Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Solvency Ratios (Summary)
Caterpillar Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
The solvency profile exhibits overall stability with moderate fluctuations in leverage and a consistently strong capacity to service interest obligations over the analyzed period. While leverage ratios experienced cyclical movements, the fundamental capital structure remained steady, and interest coverage remained well above critical thresholds.
- Leverage and Equity Ratios
- The debt-to-equity ratio demonstrated notable volatility, starting at 2.20 in March 2022 and reaching a peak of 2.35 in June 2022. A period of deleveraging occurred through September 2023, where the ratio reached its lowest point of 1.81. Subsequently, a gradual upward trend is observed, culminating in a rise to 2.31 by March 2026. Financial leverage mirrored this trajectory, peaking at 5.19 in September 2022, dipping to 4.24 in September 2023, and returning to 5.12 by the end of the period.
- Capital Structure Stability
- Debt-to-capital and debt-to-assets ratios remained remarkably consistent. The debt-to-capital ratio fluctuated narrowly between 0.64 and 0.70, indicating a disciplined approach to the proportion of debt within the total capital mix. Similarly, the debt-to-assets ratio stayed within a tight range of 0.43 to 0.46, suggesting that approximately 44% to 46% of total assets were consistently financed through debt.
- Interest Coverage and Debt Service
- A significant improvement in interest coverage was observed from March 2022 (19.10) through March 2024, where it peaked at 27.68. This indicates a substantial increase in the ability to meet interest payments from operating earnings. Following this peak, a gradual softening is noted, with the ratio declining to 24.21 by December 2025 before a slight recovery to 24.64 in March 2026. Despite this mild decline, the ratio remains high, reflecting a low risk of insolvency.
In summary, the analysis reveals a company that maintains a consistent asset-to-debt relationship while allowing for cyclical adjustments in equity-based leverage. The consistently high interest coverage ratio provides a significant buffer against financial distress, offsetting the increases in debt-to-equity observed toward the end of the reporting period.
Debt Ratios
Coverage Ratios
Debt to Equity
Caterpillar Inc., debt to equity calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Long-term debt due within one year | |||||||||||||||||||||||
| Long-term debt due after one year | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Shareholders’ equity attributable to common shareholders | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity attributable to common shareholders
= ÷ =
2 Click competitor name to see calculations.
The analysis of solvency metrics reveals a period of relative stability in debt levels followed by a marked increase in leverage toward the end of the observed period. The financial structure is characterized by fluctuating equity levels and a debt-to-equity ratio that oscillates between 1.81 and 2.35.
- Total Debt Trends
- Total debt remained remarkably stable from March 2022 through December 2024, fluctuating within a narrow range between 36.5 billion and 38.4 billion US dollars. However, a distinct upward trend emerged starting in March 2025, with debt levels climbing to a peak of 43.3 billion US dollars by December 2025. This represents a significant increase in total borrowings during the final segments of the reporting period.
- Shareholders' Equity Volatility
- Equity attributable to common shareholders exhibited significant volatility. A low point was observed in September 2022 at 15.6 billion US dollars, followed by a recovery to a peak of 20.5 billion US dollars in September 2023. Subsequent fluctuations continued, with equity dipping to 17.1 billion US dollars in June 2024 before rising again to 21.3 billion US dollars by December 2025, and finally decreasing to 18.7 billion US dollars by March 2026.
- Debt to Equity Ratio Interpretation
- The debt-to-equity ratio reflects the interplay between rising debt and volatile equity. Leverage peaked early in the period at 2.35 in June 2022 and reached its lowest point of 1.81 in September 2023, coinciding with a peak in shareholders' equity. Following this low, the ratio trended upward, characterized by a cyclical pattern throughout 2024 and 2025. The period concludes with a sharp increase to 2.31 in March 2026, indicating a return to higher leverage levels driven by both an increase in total debt and a contraction in equity.
Debt to Capital
Caterpillar Inc., debt to capital calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Long-term debt due within one year | |||||||||||||||||||||||
| Long-term debt due after one year | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Shareholders’ equity attributable to common shareholders | |||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The solvency profile indicates a period of relative stability in the capital structure, characterized by a consistent leverage ratio despite an upward trajectory in absolute debt and capital levels during the latter portion of the analyzed period. The synchronicity between the growth of total liabilities and the total capital base suggests a managed approach to financing expansion or operational requirements.
- Total Debt Trends
- Total debt remained remarkably stable from March 2022 through December 2023, fluctuating within a narrow band around 37 billion USD. A modest increase was observed throughout 2024, followed by a more significant acceleration in 2025, where debt levels rose from 38.59 billion USD in December 2024 to a peak of 43.33 billion USD in December 2025, before settling at 43.07 billion USD in March 2026.
- Total Capital Evolution
- Total capital exhibited fluctuations between 52.12 billion USD and 57.90 billion USD from early 2022 through March 2024. A distinct growth phase is evident starting in June 2025, with capital expanding to 64.65 billion USD by December 2025. This increase in the total capital base occurred in tandem with the rise in total debt, which mitigated the impact of increased borrowing on the overall solvency ratio.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained stable, oscillating within a tight range between 0.64 and 0.70. A period of slight deleveraging is observed between March 2023 and September 2023, where the ratio reached its lowest point of 0.64. However, the ratio returned to its upper bound of 0.70 by March 2026. The lack of significant volatility in this ratio, despite the multi-billion dollar increase in debt during 2025, confirms that the company maintained a consistent proportional balance between debt and total capital.
