Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Caterpillar Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
The long-term investment activity ratios demonstrate varied performance over the five-year period. Generally, ratios increased from 2021 to 2023, followed by a decline in 2024 and 2025. This suggests a period of increasing efficiency in asset utilization, peaking in 2023, before experiencing a moderation in subsequent years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio increased from 3.99 in 2021 to 5.04 in 2023, indicating improved efficiency in generating revenue from fixed assets. However, this ratio decreased to 4.59 in 2024 and further to 4.23 in 2025, suggesting a diminishing ability to generate sales from its fixed asset base. This decline could be attributable to increased investment in fixed assets without a corresponding increase in revenue, or a slowdown in sales.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- A similar trend is observed in the net fixed asset turnover ratio including operating leases and right-of-use assets. The ratio rose from 3.79 in 2021 to 4.83 in 2023, then decreased to 4.40 in 2024 and 4.04 in 2025. The inclusion of these lease assets generally results in a lower turnover ratio compared to the standard net fixed asset turnover, reflecting the larger asset base considered. The pattern of increase followed by decline mirrors that of the standard ratio.
- Total Asset Turnover
- The total asset turnover ratio exhibited an upward trend from 0.58 in 2021 to 0.73 in 2023, signifying enhanced efficiency in utilizing all assets to generate revenue. A subsequent decrease to 0.70 in 2024 and 0.65 in 2025 indicates a slight reduction in this efficiency. This suggests that while the company was becoming more effective at converting its assets into sales, this trend began to reverse in the later years of the period.
- Equity Turnover
- The equity turnover ratio increased from 2.92 in 2021 to 3.57 in 2022, then decreased to 3.28 in 2023, 3.15 in 2024, and 3.00 in 2025. This indicates a fluctuating relationship between revenue generated and shareholder equity. The initial increase suggests improved profitability relative to equity, but the subsequent decline suggests a weakening of this relationship. The decrease in the latter years may indicate slower revenue growth relative to equity or an increase in equity without a corresponding increase in revenue.
Overall, the observed trends suggest a period of improving asset utilization efficiency peaking in 2023, followed by a moderation in performance in 2024 and 2025. Further investigation would be required to determine the underlying causes of these shifts, such as changes in investment strategy, market conditions, or operational performance.
Net Fixed Asset Turnover
Caterpillar Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of Machinery, Power & Energy | 63,980) | 61,363) | 63,869) | 56,574) | 48,188) | |
| Property, plant and equipment, net | 15,140) | 13,361) | 12,680) | 12,028) | 12,090) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 4.23 | 4.59 | 5.04 | 4.70 | 3.99 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 5.82 | 5.83 | 7.30 | 6.31 | 5.70 | |
| Eaton Corp. plc | — | 6.67 | 6.57 | 6.59 | 6.41 | |
| GE Aerospace | 6.07 | 5.65 | 6.06 | 5.96 | 5.47 | |
| Honeywell International Inc. | — | 6.22 | 6.48 | 6.48 | 6.18 | |
| Lockheed Martin Corp. | 8.46 | 8.14 | 8.07 | 8.27 | 8.83 | |
| RTX Corp. | 5.25 | 5.02 | 4.38 | 4.42 | 4.30 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Capital Goods | — | 5.75 | 5.98 | 5.79 | 5.46 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | — | 2.76 | 2.86 | 2.94 | 2.72 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover = Sales of Machinery, Power & Energy ÷ Property, plant and equipment, net
= 63,980 ÷ 15,140 = 4.23
2 Click competitor name to see calculations.
The net fixed asset turnover ratio exhibits a generally increasing trend from 2021 to 2023, followed by a decline in the subsequent two years. This indicates a changing relationship between sales generated and the investment in fixed assets over the observed period.
- Net Fixed Asset Turnover
- The ratio increased from 3.99 in 2021 to 4.70 in 2022, representing a 17.8% improvement in the efficiency of fixed asset utilization. This suggests that the company was generating more sales revenue for each dollar invested in property, plant, and equipment.
- Further improvement was observed in 2023, with the ratio reaching 5.04, a 7.2% increase from the prior year. This continued positive trend suggests effective management of fixed assets and strong sales performance.
- However, the ratio decreased to 4.59 in 2024, a 9.1% decline. This suggests a less efficient utilization of fixed assets, potentially due to slower sales growth relative to the increase in net fixed assets.
- The downward trend continued into 2025, with the ratio falling to 4.23, a 7.8% decrease from 2024. This further indicates a diminishing return on investment in fixed assets, potentially signaling a need to evaluate asset utilization strategies or investigate factors impacting sales.
