Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Solvency Ratios (Summary)
Caterpillar Inc., solvency ratios
Based on: 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), 10-K (filing date: 2016-02-16).
| Solvency 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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019. |
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Caterpillar Inc.’s debt to equity ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
| 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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019. |
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Caterpillar Inc.’s debt to capital ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Caterpillar Inc.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Caterpillar Inc.’s debt to assets ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Caterpillar Inc.’s financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019. |
| Solvency 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 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
Debt to Equity
Caterpillar Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 5,166 | 5,723 | 4,837 | 7,303 | 6,967 | |
| Long-term debt due within one year | 6,210 | 5,830 | 6,194 | 6,662 | 5,879 | |
| Long-term debt due after one year | 26,281 | 25,000 | 23,847 | 22,818 | 25,247 | |
| Total debt | 37,657 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Equity attributable to common stockholders | 14,588 | 14,039 | 13,697 | 13,137 | 14,809 | |
| Solvency Ratio | ||||||
| Debt to equity1 | 2.58 | 2.60 | 2.55 | 2.80 | 2.57 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Illinois Tool Works Inc. | 2.56 | 2.27 | 1.82 | 1.84 | 1.42 | |
| Debt to Equity, Sector | ||||||
| Industrial Engineering | 2.58 | 2.54 | 2.36 | 2.57 | 2.27 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.74 | 1.71 | 1.50 | 1.40 | 1.38 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Debt to equity = Total debt ÷ Equity attributable to common stockholders
= 37,657 ÷ 14,588 = 2.58
2 Click competitor name to see calculations.
| Solvency 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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019. |
Debt to Equity (including Operating Lease Liability)
Caterpillar Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 5,166 | 5,723 | 4,837 | 7,303 | 6,967 | |
| Long-term debt due within one year | 6,210 | 5,830 | 6,194 | 6,662 | 5,879 | |
| Long-term debt due after one year | 26,281 | 25,000 | 23,847 | 22,818 | 25,247 | |
| Total debt | 37,657 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Current operating lease liabilities (recognized in Other current liabilities) | 173 | — | — | — | — | |
| Noncurrent operating lease liabilities (recognized in Other liabilities) | 461 | — | — | — | — | |
| Total debt (including operating lease liability) | 38,291 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Equity attributable to common stockholders | 14,588 | 14,039 | 13,697 | 13,137 | 14,809 | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 2.62 | 2.60 | 2.55 | 2.80 | 2.57 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Illinois Tool Works Inc. | 2.62 | 2.27 | 1.82 | 1.84 | 1.42 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Industrial Engineering | 2.62 | 2.54 | 2.36 | 2.57 | 2.27 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.84 | 1.71 | 1.50 | 1.40 | 1.38 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Equity attributable to common stockholders
= 38,291 ÷ 14,588 = 2.62
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Caterpillar Inc.’s debt to equity ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Capital
Caterpillar Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 5,166 | 5,723 | 4,837 | 7,303 | 6,967 | |
| Long-term debt due within one year | 6,210 | 5,830 | 6,194 | 6,662 | 5,879 | |
| Long-term debt due after one year | 26,281 | 25,000 | 23,847 | 22,818 | 25,247 | |
| Total debt | 37,657 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Equity attributable to common stockholders | 14,588 | 14,039 | 13,697 | 13,137 | 14,809 | |
| Total capital | 52,245 | 50,592 | 48,575 | 49,920 | 52,902 | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.72 | 0.72 | 0.72 | 0.74 | 0.72 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Illinois Tool Works Inc. | 0.72 | 0.69 | 0.64 | 0.65 | 0.59 | |
| Debt to Capital, Sector | ||||||
| Industrial Engineering | 0.72 | 0.72 | 0.70 | 0.72 | 0.69 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.64 | 0.63 | 0.60 | 0.58 | 0.58 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 37,657 ÷ 52,245 = 0.72
2 Click competitor name to see calculations.
| Solvency 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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019. |
Debt to Capital (including Operating Lease Liability)
Caterpillar Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 5,166 | 5,723 | 4,837 | 7,303 | 6,967 | |
| Long-term debt due within one year | 6,210 | 5,830 | 6,194 | 6,662 | 5,879 | |
| Long-term debt due after one year | 26,281 | 25,000 | 23,847 | 22,818 | 25,247 | |
| Total debt | 37,657 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Current operating lease liabilities (recognized in Other current liabilities) | 173 | — | — | — | — | |
| Noncurrent operating lease liabilities (recognized in Other liabilities) | 461 | — | — | — | — | |
| Total debt (including operating lease liability) | 38,291 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Equity attributable to common stockholders | 14,588 | 14,039 | 13,697 | 13,137 | 14,809 | |
| Total capital (including operating lease liability) | 52,879 | 50,592 | 48,575 | 49,920 | 52,902 | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.72 | 0.72 | 0.72 | 0.74 | 0.72 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Illinois Tool Works Inc. | 0.72 | 0.69 | 0.64 | 0.65 | 0.59 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Industrial Engineering | 0.72 | 0.72 | 0.70 | 0.72 | 0.69 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.65 | 0.63 | 0.60 | 0.58 | 0.58 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 38,291 ÷ 52,879 = 0.72
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Caterpillar Inc.’s debt to capital ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Assets
Caterpillar Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 5,166 | 5,723 | 4,837 | 7,303 | 6,967 | |
| Long-term debt due within one year | 6,210 | 5,830 | 6,194 | 6,662 | 5,879 | |
| Long-term debt due after one year | 26,281 | 25,000 | 23,847 | 22,818 | 25,247 | |
| Total debt | 37,657 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Total assets | 78,453 | 78,509 | 76,962 | 74,704 | 78,497 | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.48 | 0.47 | 0.45 | 0.49 | 0.49 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Illinois Tool Works Inc. | 0.51 | 0.50 | 0.50 | 0.52 | 0.47 | |
| Debt to Assets, Sector | ||||||
| Industrial Engineering | 0.49 | 0.47 | 0.46 | 0.50 | 0.48 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.32 | 0.32 | 0.32 | 0.30 | 0.31 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 37,657 ÷ 78,453 = 0.48
