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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Solvency Ratios (Summary)
Caterpillar Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-06-30), 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 of the entity demonstrates a high degree of stability in asset and capital composition, paired with a significantly strengthened capacity to service debt obligations over the analyzed period.
- Debt to Equity and Financial Leverage
- Leverage metrics exhibit a cyclical pattern. The debt to equity ratio peaked early in the period at 2.35 in June 2022, followed by a gradual decline to a low of 1.81 by September 2023. A subsequent upward trajectory is observed from 2024 through June 2026, where the ratio returned to 2.33. Financial leverage mirrors this trend, moving from 4.82 in March 2022 to a low of 4.24 in September 2023, before increasing to a period high of 5.29 by June 2026.
- Debt to Capital and Debt to Assets
- These ratios remain remarkably consistent, indicating a disciplined maintenance of the overall capital structure. Debt to capital fluctuates within a narrow band between 0.64 and 0.70, while the debt to assets ratio remains nearly flat, ranging only between 0.43 and 0.46. This stability suggests that the proportion of total liabilities relative to the total asset base and total capital has been kept constant despite fluctuations in equity.
- Interest Coverage
- A strong upward trend in the interest coverage ratio is observed, signifying improved debt serviceability. The ratio increased from 19.10 in March 2022 to a peak of 27.68 in March 2024. While a slight contraction occurred throughout 2024 and 2025, the ratio stabilized and returned to 27.68 by June 2026. This consistently high value indicates that earnings are more than sufficient to cover interest expenses, providing a substantial margin of safety.
Debt Ratios
Coverage Ratios
Debt to Equity
Caterpillar Inc., debt to equity calculation (quarterly data)
| Jun 30, 2026 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity attributable to common shareholders
= ÷ =
2 Click competitor name to see calculations.
The solvency profile indicates a period of relative stability in leverage followed by a notable increase in total debt obligations toward the conclusion of the observed timeframe. While total debt remained largely range-bound between 36.5 billion and 38.4 billion US dollars from March 2022 through December 2024, a significant upward trajectory emerged starting in March 2025, culminating in a peak of 45.1 billion US dollars by June 2026.
- Total Debt Trends
- A period of consolidation is evident between March 2022 and December 2024, with debt levels fluctuating minimally. However, a sharp escalation occurred in 2025 and 2026, with total debt increasing by approximately 17% from the December 2024 level of 38.4 billion US dollars to 45.1 billion US dollars by June 2026.
- Shareholders' Equity Volatility
- Equity attributable to common shareholders exhibited significant volatility throughout the period. Values fluctuated between a low of 15.5 billion US dollars in September 2022 and a high of 21.3 billion US dollars in December 2025. This lack of a linear trend suggests active capital management or fluctuating retained earnings.
- Debt to Equity Ratio Dynamics
- The debt to equity ratio reflects the interplay between rising debt and volatile equity. The ratio declined from 2.20 in March 2022 to a period low of 1.81 in September 2023, representing a temporary improvement in solvency. This trend reversed in 2024 and 2025, with the ratio climbing back to 2.33 by June 2026, the highest point in the analyzed period.
Overall, the trend reveals an increasing reliance on debt financing starting in 2025. The expansion of the debt to equity ratio toward the end of the period suggests a shift toward a more leveraged capital structure, as the growth in total debt outpaced the fluctuations in shareholders' equity.
Debt to Capital
Caterpillar Inc., debt to capital calculation (quarterly data)
| Jun 30, 2026 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The solvency profile exhibits a high degree of stability over the period from March 31, 2022, to June 30, 2026. Despite fluctuations in nominal values, the organizational approach to leverage remains consistent, with the debt-to-capital ratio maintaining a tight range throughout the observed timeframe.
- Total Debt Trends
- Total debt remained relatively range-bound between approximately US$ 36.5 billion and US$ 38.4 billion from March 2022 through December 2024. However, a distinct upward trend emerged beginning in March 2025, with debt increasing from US$ 38.59 billion to a peak of US$ 45.15 billion by June 2026. This represents a notable acceleration in borrowing during the final six quarters of the analyzed period.
- Total Capital Trends
- Total capital followed a similar trajectory to total debt, characterized by moderate fluctuations between US$ 52.1 billion and US$ 57.9 billion during the first three years. Starting in 2025, total capital entered a growth phase, rising from US$ 56.66 billion in March 2025 to US$ 64.54 billion by June 2026. The growth in total capital suggests a proportional increase in the overall funding base to support the rising debt levels.
- Debt to Capital Ratio Analysis
- The debt-to-capital ratio demonstrates minimal volatility, fluctuating between a low of 0.64 in September 2023 and a high of 0.70 in several quarters, including the period end in June 2026. The stability of this ratio, particularly during the period of increased nominal debt in 2025 and 2026, indicates that debt was increased in direct proportion to total capital. This suggests a disciplined adherence to a specific target capital structure, ensuring that the leverage ratio does not deviate significantly from the 64% to 70% range.
Debt to Assets
Caterpillar Inc., debt to assets calculation (quarterly data)
| Jun 30, 2026 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of solvency metrics from March 31, 2022, through June 30, 2026, reveals a high degree of stability in the capital structure. Despite fluctuations in absolute values for both debt and assets, the proportion of assets financed through debt has remained remarkably consistent, indicating a disciplined approach to leverage management.