Concurrently, sales of Machinery, Power & Energy increased from US$48,188 million in 2021 to US$63,869 million in 2023, before decreasing slightly to US$61,363 million in 2024 and then increasing again to US$63,980 million in 2025. Property, plant and equipment, net, also increased consistently throughout the period, from US$12,090 million in 2021 to US$15,140 million in 2025.
The initial increases in the net fixed asset turnover ratio coincided with substantial sales growth. However, the subsequent decline in the ratio, despite continued sales growth in 2025, suggests that the growth in fixed assets outpaced the growth in sales, leading to reduced efficiency. Further investigation into the composition of fixed asset investments and their contribution to sales would be beneficial.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Caterpillar Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of Machinery, Power & Energy | 63,980) | 61,363) | 63,869) | 56,574) | 48,188) | |
| Property, plant and equipment, net | 15,140) | 13,361) | 12,680) | 12,028) | 12,090) | |
| Operating lease right-of-use assets (recognized in Other assets) | 708) | 592) | 556) | 564) | 625) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 15,848) | 13,953) | 13,236) | 12,592) | 12,715) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 4.04 | 4.40 | 4.83 | 4.49 | 3.79 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | 5.12 | 4.97 | 6.30 | 5.55 | 5.04 | |
| Eaton Corp. plc | — | 5.49 | 5.55 | 5.58 | 5.60 | |
| GE Aerospace | 5.30 | 4.83 | 5.17 | 5.08 | 4.55 | |
| Honeywell International Inc. | — | 5.33 | 5.50 | 5.58 | 5.28 | |
| Lockheed Martin Corp. | 7.62 | 7.30 | 7.14 | 7.27 | 7.54 | |
| RTX Corp. | 4.72 | 4.50 | 3.96 | 3.95 | 3.80 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Capital Goods | — | 5.11 | 5.31 | 5.13 | 4.80 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | — | 2.41 | 2.49 | 2.54 | 2.34 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Sales of Machinery, Power & Energy ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 63,980 ÷ 15,848 = 4.04
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, alongside its component figures, demonstrates a fluctuating pattern over the five-year period. Sales of Machinery, Power & Energy generally increased, while the value of property, plant, and equipment, net (including operating lease, right-of-use asset) also exhibited an overall upward trend, though not consistently.
- Sales Trend
- Sales of Machinery, Power & Energy increased from US$48,188 million in 2021 to US$56,574 million in 2022, representing a substantial gain. Further growth was observed in 2023, reaching US$63,869 million. A slight decrease occurred in 2024 to US$61,363 million, followed by a recovery to US$63,980 million in 2025.
- Fixed Asset Trend
- The net value of property, plant, and equipment, including operating leases and right-of-use assets, experienced a minor decline from US$12,715 million in 2021 to US$12,592 million in 2022. Subsequent years showed increases, reaching US$13,236 million in 2023, US$13,953 million in 2024, and US$15,848 million in 2025. The increase from 2024 to 2025 is notably larger than previous annual increases.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio increased from 3.79 in 2021 to 4.49 in 2022, indicating improved efficiency in generating sales from fixed assets. This upward trend continued to 4.83 in 2023, representing the highest ratio value within the observed period. A decrease to 4.40 was recorded in 2024, and a further decline to 4.04 occurred in 2025. While the ratio remains above the 2021 level, the recent downward trend suggests a diminishing ability to generate sales per dollar of fixed assets, potentially due to the faster growth in fixed assets compared to sales in the latter years.
The observed fluctuations in the net fixed asset turnover ratio warrant further investigation. The increasing investment in property, plant, and equipment may not be translating into proportional sales growth in the most recent periods, potentially indicating a need to evaluate asset utilization strategies.
Total Asset Turnover
Caterpillar Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of Machinery, Power & Energy | 63,980) | 61,363) | 63,869) | 56,574) | 48,188) | |
| Total assets | 98,585) | 87,764) | 87,476) | 81,943) | 82,793) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.65 | 0.70 | 0.73 | 0.69 | 0.58 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 0.53 | 0.43 | 0.57 | 0.49 | 0.45 | |
| Eaton Corp. plc | — | 0.65 | 0.60 | 0.59 | 0.58 | |
| GE Aerospace | 0.33 | 0.29 | 0.40 | 0.39 | 0.36 | |
| Honeywell International Inc. | — | 0.51 | 0.60 | 0.57 | 0.53 | |
| Lockheed Martin Corp. | 1.25 | 1.28 | 1.29 | 1.25 | 1.32 | |
| RTX Corp. | 0.52 | 0.50 | 0.43 | 0.42 | 0.40 | |
| Total Asset Turnover, Sector | ||||||
| Capital Goods | — | 0.54 | 0.57 | 0.54 | 0.50 | |
| Total Asset Turnover, Industry | ||||||
| Industrials | — | 0.65 | 0.67 | 0.66 | 0.58 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Total asset turnover = Sales of Machinery, Power & Energy ÷ Total assets
= 63,980 ÷ 98,585 = 0.65
2 Click competitor name to see calculations.
The analysis reveals a fluctuating pattern in the total asset turnover ratio over the five-year period. Initially, the ratio demonstrated improvement, followed by a slight decline and then a further decrease.
