 1.17 | 1.06 | 1.28 | |
| Lockheed Martin Corp. | 3.20 | 2.55 | 1.68 | 1.07 | 2.02 | |
| RTX Corp. | 0.69 | 0.73 | 0.44 | 0.43 | 0.44 | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.54 | 1.54 | 1.33 | 1.26 | 1.75 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.39 | 1.52 | 1.42 | 1.37 | 1.82 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity = Total debt ÷ Equity attributable to common shareholders
= 38,409 ÷ 19,491 = 1.97
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a relatively stable trend over the five-year period. Beginning at 37,163 million USD in 2020, it slightly increased to 37,789 million USD in 2021. In 2022, a marginal decrease to 36,993 million USD was noted, followed by gradual increases in 2023 and 2024, reaching 37,878 million USD and 38,409 million USD respectively. Overall, total debt remained within a narrow range with minimal volatility.
- Equity Attributable to Common Shareholders
- Equity showed a generally positive trajectory with some fluctuations. Starting at 15,331 million USD in 2020, equity increased to 16,484 million USD in 2021, indicating growth. However, a decline to 15,869 million USD occurred in 2022, suggesting a temporary reduction. This was followed by a notable rebound to 19,494 million USD in 2023, maintaining a similar level of 19,491 million USD in 2024. The substantial increase in 2023 signals an improvement in shareholders' equity position.
- Debt to Equity Ratio
- The debt to equity ratio demonstrated a downward movement over the period, indicating a reduction in financial leverage relative to equity. From a high of 2.42 in 2020, the ratio steadily decreased to 2.29 in 2021, then slightly rose to 2.33 in 2022. A significant drop occurred in 2023 to 1.94, remaining relatively stable at 1.97 in 2024. The decline after 2022 suggests improved capitalization with a stronger equity base relative to debt.
Debt to Equity (including Operating Lease Liability)
Caterpillar Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 4,393) | 4,643) | 5,957) | 5,404) | 2,015) | |
| Long-term debt due within one year | 6,665) | 8,763) | 5,322) | 6,352) | 9,149) | |
| Long-term debt due after one year | 27,351) | 24,472) | 25,714) | 26,033) | 25,999) | |
| Total debt | 38,409) | 37,878) | 36,993) | 37,789) | 37,163) | |
| Current operating lease liabilities (recognized in Other current liabilities) | 143) | 147) | 151) | 158) | 163) | |
| Noncurrent operating lease liabilities (recognized in Other liabilities) | 459) | 427) | 428) | 484) | 457) | |
| Total debt (including operating lease liability) | 39,011) | 38,452) | 37,572) | 38,431) | 37,783) | |
| Equity attributable to common shareholders | 19,491) | 19,494) | 15,869) | 16,484) | 15,331) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 2.00 | 1.97 | 2.37 | 2.33 | 2.46 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Eaton Corp. plc | 0.54 | 0.52 | 0.54 | 0.55 | 0.57 | |
| GE Aerospace | 1.05 | 0.84 | 0.96 | 0.94 | 2.20 | |
| Honeywell International Inc. | 1.73 | 1.36 | 1.23 | 1.11 | 1.32 | |
| Lockheed Martin Corp. | 3.38 | 2.73 | 1.81 | 1.19 | 2.21 | |
| RTX Corp. | 0.72 | 0.76 | 0.47 | 0.46 | 0.47 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.60 | 1.61 | 1.39 | 1.32 | 1.81 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.55 | 1.71 | 1.59 | 1.54 | 2.00 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Equity attributable to common shareholders
= 39,011 ÷ 19,491 = 2.00
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt level exhibited minor fluctuations over the five-year period. Starting at 37,783 million USD in 2020, it showed a slight upward trend reaching 39,011 million USD in 2024. The data indicates relative stability with a negligible net increase, reflecting modest debt management practices with periodic increases and decreases.