- Total Debt Trajectory
- A period of relative stability is observed between March 2022 and December 2023, with total debt fluctuating within a narrow range of approximately US$ 36.5 billion to US$ 37.9 billion. Starting in June 2025, a more pronounced upward trend emerges, with debt increasing from US$ 40.7 billion to a peak of US$ 45.1 billion by June 30, 2026. This indicates an increase in total borrowing during the latter stages of the observed period.
- Total Asset Growth
- Total assets exhibit a general upward trend, growing from US$ 82.3 billion in March 2022 to US$ 102.6 billion by June 2026. While the growth is consistent over the long term, periodic contractions are noted, specifically in March 2024 and March 2025. The overall expansion of the asset base suggests continued investment or acquisition of resources over the five-quarter cycle.
- Debt to Assets Ratio Stability
- The debt to assets ratio remains tightly range-bound between 0.43 and 0.46. A slight decline is noted from 0.46 in early 2022 to a low of 0.43 in late 2023, followed by a return to 0.44 and 0.45 in subsequent periods. The fact that the ratio remains stable despite the significant nominal increase in total debt suggests that the growth in liabilities has been proportionally offset by the expansion of the asset base.
In summary, the solvency position is characterized by a balanced expansion. The maintenance of the debt to assets ratio near 0.44 suggests that the company is scaling its operations and liabilities in tandem, avoiding an increase in financial risk while expanding its total balance sheet.
Financial Leverage
Caterpillar Inc., financial leverage calculation (quarterly data)
| Jun 30, 2026 | 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: 2026-06-30), 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 Q2 2026 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity attributable to common shareholders
= ÷ =
2 Click competitor name to see calculations.
The balance sheet exhibits a general expansion in total assets over the analyzed period, transitioning from 82,276 million USD in March 2022 to a peak of 102,609 million USD by June 2026. This growth is accompanied by fluctuations in shareholders' equity, resulting in a dynamic financial leverage profile characterized by periods of both deleveraging and increased financial risk.
- Asset Base Expansion
- Total assets demonstrated a long-term upward trajectory, despite a temporary contraction during the first half of 2024. A significant growth phase is observed between March 2025 and June 2026, where assets increased from 84,974 million USD to 102,609 million USD, representing a substantial increase in the company's resource base.
- Shareholders' Equity Volatility
- Equity attributable to common shareholders showed inconsistent movement, reaching a peak of 21,318 million USD in December 2025 before declining to 19,395 million USD by June 2026. The lack of a steady upward trend in equity, despite the growth in total assets, has been a primary driver of the fluctuations in the leverage ratio.
- Financial Leverage Trends
- The financial leverage ratio experienced several distinct phases. An initial rise peaked at 5.19 in September 2022, followed by a concerted deleveraging trend that reached a period low of 4.24 in September 2023. After maintaining relative stability between 4.45 and 4.84 through 2024 and 2025, the ratio accelerated sharply in the first half of 2026, reaching its maximum value of 5.29.
- Solvency and Risk Interpretation
- The increase in the financial leverage ratio to 5.29 by June 2026 indicates a higher reliance on debt financing relative to equity. This trajectory suggests that asset expansion in the final quarters was funded more heavily through liabilities than through equity accumulation, thereby increasing the company's financial leverage and potential risk profile.
Interest Coverage
Caterpillar Inc., interest coverage calculation (quarterly data)
| Jun 30, 2026 | 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: 2026-06-30), 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 Q2 2026 Calculation
Interest coverage
= (EBITQ2 2026
+ EBITQ1 2026
+ EBITQ4 2025
+ EBITQ3 2025)
÷ (Interest expenseQ2 2026
+ Interest expenseQ1 2026
+ Interest expenseQ4 2025
+ Interest expenseQ3 2025)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The interest coverage analysis indicates a robust solvency position characterized by a general upward trajectory in the company's ability to service its debt obligations. The interest coverage ratio expanded from 19.10 in March 2022 to a peak of 27.68 in March 2024, reflecting a significant improvement in the margin of safety regarding interest payments.
- Earnings Before Interest and Tax (EBIT) Trends
- Operating profitability exhibited strong growth during the initial period, rising from 2,115 million USD in March 2022 to a peak of 3,803 million USD in June 2023. While subsequent quarters showed some volatility, with a low of 2,693 million USD in March 2025, the trend concludes with a substantial increase to 4,783 million USD by June 2026. This growth in EBIT serves as the primary driver for the improved solvency ratios.
- Interest Expense Behavior
- Interest expenses, excluding financial products, remained relatively stable throughout the analyzed timeframe. Expenses fluctuated within a narrow corridor, ranging from a minimum of 107 million USD in December 2024 to a maximum of 143 million USD in March 2024. The lack of significant escalation in interest costs, despite fluctuations in EBIT, contributed to the overall stability of the interest coverage ratio.
- Interest Coverage Ratio Dynamics
- The ratio demonstrated a consistent climb from March 2022 through March 2024, peaking at 27.68. A period of moderate contraction followed, where the ratio declined to 24.21 by December 2025, correlating with the dip in EBIT observed during the same period. However, the ratio recovered to 27.68 by June 2026. The consistently high values across all quarters suggest that operating earnings are more than sufficient to cover interest obligations, indicating very low credit risk.