Debt to Assets
Caterpillar Inc., debt to assets calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Long-term debt due within one year | |||||||||||||||||||||||
| Long-term debt due after one year | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The solvency profile exhibits a high degree of stability over the analyzed period from March 2022 to March 2026. The debt-to-assets ratio maintained a narrow range between 0.43 and 0.46, indicating a consistent approach to leveraging the balance sheet relative to total asset growth.
- Total Debt Trends
- Total debt remained relatively stagnant between March 2022 and December 2024, fluctuating within a tight band from 36,525 million USD to 38,409 million USD. A notable upward shift occurred starting in March 2025, with debt increasing to a peak of 43,330 million USD by December 2025, before stabilizing slightly at 43,066 million USD in March 2026.
- Total Asset Trajectory
- Assets demonstrated moderate volatility between 2022 and 2024, ranging from a low of 80,907 million USD to a high of 87,476 million USD. A period of significant expansion was observed throughout 2025, where assets reached a maximum value of 98,585 million USD in December 2025, representing a substantial increase in the company's resource base.
- Debt to Assets Ratio Interpretation
- The ratio began at 0.46 in early 2022 and reached its lowest point of 0.43 during the second half of 2023, suggesting a temporary improvement in solvency or a period of asset growth outpacing debt accumulation. Despite the absolute increase in total debt during 2025, the ratio remained stable at 0.44 to 0.45 because the growth in total assets occurred proportionally to the increase in liabilities.
Financial Leverage
Caterpillar Inc., financial leverage calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Shareholders’ equity attributable to common shareholders | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity attributable to common shareholders
= ÷ =
2 Click competitor name to see calculations.
The financial leverage of the organization exhibits a cyclical pattern over the analyzed period from March 2022 to March 2026. While total assets showed a general expansion, shareholders' equity experienced significant volatility, which directly influenced the stability of the financial leverage ratio.
- Asset Growth and Equity Volatility
- Total assets increased from 82,276 million US$ in March 2022 to 95,550 million US$ by March 2026, representing a long-term expansion of the asset base. This growth peaked in December 2025 at 98,585 million US$. Conversely, shareholders' equity attributable to common shareholders demonstrated instability, fluctuating between a low of 15,591 million US$ in September 2022 and a high of 21,318 million US$ in December 2025.
- Financial Leverage Trends
- The financial leverage ratio peaked early in the period at 5.19 in September 2022, followed by a sustained period of deleveraging that reached a minimum of 4.24 in September 2023. Following this low point, the ratio trended upward through 2024 and 2025, eventually returning to a high of 5.12 by March 31, 2026.
- Correlation Analysis
- A strong correlation is observed between the fluctuations in equity and the resulting leverage ratio. The most significant reduction in leverage during the third quarter of 2023 was driven by a substantial increase in shareholders' equity. In contrast, the sharp increase in leverage to 5.12 in March 2026 is attributable to a contraction in equity, which fell to 18,661 million US$ from 21,318 million US$ in the preceding quarter, despite the maintenance of a high asset base.
Interest Coverage
Caterpillar Inc., interest coverage calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Profit attributable to common stockholders | |||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||
| Add: Interest expense excluding Financial Products | |||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Interest coverage
= (EBITQ1 2026
+ EBITQ4 2025
+ EBITQ3 2025
+ EBITQ2 2025)
÷ (Interest expenseQ1 2026
+ Interest expenseQ4 2025
+ Interest expenseQ3 2025
+ Interest expenseQ2 2025)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial trajectory from March 2022 through March 2026 demonstrates a robust capacity to service interest obligations, characterized by a significant expansion in operating profitability relative to debt costs.
- Earnings Before Interest and Tax (EBIT) Performance
- A substantial upward trend in EBIT is observed between March 2022 and June 2023, where earnings grew from US$ 2,115 million to a peak of US$ 3,803 million. Following this peak, EBIT entered a period of relative stabilization, fluctuating between US$ 2,693 million and US$ 3,685 million throughout 2024 and 2025, ending at US$ 3,352 million in March 2026.
- Interest Expense Dynamics
- Interest expenses, excluding financial products, remained relatively stable over the analyzed period. Costs fluctuated within a narrow range, from a minimum of US$ 107 million in December 2024 to a maximum of US$ 143 million in March 2024. The limited variance in these expenses suggests a consistent debt service requirement across the multi-year period.
- Interest Coverage Ratio Analysis
- The interest coverage ratio exhibited a strong growth phase, rising from 19.10 in March 2022 to a peak of 27.68 in March 2024. This improvement was primarily driven by the acceleration of EBIT. From March 2024 onward, the ratio experienced a moderate correction, settling into a range between 24.21 and 26.88. The final reading of 24.64 in March 2026 indicates a continued and substantial margin of safety in meeting interest obligations.