- Equity Attributable to Common Shareholders
- Equity experienced fluctuating yet overall positive changes during the observed period. An initial increase was observed from 15,331 million USD in 2020 to 16,484 million USD in 2021, followed by a decline to 15,869 million USD in 2022. Subsequently, a notable rise occurred, peaking at 19,494 million USD in 2023 and maintaining a similar level of 19,491 million USD in 2024. This pattern suggests successful equity growth efforts after a temporary dip.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio demonstrated a declining trend, moving from 2.46 in 2020 to its lowest at 1.97 in 2023, before slightly increasing to 2.00 in 2024. This decrease, especially notable in 2023, indicates an improved capital structure characterized by reduced financial leverage relative to equity, enhancing the company's solvency position during most of the period.
Debt to Capital
Caterpillar Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 4,393) | 4,643) | 5,957) | 5,404) | 2,015) | |
| Long-term debt due within one year | 6,665) | 8,763) | 5,322) | 6,352) | 9,149) | |
| Long-term debt due after one year | 27,351) | 24,472) | 25,714) | 26,033) | 25,999) | |
| Total debt | 38,409) | 37,878) | 36,993) | 37,789) | 37,163) | |
| Equity attributable to common shareholders | 19,491) | 19,494) | 15,869) | 16,484) | 15,331) | |
| Total capital | 57,900) | 57,372) | 52,862) | 54,273) | 52,494) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.66 | 0.66 | 0.70 | 0.70 | 0.71 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.08 | 1.49 | 1.39 | 1.35 | 1.40 | |
| Eaton Corp. plc | 0.33 | 0.33 | 0.34 | 0.34 | 0.35 | |
| GE Aerospace | 0.50 | 0.43 | 0.47 | 0.47 | 0.68 | |
| Honeywell International Inc. | 0.63 | 0.56 | 0.54 | 0.51 | 0.56 | |
| Lockheed Martin Corp. | 0.76 | 0.72 | 0.63 | 0.52 | 0.67 | |
| RTX Corp. | 0.41 | 0.42 | 0.31 | 0.30 | 0.31 | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.61 | 0.61 | 0.57 | 0.56 | 0.64 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.58 | 0.60 | 0.59 | 0.58 | 0.65 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 38,409 ÷ 57,900 = 0.66
2 Click competitor name to see calculations.
- Total debt
-
Total debt exhibits a generally stable pattern over the five-year period, fluctuating moderately between approximately 37,000 million USD and 38,400 million USD. After an initial increase from 37,163 million USD in 2020 to 37,789 million USD in 2021, debt slightly decreased in 2022 to 36,993 million USD before rising again in 2023 and 2024 to 37,878 million USD and 38,409 million USD, respectively. The overall trend shows a limited upward trajectory in debt levels by the end of the timeline.
- Total capital
-
Total capital demonstrates a rising trend throughout the period. Starting at 52,494 million USD in 2020, it increases to 54,273 million USD in 2021 before experiencing a slight decline in 2022 to 52,862 million USD. Subsequently, total capital rises significantly to 57,372 million USD in 2023 and marginally further to 57,900 million USD by 2024. This progression indicates a strengthening capital base, particularly evident in the last two years.
- Debt to capital ratio
-
The debt to capital ratio reveals a declining trend over the examined timeframe, moving from 0.71 in 2020 to 0.66 in 2023 and remaining stable at 0.66 in 2024. This decrease suggests a gradual reduction in the proportion of debt relative to total capital, reflecting an improvement in the overall capital structure, possibly indicating lower financial risk or a shift toward more equity financing.
