Analysis of Profitability Ratios
Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Caterpillar Inc., profitability 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).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Caterpillar Inc.’s gross profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Caterpillar Inc.’s operating profit margin ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Caterpillar Inc.’s net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Caterpillar Inc.’s ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Caterpillar Inc.’s ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
Gross Profit Margin
Caterpillar Inc., gross profit margin 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) | ||||||
| Gross margin | 14,125 | 14,825 | 11,627 | 7,464 | 10,405 | |
| Sales of Machinery, Energy & Transportation | 50,755 | 51,822 | 42,676 | 35,773 | 44,147 | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 27.83% | 28.61% | 27.24% | 20.86% | 23.57% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Illinois Tool Works Inc. | 41.97% | 41.74% | 41.95% | 41.94% | 41.16% | |
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
Gross profit margin = 100 × Gross margin ÷ Sales of Machinery, Energy & Transportation
= 100 × 14,125 ÷ 50,755 = 27.83%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Caterpillar Inc.’s gross profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
Operating Profit Margin
Caterpillar Inc., operating profit margin 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) | ||||||
| Operating profit | 8,290 | 8,293 | 4,406 | 498 | 3,256 | |
| Sales of Machinery, Energy & Transportation | 50,755 | 51,822 | 42,676 | 35,773 | 44,147 | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 16.33% | 16.00% | 10.32% | 1.39% | 7.38% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Illinois Tool Works Inc. | 24.11% | 24.27% | 24.41% | 22.53% | 21.39% | |
| Operating Profit Margin, Sector | ||||||
| Industrial Engineering | 18.03% | 17.84% | 13.86% | 7.21% | 10.64% | |
| Operating Profit Margin, Industry | ||||||
| Industrials | 13.24% | 14.13% | 13.94% | 12.94% | 13.66% | |
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
Operating profit margin = 100 × Operating profit ÷ Sales of Machinery, Energy & Transportation
= 100 × 8,290 ÷ 50,755 = 16.33%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Caterpillar Inc.’s operating profit margin ratio improved from 2017 to 2018 and from 2018 to 2019. |
Net Profit Margin
Caterpillar Inc., net profit margin 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 | |
| Sales of Machinery, Energy & Transportation | 50,755 | 51,822 | 42,676 | 35,773 | 44,147 | |
| Profitability Ratio | ||||||
| Net profit margin1 | 12.00% | 11.86% | 1.77% | -0.19% | 4.76% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Illinois Tool Works Inc. | 17.87% | 17.36% | 11.79% | 14.96% | 14.17% | |
| Net Profit Margin, Sector | ||||||
| Industrial Engineering | 13.28% | 13.08% | 4.28% | 3.99% | 6.95% | |
| Net Profit Margin, Industry | ||||||
| Industrials | 7.42% | 6.86% | 8.15% | 8.73% | 7.01% | |
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
Net profit margin = 100 × Profit (loss) attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 6,093 ÷ 50,755 = 12.00%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Caterpillar Inc.’s net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019. |
Return on Equity (ROE)
Caterpillar Inc., ROE 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 | |
| Equity attributable to common stockholders | 14,588 | 14,039 | 13,697 | 13,137 | 14,809 | |
| Profitability Ratio | ||||||
| ROE1 | 41.77% | 43.79% | 5.50% | -0.51% | 14.19% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Illinois Tool Works Inc. | 83.31% | 78.76% | 36.79% | 47.84% | 36.35% | |
| ROE, Sector | ||||||
| Industrial Engineering | 48.90% | 50.37% | 13.35% | 11.32% | 19.97% | |
| ROE, Industry | ||||||
| Industrials | 25.37% | 24.18% | 24.04% | 25.10% | 17.58% | |
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
ROE = 100 × Profit (loss) attributable to common stockholders ÷ Equity attributable to common stockholders
= 100 × 6,093 ÷ 14,588 = 41.77%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Caterpillar Inc.’s ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
Return on Assets (ROA)
Caterpillar Inc., ROA 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 | |
| Total assets | 78,453 | 78,509 | 76,962 | 74,704 | 78,497 | |
| Profitability Ratio | ||||||
| ROA1 | 7.77% | 7.83% | 0.98% | -0.09% | 2.68% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Illinois Tool Works Inc. | 16.73% | 17.24% | 10.05% | 13.39% | 12.07% | |
| ROA, Sector | ||||||
| Industrial Engineering | 9.21% | 9.33% | 2.60% | 2.19% | 4.25% | |
| ROA, Industry | ||||||
| Industrials | 4.70% | 4.60% | 5.10% | 5.46% | 4.00% | |
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
ROA = 100 × Profit (loss) attributable to common stockholders ÷ Total assets
= 100 × 6,093 ÷ 78,453 = 7.77%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Caterpillar Inc.’s ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |