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.
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Long-term Activity Ratios (Summary)
Caterpillar Inc., long-term (investment) activity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
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).
- Net fixed asset turnover
- The net fixed asset turnover ratio shows a noticeable upward trend from 3.15 in 2020 to a peak of 5.04 in 2023, indicating increasing efficiency in the use of fixed assets to generate sales over this period. However, a slight decline to 4.59 is observed in 2024, suggesting a potential reduction in this efficiency or changes in asset base management during the most recent year.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- This ratio follows a similar pattern to the net fixed asset turnover excluding lease assets, starting at 3.00 in 2020 and rising to a peak of 4.83 in 2023. The ratio then decreases moderately to 4.40 in 2024. The consistency in trend between these two measures suggests that leasing activities have a proportional impact on asset utilization efficiency, though the slight reduction in 2024 may indicate changes in lease portfolio or operational adjustments.
- Total asset turnover
- Total asset turnover demonstrates consistent improvement from 0.50 in 2020 to 0.73 in 2023, reflecting enhanced overall utilization of the company's asset base to generate revenue. Nonetheless, a minor decline to 0.70 in 2024 indicates a slight reduction in total asset productivity in the last year, although the level remains above earlier periods, pointing to sustained asset management effectiveness.
- Equity turnover
- Equity turnover also shows an increasing trend from 2.55 in 2020 to 3.57 in 2022, implying improved generation of sales relative to equity capital. However, unlike other turnover ratios, equity turnover decreases to 3.28 in 2023 and further to 3.15 in 2024. This downward movement may reflect rising equity levels or comparatively slower growth in sales, suggesting changes in capital structure or operational profit dynamics requiring further examination.
Net Fixed Asset Turnover
Caterpillar Inc., net fixed asset turnover 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) | ||||||
| Sales of Machinery, Energy & Transportation | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Capital Goods | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | ||||||
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
Net fixed asset turnover = Sales of Machinery, Energy & Transportation ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Sales of Machinery, Energy & Transportation
- The sales figures demonstrate a consistent upward trend from 2020 through 2023, increasing from $39,022 million in 2020 to $63,869 million in 2023. This represents substantial growth over the four-year period. However, a decline is observed in 2024 with sales falling to $61,363 million, indicating a potential slowdown or market adjustment after several years of growth.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment remained relatively stable from 2020 to 2022, with a slight decrease from $12,401 million to $12,028 million. Beginning in 2023, there is a noticeable increase, reaching $13,361 million in 2024. This suggests renewed investments or capital expenditures in the assets used in production or operations during the latter years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio shows an improving trend from 3.15 in 2020 to a peak of 5.04 in 2023. This increase indicates a rise in efficiency with which the company is generating sales from its fixed assets. However, in 2024, there is a decline to 4.59, suggesting a reduction in asset utilization efficiency or increased asset base not immediately matched by proportional sales growth.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Caterpillar Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of Machinery, Energy & Transportation | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease right-of-use assets (recognized in Other assets) | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Capital Goods | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | ||||||
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Sales of Machinery, Energy & Transportation ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
- Sales of Machinery, Energy & Transportation
- The sales figures demonstrate a consistent upward trend from 2020 through 2023, increasing from $39,022 million to $63,869 million. However, in 2024, there is a noticeable decline to $61,363 million, indicating a potential slowdown or market adjustment after several years of growth.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment shows a moderate fluctuation over the five-year period. After a slight decrease from $13,004 million in 2020 to $12,592 million in 2022, the asset base begins to increase again, reaching $13,953 million by 2024. This suggests a phase of asset reinvestment or expansion following a period of relative stability or modest decline.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The ratio exhibits strong improvement from 3.00 in 2020 to a peak of 4.83 in 2023, indicating increasing efficiency in utilizing fixed assets to generate sales. In 2024, the ratio decreases slightly to 4.40, but remains significantly higher than earlier years. This indicates that, despite the slight fall, the company continues to achieve high asset productivity compared to the base year.