Debt to Capital (including Operating Lease Liability)
Caterpillar Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 4,393) | 4,643) | 5,957) | 5,404) | 2,015) | |
| Long-term debt due within one year | 6,665) | 8,763) | 5,322) | 6,352) | 9,149) | |
| Long-term debt due after one year | 27,351) | 24,472) | 25,714) | 26,033) | 25,999) | |
| Total debt | 38,409) | 37,878) | 36,993) | 37,789) | 37,163) | |
| Current operating lease liabilities (recognized in Other current liabilities) | 143) | 147) | 151) | 158) | 163) | |
| Noncurrent operating lease liabilities (recognized in Other liabilities) | 459) | 427) | 428) | 484) | 457) | |
| Total debt (including operating lease liability) | 39,011) | 38,452) | 37,572) | 38,431) | 37,783) | |
| Equity attributable to common shareholders | 19,491) | 19,494) | 15,869) | 16,484) | 15,331) | |
| Total capital (including operating lease liability) | 58,502) | 57,946) | 53,441) | 54,915) | 53,114) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.67 | 0.66 | 0.70 | 0.70 | 0.71 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.08 | 1.47 | 1.37 | 1.34 | 1.39 | |
| Eaton Corp. plc | 0.35 | 0.34 | 0.35 | 0.36 | 0.36 | |
| GE Aerospace | 0.51 | 0.46 | 0.49 | 0.49 | 0.69 | |
| Honeywell International Inc. | 0.63 | 0.58 | 0.55 | 0.53 | 0.57 | |
| Lockheed Martin Corp. | 0.77 | 0.73 | 0.64 | 0.54 | 0.69 | |
| RTX Corp. | 0.42 | 0.43 | 0.32 | 0.31 | 0.32 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.62 | 0.62 | 0.58 | 0.57 | 0.64 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.63 | 0.61 | 0.61 | 0.67 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 39,011 ÷ 58,502 = 0.67
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt has shown relative stability over the five-year period, fluctuating within a narrow range between approximately 37,500 million and 39,000 million US dollars. There is a slight increase from 37,783 million in 2020 to 39,011 million in 2024, with minor variations in the interim years. This suggests the company has maintained a fairly consistent level of indebtedness.
- Total capital (including operating lease liability)
- Total capital has exhibited an overall upward trend, rising from 53,114 million US dollars in 2020 to 58,502 million US dollars in 2024. There was a slight dip in 2022 to 53,441 million, but the capital base rebounded strongly in the following years. This indicates growth in the company's capital structure, potentially through equity or retained earnings, strengthening the financial base over the period.
- Debt to capital (including operating lease liability)
- The debt to capital ratio declined gradually from 0.71 in 2020 to a low of 0.66 in 2023, before slightly increasing to 0.67 in 2024. This downward trend signals a modest reduction in leverage relative to total capital, implying improved financial stability or a shift in capital structure towards more equity or other non-debt funding. The slight uptick in the last year may indicate a marginal increase in leverage but remains lower than the initial level in 2020.
- Summary
- Overall, the data reveal a company maintaining steady debt levels while expanding its capital base, resulting in a decreasing leverage ratio over the terms analyzed. The trends suggest a cautious approach to debt management alongside efforts to strengthen equity or other forms of capital, which may enhance financial resilience. The minor fluctuations observed year-to-year do not represent significant volatility, pointing to stable financial management practices.
Debt to Assets
Caterpillar Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 4,393) | 4,643) | 5,957) | 5,404) | 2,015) | |
| Long-term debt due within one year | 6,665) | 8,763) | 5,322) | 6,352) | 9,149) | |
| Long-term debt due after one year | 27,351) | 24,472) | 25,714) | 26,033) | 25,999) | |
| Total debt | 38,409) | 37,878) | 36,993) | 37,789) | 37,163) | |
| Total assets | 87,764) | 87,476) | 81,943) | 82,793) | 78,324) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.44 | 0.43 | 0.45 | 0.46 | 0.47 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.34 | 0.38 | 0.42 | 0.42 | 0.42 | |
| Eaton Corp. plc | 0.24 | 0.24 | 0.25 | 0.25 | 0.25 | |
| GE Aerospace | 0.16 | 0.13 | 0.17 | 0.18 | 0.30 | |
| Honeywell International Inc. | 0.41 | 0.33 | 0.31 | 0.30 | 0.35 | |
| Lockheed Martin Corp. | 0.36 | 0.33 | 0.29 | 0.23 | 0.24 | |
| RTX Corp. | 0.25 | 0.27 | 0.20 | 0.20 | 0.20 | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.31 | 0.29 | 0.28 | 0.28 | 0.32 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.31 | 0.31 | 0.31 | 0.30 | 0.33 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 38,409 ÷ 87,764 = 0.44
2 Click competitor name to see calculations.
- Total Debt
- The total debt showed relative stability over the five-year period, fluctuating slightly around the 37,000 to 38,400 million US dollar range. Beginning at 37,163 million US dollars in 2020, it experienced a small increase in 2021, followed by a slight decrease in 2022, and then gradual increases in the last two years, ending at 38,409 million US dollars in 2024. Overall, the debt level remained fairly consistent without significant volatility.
