.Profitability Analysis
Difficulty: Beginner
Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Caterpillar Inc., profitability ratios
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Return on Sales | ||||||
| | Gross profit margin | % | % | % | % | % |
| | Operating profit margin | % | % | % | % | % |
| | Net profit margin | % | % | % | % | % |
| Return on Investment | ||||||
| | Return on equity (ROE) | % | % | % | % | % |
| | Return on assets (ROA) | % | % | % | % | % |
Source: Based on data from Caterpillar Inc. Annual Reports
| 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 deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Caterpillar Inc.'s operating profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Caterpillar Inc.'s net profit margin deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Caterpillar Inc.'s ROE deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Caterpillar Inc.'s ROA deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
Gross Profit Margin
Caterpillar Inc., gross profit margin calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Gross margin | |||||
| | Sales of Machinery, Energy & Transportation | |||||
| Ratio | ||||||
| | Gross profit margin1 | % | % | % | % | % |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors | ||||||
| Illinois Tool Works Inc. | % | % | % | % | % | |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 Gross profit margin = 100 × Gross margin ÷ Sales of Machinery, Energy & Transportation
= 100 × ÷ = %
| 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 deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Operating Profit Margin
Caterpillar Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Operating profit | |||||
| | Sales of Machinery, Energy & Transportation | |||||
| Ratio | ||||||
| | Operating profit margin1 | % | % | % | % | % |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors | ||||||
| Illinois Tool Works Inc. | % | % | % | % | % | |
| Operating Profit Margin, Sector | ||||||
| Industrial Engineering | % | % | % | % | % | |
| Operating Profit Margin, Industry | ||||||
| Industrials | % | % | % | % | % | |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 Operating profit margin = 100 × Operating profit ÷ Sales of Machinery, Energy & Transportation
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Caterpillar Inc.'s operating profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Net Profit Margin
Caterpillar Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Profit (loss) attributable to common stockholders | |||||
| | Sales of Machinery, Energy & Transportation | |||||
| Ratio | ||||||
| | Net profit margin1 | % | % | % | % | % |
| Benchmarks | ||||||
| Net Profit Margin, Competitors | ||||||
| Illinois Tool Works Inc. | % | % | % | % | % | |
| Net Profit Margin, Sector | ||||||
| Industrial Engineering | % | % | % | % | % | |
| Net Profit Margin, Industry | ||||||
| Industrials | % | % | % | % | % | |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 Net profit margin = 100 × Profit (loss) attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Caterpillar Inc.'s net profit margin deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
Return on Equity (ROE)
Caterpillar Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Profit (loss) attributable to common stockholders | |||||
| | Equity attributable to common stockholders | |||||
| Ratio | ||||||
| | ROE1 | % | % | % | % | % |
| Benchmarks | ||||||
| ROE, Competitors | ||||||
| Illinois Tool Works Inc. | % | % | % | % | % | |
| ROE, Sector | ||||||
| Industrial Engineering | % | % | % | % | % | |
| ROE, Industry | ||||||
| Industrials | % | % | % | % | % | |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 ROE = 100 × Profit (loss) attributable to common stockholders ÷ Equity attributable to common stockholders
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Caterpillar Inc.'s ROE deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
Return on Assets (ROA)
Caterpillar Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Profit (loss) attributable to common stockholders | |||||
| | Total assets | |||||
| Ratio | ||||||
| | ROA1 | % | % | % | % | % |
| Benchmarks | ||||||
| ROA, Competitors | ||||||
| Illinois Tool Works Inc. | % | % | % | % | % | |
| ROA, Sector | ||||||
| Industrial Engineering | % | % | % | % | % | |
| ROA, Industry | ||||||
| Industrials | % | % | % | % | % | |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 ROA = 100 × Profit (loss) attributable to common stockholders ÷ Total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Caterpillar Inc.'s ROA deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
