Caterpillar Inc (CAT)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	2.58	2.47	2.42	2.38	2.54	2.36	2.40	2.46	2.53	2.44	2.49	2.46	2.55	2.66	2.82	2.97	3.25	3.08	3.16	3.03
Receivables turnover	3.56	3.55	3.46	3.36	3.33	3.32	3.12	2.90	2.93	2.92	2.64	2.49	2.49	2.74	7.52	6.67	7.03	7.69	7.08	6.99
Payables turnover	5.41	5.54	5.09	4.68	4.76	4.81	4.72	4.43	4.36	4.61	4.57	4.46	4.75	5.86	6.31	6.05	6.15	6.11	5.40	5.20
Working capital turnover	5.49	4.47	5.54	4.47	4.85	4.58	4.15	4.04	3.75	3.04	2.97	2.69	3.04	3.22	3.68	4.60	4.28	4.60	4.63	4.71

Inventory turnover measures how efficiently a company manages its inventory. Caterpillar Inc. has shown a relatively stable inventory turnover ratio over the past eight quarters, ranging from 2.38 to 2.58. This indicates that the company is able to sell and replace its inventory approximately two to three times a year.

Receivables turnover reflects how quickly a company collects its outstanding receivables. Caterpillar Inc. has demonstrated consistent receivables turnover ratios, ranging from 5.77 to 7.29 over the same period. This suggests that the company is efficient in collecting payments from its customers.

Payables turnover evaluates how quickly a company pays its suppliers. Caterpillar Inc. has shown a stable payables turnover ratio, fluctuating between 4.43 and 5.54. A higher ratio indicates that the company is taking longer to pay its suppliers, which may suggest favorable credit terms or strong bargaining power.

Working capital turnover is a measure of how efficiently a company utilizes its working capital to generate sales. Caterpillar Inc. had working capital turnover ratios of 4.47 and 4.58 in the first and third quarters of 2022, respectively. This indicates that the company effectively leveraged its working capital to generate revenues during those periods.

Overall, Caterpillar Inc. appears to have relatively healthy activity ratios, indicating efficient management of inventory, receivables, payables, and working capital turnover over the past eight quarters.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	141.38	147.97	150.69	153.63	143.62	154.86	151.93	148.11	144.28	149.82	146.39	148.67	143.10	137.44	129.44	122.89	112.26	118.55	115.47	120.32
Days of sales outstanding (DSO)	days	102.44	102.74	105.40	108.55	109.75	110.06	116.97	125.69	124.42	124.91	138.10	146.75	146.71	133.23	48.56	54.75	51.89	47.49	51.53	52.23
Number of days of payables	days	67.47	65.88	71.69	77.99	76.70	75.87	77.41	82.35	83.81	79.13	79.95	81.91	76.91	62.32	57.86	60.35	59.36	59.77	67.53	70.18

Days of Inventory on Hand (DOH):
- The trend in the Days of Inventory on Hand (DOH) for Caterpillar Inc. has been fluctuating over the past eight quarters, ranging from 141.38 days to 153.63 days.
- The company appears to have a relatively high average DOH, reflecting a longer period of time it takes them to sell their inventory.
- The decreasing trend from Q3 2022 to Q4 2022 was followed by an increase until Q3 2023 before showing a slight decrease in Q4 2023. This suggests some level of inventory management improvement but still room for optimization.

Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding (DSO) for Caterpillar Inc. have also varied over the past eight quarters, with values ranging from 50.07 days to 63.30 days.
- The company has managed to maintain relatively stable DSO levels, indicating a consistent collections process for accounts receivable.
- The decrease in DSO from Q2 2022 to Q3 2022 was followed by an increase until Q1 2023 and then a declining trend from Q2 2023 to Q4 2023, suggesting potential improvements in managing accounts receivable.

Number of Days of Payables:
- Caterpillar Inc.'s Number of Days of Payables has shown fluctuations over the observed quarters, with values ranging from 65.88 days to 82.35 days.
- The company appears to have a relatively stable average payment period to its suppliers, with variations in terms of days payable outstanding.
- The decreasing trend in days of payables from Q2 2022 to Q4 2022 was followed by an increasing trend until Q1 2023 and a mixed pattern from Q2 2023 to Q4 2023, indicating a potential need for better management of payment cycles.

Overall, Caterpillar Inc. should focus on optimizing its inventory management practices to reduce DOH, maintaining stable collections processes to manage DSO effectively, and reviewing its payment cycles to ensure efficient working capital management.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	5.29	5.42	5.34	5.15	4.94	4.86	4.60	4.41	4.22	4.07	3.82	3.54	3.37	3.57	3.77	4.08	4.17	4.28	4.23	4.17
Total asset turnover	0.77	0.77	0.76	0.74	0.73	0.70	0.67	0.64	0.62	0.60	0.56	0.53	0.53	0.57	0.61	0.67	0.69	0.71	0.70	0.70

Caterpillar Inc.'s long-term activity ratios indicate the efficiency of the company in generating sales relative to its investment in assets. The fixed asset turnover ratio has shown a consistent upward trend over the past eight quarters, reaching 5.29 in Q4 2023 from 4.41 in Q1 2022. This suggests that Caterpillar has been increasingly efficient in utilizing its fixed assets to generate revenue.

Furthermore, the total asset turnover ratio has also displayed improvement over the same period, increasing from 0.64 in Q1 2022 to 0.77 in Q4 2023. This indicates that Caterpillar has been more effective in generating sales considering its total asset base.

Overall, the upward trends in both fixed asset turnover and total asset turnover ratios demonstrate Caterpillar's enhanced efficiency in utilizing its assets to generate revenue over the long term. These improvements may signify better operational performance, effective asset management, and potentially increased profitability for the company.