- Total Assets
- Total assets exhibited a generally upward trend throughout the period. Starting at 78,324 million US dollars in 2020, assets increased each year except for a slight dip in 2022. The figure rose notably in 2023 and continued to grow slightly in 2024, reaching 87,764 million US dollars. This indicates asset growth of approximately 12% over the five years, suggesting expansion or increased investment in the company’s asset base.
- Debt to Assets Ratio
- The debt to assets ratio decreased steadily from 0.47 in 2020 to a low of 0.43 in 2023, before a marginal rise to 0.44 in 2024. This trend reflects a gradual improvement in financial leverage, indicating that the proportion of debt relative to total assets declined over the period, enhancing the company’s capital structure and potentially lowering financial risk.
Debt to Assets (including Operating Lease Liability)
Caterpillar Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 4,393) | 4,643) | 5,957) | 5,404) | 2,015) | |
| Long-term debt due within one year | 6,665) | 8,763) | 5,322) | 6,352) | 9,149) | |
| Long-term debt due after one year | 27,351) | 24,472) | 25,714) | 26,033) | 25,999) | |
| Total debt | 38,409) | 37,878) | 36,993) | 37,789) | 37,163) | |
| Current operating lease liabilities (recognized in Other current liabilities) | 143) | 147) | 151) | 158) | 163) | |
| Noncurrent operating lease liabilities (recognized in Other liabilities) | 459) | 427) | 428) | 484) | 457) | |
| Total debt (including operating lease liability) | 39,011) | 38,452) | 37,572) | 38,431) | 37,783) | |
| Total assets | 87,764) | 87,476) | 81,943) | 82,793) | 78,324) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.44 | 0.44 | 0.46 | 0.46 | 0.48 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.36 | 0.40 | 0.43 | 0.43 | 0.43 | |
| Eaton Corp. plc | 0.26 | 0.26 | 0.26 | 0.27 | 0.27 | |
| GE Aerospace | 0.17 | 0.14 | 0.19 | 0.19 | 0.31 | |
| Honeywell International Inc. | 0.43 | 0.35 | 0.33 | 0.32 | 0.36 | |
| Lockheed Martin Corp. | 0.39 | 0.36 | 0.32 | 0.26 | 0.26 | |
| RTX Corp. | 0.27 | 0.28 | 0.21 | 0.21 | 0.21 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.32 | 0.30 | 0.30 | 0.29 | 0.33 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.35 | 0.35 | 0.34 | 0.34 | 0.36 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 39,011 ÷ 87,764 = 0.44
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibited slight fluctuations over the five-year period, starting at $37,783 million in 2020, increasing modestly to $38,431 million in 2021, then decreasing to $37,572 million in 2022. Subsequently, it rose again to $38,452 million in 2023 and further to $39,011 million in 2024. Overall, the debt level showed a relatively stable trend with minor variations around the $38 billion mark.
- Total assets
- Total assets demonstrated a consistent upward trend throughout the period. Beginning at $78,324 million in 2020, the asset base increased to $82,793 million in 2021, then saw a slight decrease to $81,943 million in 2022. From this point, assets rose steadily to $87,476 million in 2023 and further to $87,764 million in 2024. The general pattern indicates growth in asset value over the timeframe, despite a minor dip in 2022.
- Debt to assets ratio (including operating lease liability)
- The debt to assets ratio revealed a declining trend over the observed period, moving from 0.48 in 2020 down to 0.44 in both 2023 and 2024. This indicates a gradual reduction in leverage relative to total assets, suggesting an improvement in the company's asset coverage of its debt obligations. The ratio remained stable at 0.46 in 2021 and 2022, before declining more distinctly towards the later years.