2 Click competitor name to see calculations.
| Solvency 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 deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Assets (including Operating Lease Liability)
Caterpillar Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 5,166 | 5,723 | 4,837 | 7,303 | 6,967 | |
| Long-term debt due within one year | 6,210 | 5,830 | 6,194 | 6,662 | 5,879 | |
| Long-term debt due after one year | 26,281 | 25,000 | 23,847 | 22,818 | 25,247 | |
| Total debt | 37,657 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Current operating lease liabilities (recognized in Other current liabilities) | 173 | — | — | — | — | |
| Noncurrent operating lease liabilities (recognized in Other liabilities) | 461 | — | — | — | — | |
| Total debt (including operating lease liability) | 38,291 | 36,553 | 34,878 | 36,783 | 38,093 | |
| Total assets | 78,453 | 78,509 | 76,962 | 74,704 | 78,497 | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.49 | 0.47 | 0.45 | 0.49 | 0.49 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Illinois Tool Works Inc. | 0.53 | 0.50 | 0.50 | 0.52 | 0.47 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Industrial Engineering | 0.49 | 0.47 | 0.46 | 0.50 | 0.48 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.32 | 0.32 | 0.30 | 0.31 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 38,291 ÷ 78,453 = 0.49
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Caterpillar Inc.’s debt to assets ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
Financial Leverage
Caterpillar Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 78,453 | 78,509 | 76,962 | 74,704 | 78,497 | |
| Equity attributable to common stockholders | 14,588 | 14,039 | 13,697 | 13,137 | 14,809 | |
| Solvency Ratio | ||||||
| Financial leverage1 | 5.38 | 5.59 | 5.62 | 5.69 | 5.30 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Illinois Tool Works Inc. | 4.98 | 4.57 | 3.66 | 3.57 | 3.01 | |
| Financial Leverage, Sector | ||||||
| Industrial Engineering | 5.31 | 5.40 | 5.13 | 5.17 | 4.70 | |
| Financial Leverage, Industry | ||||||
| Industrials | 5.45 | 5.30 | 4.73 | 4.61 | 4.41 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Financial leverage = Total assets ÷ Equity attributable to common stockholders
= 78,453 ÷ 14,588 = 5.38
2 Click competitor name to see calculations.
| Solvency 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 decreased from 2017 to 2018 and from 2018 to 2019. |
Interest Coverage
Caterpillar Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Profit (loss) attributable to common stockholders | 6,093 | 6,147 | 754 | (67) | 2,102 | |
| Add: Net income attributable to noncontrolling interest | 1 | 1 | 5 | 8 | 11 | |
| Add: Income tax expense | 1,746 | 1,698 | 3,339 | 192 | 742 | |
| Add: Interest expense excluding Financial Products | 421 | 404 | 531 | 505 | 507 | |
| Earnings before interest and tax (EBIT) | 8,261 | 8,250 | 4,629 | 638 | 3,362 | |
| Solvency Ratio | ||||||
| Interest coverage1 | 19.62 | 20.42 | 8.72 | 1.26 | 6.63 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Illinois Tool Works Inc. | 15.88 | 14.21 | 13.58 | 13.27 | 13.03 | |
| Interest Coverage, Sector | ||||||
| Industrial Engineering | 18.33 | 18.00 | 10.31 | 5.10 | 8.60 | |
| Interest Coverage, Industry | ||||||
| Industrials | 6.63 | 6.52 | 7.49 | 7.86 | 10.13 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 8,261 ÷ 421 = 19.62
2 Click competitor name to see calculations.
| Solvency 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 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
Fixed Charge Coverage
Caterpillar Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Profit (loss) attributable to common stockholders | 6,093 | 6,147 | 754 | (67) | 2,102 | |
| Add: Net income attributable to noncontrolling interest | 1 | 1 | 5 | 8 | 11 | |
| Add: Income tax expense | 1,746 | 1,698 | 3,339 | 192 | 742 | |
| Add: Interest expense excluding Financial Products | 421 | 404 | 531 | 505 | 507 | |
| Earnings before interest and tax (EBIT) | 8,261 | 8,250 | 4,629 | 638 | 3,362 | |
| Add: Operating lease cost | 232 | 322 | 331 | 375 | 371 | |
| Earnings before fixed charges and tax | 8,493 | 8,572 | 4,960 | 1,013 | 3,733 | |
| Interest expense excluding Financial Products | 421 | 404 | 531 | 505 | 507 | |
| Operating lease cost | 232 | 322 | 331 | 375 | 371 | |
| Fixed charges | 653 | 726 | 862 | 880 | 878 | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 13.01 | 11.81 | 5.75 | 1.15 | 4.25 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Illinois Tool Works Inc. | 10.84 | 9.91 | 9.61 | 9.12 | 8.93 | |
| Fixed Charge Coverage, Sector | ||||||
| Industrial Engineering | 12.27 | 11.15 | 6.93 | 3.46 | 5.57 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.24 | 3.98 | 4.41 | 4.63 | 5.62 | |
Based on: 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), 10-K (filing date: 2016-02-16).
1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 8,493 ÷ 653 = 13.01
2 Click competitor name to see calculations.
| Solvency 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 2017 to 2018 and from 2018 to 2019. |