- Overall Analysis
- The data highlights a period of growth in sales and improving asset utilization until 2023, followed by a minor decline in both sales and asset turnover in 2024. The increase in property and equipment assets after 2022 may reflect strategic capital expenditure aimed at supporting future operations. The slight reduction in sales and turnover ratio in 2024 could suggest external market challenges or internal operational adjustments impacting efficiency and revenue generation.
Total Asset Turnover
Caterpillar Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of Machinery, Energy & Transportation | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Total Asset Turnover, Sector | ||||||
| Capital Goods | ||||||
| Total Asset Turnover, Industry | ||||||
| Industrials | ||||||
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
Total asset turnover = Sales of Machinery, Energy & Transportation ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Sales of Machinery, Energy & Transportation
- Sales demonstrated a positive growth trajectory from 2020 through 2023, rising from 39,022 million US dollars to a peak of 63,869 million US dollars. This represents a cumulative increase exceeding 63% over the four-year period. However, in 2024, sales experienced a decline to 61,363 million US dollars, indicating a potential market or operational challenge following the expansive growth phase.
- Total assets
- Total assets showed a general upward trend with fluctuations. From 78,324 million US dollars in 2020, assets increased modestly to 82,793 million in 2021, then slightly decreased to 81,943 million in 2022. Subsequently, assets rose again to 87,476 million in 2023 and marginally to 87,764 million in 2024. Overall, total assets grew by approximately 12% from 2020 to 2024, indicating steady investment or accumulation of resources over the period.
- Total asset turnover
- The total asset turnover ratio exhibited consistent improvement from 0.5 in 2020 to a peak of 0.73 in 2023, suggesting enhanced efficiency in utilizing assets to generate sales. In 2024, the ratio decreased slightly to 0.7, which may correlate with the observed decline in sales and the stabilization of asset levels. Despite this minor retreat, the ratio remains higher than in the earlier years, underscoring improved operational efficiency over the five-year span.
- Summary
- Across the reviewed period, a general pattern of growth in sales and asset base was observed, coupled with increased efficiency in asset utilization. The decline in sales and asset turnover in 2024 warrants further investigation to determine underlying causes. The stability in total assets combined with slight sales contraction suggests potential market pressures or internal constraints impacting revenue generation despite steady asset levels.
Equity Turnover
Caterpillar Inc., equity turnover 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) | ||||||
| Sales of Machinery, Energy & Transportation | ||||||
| Equity attributable to common shareholders | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Equity Turnover, Sector | ||||||
| Capital Goods | ||||||
| Equity Turnover, Industry | ||||||
| Industrials | ||||||
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
Equity turnover = Sales of Machinery, Energy & Transportation ÷ Equity attributable to common shareholders
= ÷ =
2 Click competitor name to see calculations.
- Sales of Machinery, Energy & Transportation
- The sales figures demonstrate an overall upward trend from 2020 through 2023, rising from 39,022 million US dollars to 63,869 million US dollars. This indicates significant revenue growth in these segments over this period. However, in 2024, there is a noticeable decline in sales to 61,363 million US dollars, suggesting a potential deceleration or market challenge in that year.
- Equity attributable to common shareholders
- The equity value shows a steady increase from 15,331 million US dollars in 2020 to 16,484 million in 2021. There is a slight decline in 2022 to 15,869 million, followed by a substantial recovery and growth to 19,494 million in 2023. The equity level remains relatively stable in 2024 at 19,491 million, indicating maintained shareholder equity after a period of volatility.
- Equity turnover ratio
- The equity turnover ratio, which measures the efficiency in using equity to generate sales, increased from 2.55 in 2020 to a peak of 3.57 in 2022. This peak reflects improved utilization of equity to drive sales during that period. Subsequent years show a decline to 3.28 in 2023 and further to 3.15 in 2024, suggesting a slight reduction in equity efficiency despite sustained high sales levels.