Financial Leverage
Caterpillar Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 87,764) | 87,476) | 81,943) | 82,793) | 78,324) | |
| Equity attributable to common shareholders | 19,491) | 19,494) | 15,869) | 16,484) | 15,331) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 4.50 | 4.49 | 5.16 | 5.02 | 5.11 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Eaton Corp. plc | 2.08 | 2.02 | 2.06 | 2.07 | 2.13 | |
| GE Aerospace | 6.37 | 5.96 | 5.16 | 4.93 | 7.13 | |
| Honeywell International Inc. | 4.04 | 3.88 | 3.73 | 3.47 | 3.68 | |
| Lockheed Martin Corp. | 8.78 | 7.67 | 5.71 | 4.64 | 8.43 | |
| RTX Corp. | 2.71 | 2.71 | 2.19 | 2.21 | 2.25 | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 5.05 | 5.35 | 4.71 | 4.55 | 5.54 | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.49 | 4.94 | 4.65 | 4.52 | 5.49 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Financial leverage = Total assets ÷ Equity attributable to common shareholders
= 87,764 ÷ 19,491 = 4.50
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends and patterns.
- Total Assets
- Total assets exhibited a generally upward trend, increasing from 78,324 million US dollars in 2020 to 87,764 million US dollars in 2024. There was a slight decrease observed in 2022 compared to 2021, but the overall trajectory remains positive, indicating asset growth over the period analyzed.
- Equity Attributable to Common Shareholders
- Equity attributable to common shareholders increased from 15,331 million US dollars in 2020 to a peak of 19,494 million US dollars in 2023, before slightly declining to 19,491 million US dollars in 2024. This trend suggests improved shareholder equity, reflecting either retained earnings accumulation or capital inflows, with a minor reduction in the final year yet maintaining a substantially higher level than at the start of the period.
- Financial Leverage Ratio
- The financial leverage ratio decreased from 5.11 in 2020 to 4.50 in 2024, showing a general decline over the assessed years. Notably, this ratio dropped to its lowest level in 2023 at 4.49 before marginally increasing in 2024. The reduction in leverage suggests a move towards a lower reliance on debt relative to equity, potentially indicating improved financial stability and reduced risk profile.
Overall, the company demonstrates growth in asset size and equity base, accompanied by a decreasing financial leverage ratio, which may suggest a strengthening balance sheet and a more conservative capital structure over the analyzed timeframe.
Interest Coverage
Caterpillar Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Profit attributable to common stockholders | 10,792) | 10,335) | 6,705) | 6,489) | 2,998) | |
| Add: Net income attributable to noncontrolling interest | (4) | (3) | (1) | 4) | 5) | |
| Add: Income tax expense | 2,629) | 2,781) | 2,067) | 1,742) | 1,006) | |
| Add: Interest expense excluding Financial Products | 512) | 511) | 443) | 488) | 514) | |
| Earnings before interest and tax (EBIT) | 13,929) | 13,624) | 9,214) | 8,723) | 4,523) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 27.21 | 26.66 | 20.80 | 17.88 | 8.80 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | -3.48 | 0.18 | -0.98 | -0.88 | -5.71 | |
| Eaton Corp. plc | 36.12 | 26.34 | 21.22 | 21.11 | 12.72 | |
| GE Aerospace | 8.73 | 10.12 | 1.88 | -0.96 | 2.59 | |
| Honeywell International Inc. | 7.82 | 10.36 | 16.41 | 22.09 | 17.75 | |
| Lockheed Martin Corp. | 7.00 | 9.84 | 11.72 | 14.27 | 14.93 | |
| RTX Corp. | 4.14 | 3.32 | 5.64 | 4.71 | -0.65 | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 4.92 | 6.84 | 4.84 | 3.98 | 1.99 | |
| Interest Coverage, Industry | ||||||
| Industrials | 5.79 | 6.64 | 4.98 | 5.14 | 1.25 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 13,929 ÷ 512 = 27.21
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The earnings before interest and tax demonstrate a consistent and substantial upward trend over the observed period. Starting from 4,523 million US dollars in 2020, EBIT nearly doubled to 8,723 million US dollars in 2021, followed by a moderate increase to 9,214 million in 2022. The growth accelerated significantly in the subsequent years, reaching 13,624 million in 2023 and slightly increasing to 13,929 million in 2024. This trend indicates improving operational profitability and effective cost management.
- Interest Expense Excluding Financial Products
- Interest expenses showed a mild decline from 514 million US dollars in 2020 to 443 million in 2022, followed by a slight increase to 511 million in 2023 and 512 million in 2024. Overall, interest expenses have remained relatively stable within a narrow range, suggesting consistent borrowing costs or debt levels during the period.