- Total Asset Turnover
- The total asset turnover ratio increased from 0.58 in 2021 to 0.69 in 2022, indicating improved efficiency in utilizing assets to generate sales. This positive trend continued into 2023, with the ratio reaching a peak of 0.73. However, a slight decrease to 0.70 was observed in 2024. The most significant change occurred in 2025, where the ratio declined to 0.65. This represents the lowest value within the observed period.
- The increase in the ratio from 2021 to 2023 suggests that the company became more effective at converting its investments in assets into revenue. The subsequent declines in 2024 and 2025 could be attributed to several factors, including a slower growth in sales relative to asset increases, or potentially an increase in assets that have not yet translated into proportional sales gains.
- Sales of Machinery, Power & Energy generally increased from 2021 to 2023, aligning with the increase in the total asset turnover ratio. While sales experienced a slight decrease in 2024, they recovered in 2025. However, the growth in total assets outpaced sales growth in both 2024 and 2025, contributing to the observed decline in the asset turnover ratio.
The observed trend suggests a potential weakening in the relationship between asset levels and sales generation in the later years of the period. Further investigation into the composition of asset increases and the factors influencing sales growth would be necessary to fully understand the underlying drivers of this trend.
Equity Turnover
Caterpillar Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of Machinery, Power & Energy | 63,980) | 61,363) | 63,869) | 56,574) | 48,188) | |
| Equity attributable to common shareholders | 21,318) | 19,491) | 19,494) | 15,869) | 16,484) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 3.00 | 3.15 | 3.28 | 3.57 | 2.92 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | 16.40 | — | — | — | — | |
| Eaton Corp. plc | — | 1.35 | 1.22 | 1.22 | 1.20 | |
| GE Aerospace | 2.27 | 1.82 | 2.36 | 2.02 | 1.76 | |
| Honeywell International Inc. | — | 2.07 | 2.31 | 2.12 | 1.85 | |
| Lockheed Martin Corp. | 11.17 | 11.22 | 9.89 | 7.12 | 6.12 | |
| RTX Corp. | 1.36 | 1.34 | 1.15 | 0.92 | 0.88 | |
| Equity Turnover, Sector | ||||||
| Capital Goods | — | 2.73 | 3.07 | 2.54 | 2.28 | |
| Equity Turnover, Industry | ||||||
| Industrials | — | 2.92 | 3.33 | 3.06 | 2.63 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Equity turnover = Sales of Machinery, Power & Energy ÷ Equity attributable to common shareholders
= 63,980 ÷ 21,318 = 3.00
2 Click competitor name to see calculations.
The equity turnover ratio demonstrates a fluctuating pattern over the five-year period. Initially, an increase is observed, followed by a period of decline. Sales of Machinery, Power & Energy generally increased over the period, while equity attributable to common shareholders also showed an overall upward trend, though not consistently.
- Equity Turnover Trend
- The equity turnover ratio increased from 2.92 in 2021 to 3.57 in 2022, indicating a more efficient utilization of equity to generate sales. However, this was followed by a decrease to 3.28 in 2023 and further to 3.15 in 2024. The ratio continued to decline, reaching 3.00 in 2025. This suggests a diminishing efficiency in generating sales relative to the equity base in the latter part of the period.
- Sales Performance
- Sales of Machinery, Power & Energy increased from US$48,188 million in 2021 to US$56,574 million in 2022, and continued to rise to US$63,869 million in 2023. A slight decrease to US$61,363 million was noted in 2024, before recovering to US$63,980 million in 2025. This indicates generally positive sales momentum, with a minor contraction in 2024.
- Equity Changes
- Equity attributable to common shareholders decreased from US$16,484 million in 2021 to US$15,869 million in 2022. Subsequently, equity increased to US$19,494 million in 2023 and remained relatively stable at US$19,491 million in 2024. Further growth was observed in 2025, with equity reaching US$21,318 million. These fluctuations in equity likely influence the equity turnover ratio.
The combined effect of increasing sales and fluctuating equity levels resulted in the observed trend in the equity turnover ratio. While sales generally increased, the rate of increase in equity, particularly in the later years, contributed to the declining ratio. The decrease in the ratio from 2022 to 2025 suggests that more equity was required to generate each dollar of sales during that period.