- Interest Coverage Ratio
- The interest coverage ratio exhibits a strong positive trajectory, reflecting the company's increasing ability to meet interest obligations through operating earnings. The ratio rose from 8.8 in 2020 to 17.88 in 2021, further improving to 20.8 in 2022. The improvements continued at an accelerated pace, reaching 26.66 in 2023 and 27.21 in 2024. This signifies enhanced financial health and reduced risk related to debt servicing.
Fixed Charge Coverage
Caterpillar Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Profit attributable to common stockholders | 10,792) | 10,335) | 6,705) | 6,489) | 2,998) | |
| Add: Net income attributable to noncontrolling interest | (4) | (3) | (1) | 4) | 5) | |
| Add: Income tax expense | 2,629) | 2,781) | 2,067) | 1,742) | 1,006) | |
| Add: Interest expense excluding Financial Products | 512) | 511) | 443) | 488) | 514) | |
| Earnings before interest and tax (EBIT) | 13,929) | 13,624) | 9,214) | 8,723) | 4,523) | |
| Add: Operating lease cost | 185) | 189) | 187) | 214) | 204) | |
| Earnings before fixed charges and tax | 14,114) | 13,813) | 9,401) | 8,937) | 4,727) | |
| Interest expense excluding Financial Products | 512) | 511) | 443) | 488) | 514) | |
| Operating lease cost | 185) | 189) | 187) | 214) | 204) | |
| Fixed charges | 697) | 700) | 630) | 702) | 718) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 20.25 | 19.73 | 14.92 | 12.73 | 6.58 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | -2.69 | 0.31 | -0.70 | -0.64 | -4.75 | |
| Eaton Corp. plc | 13.79 | 11.90 | 10.01 | 10.40 | 6.24 | |
| GE Aerospace | 6.19 | 5.25 | 1.35 | -0.22 | 1.93 | |
| Honeywell International Inc. | 6.44 | 8.13 | 11.00 | 13.67 | 11.49 | |
| Lockheed Martin Corp. | 5.80 | 7.81 | 8.44 | 9.95 | 11.12 | |
| RTX Corp. | 3.59 | 2.81 | 4.40 | 3.66 | -0.22 | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 4.03 | 5.14 | 3.61 | 3.06 | 1.66 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.96 | 4.32 | 3.30 | 3.44 | 1.12 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 14,114 ÷ 697 = 20.25
2 Click competitor name to see calculations.
- Earnings Before Fixed Charges and Tax
- The earnings before fixed charges and tax have exhibited a consistently upward trend over the analyzed period. Starting from $4,727 million in 2020, there was a significant increase in 2021 to $8,937 million. This growth continued, though at a slower rate, reaching $9,401 million in 2022. The most notable rise occurred in 2023, where earnings jumped to $13,813 million, and this positive trend persisted slightly into 2024 with earnings at $14,114 million. The data indicates a robust and accelerating growth in operational profitability before fixed charges and taxes.
- Fixed Charges
- Fixed charges have remained relatively stable throughout the period, fluctuating marginally between $630 million and $718 million. The amount was highest in 2020 at $718 million, then showed a slight decrease to $702 million in 2021 and further to $630 million in 2022. It increased again to $700 million in 2023 and slightly decreased to $697 million in 2024. Overall, fixed charges have not shown any significant growth or decline, maintaining a consistent level.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio has demonstrated an impressive and steady improvement. From a ratio of 6.58 in 2020, it nearly doubled to 12.73 in 2021. The upward trajectory continued with 14.92 in 2022, reaching 19.73 in 2023, and further improving to 20.25 in 2024. This ratio reflects the company’s enhanced ability to cover fixed charges from its earnings, indicating stronger financial health and reduced risk related to fixed financial obligations over time.
- Summary
- The data suggests a company experiencing strong growth in operational earnings before considering fixed charges and taxes, while maintaining relatively stable fixed charges. The significant increase in the fixed charge coverage ratio reinforces improved financial strength and an enhanced capacity to meet fixed financial obligations without strain. This trend reflects positively on the company's financial stability and operational efficiency across the observed years.