Caterpillar Inc (CAT)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.99% | 34.69% | 29.47% | 29.43% | 28.93% |
| Operating profit margin | 20.17% | 19.33% | 13.30% | 13.49% | 10.91% |
| Pretax margin | 20.63% | 19.46% | 14.73% | 16.10% | 9.57% |
| Net profit margin | 16.65% | 15.41% | 11.28% | 12.73% | 7.18% |
Based on the provided data, Caterpillar Inc has shown a consistent improvement in its profitability ratios over the years.
1. Gross Profit Margin: The company's gross profit margin has been on an upward trend, increasing from 28.93% in 2020 to 35.99% in 2024. This indicates that Caterpillar has been able to effectively control its cost of goods sold and generate more profit from its sales.
2. Operating Profit Margin: Caterpillar's operating profit margin has also shown steady growth, rising from 10.91% in 2020 to 20.17% in 2024. This suggests that the company has been able to efficiently manage its operating expenses and improve operational efficiency.
3. Pretax Margin: The pretax margin of Caterpillar has increased significantly from 9.57% in 2020 to 20.63% in 2024. This highlights the company's ability to not only generate higher revenues but also effectively manage its pre-tax expenses.
4. Net Profit Margin: Caterpillar's net profit margin has demonstrated a notable improvement, growing from 7.18% in 2020 to 16.65% in 2024. This indicates the company's success in enhancing its bottom-line profitability by controlling non-operating expenses and taxes more effectively.
Overall, Caterpillar Inc's profitability ratios reflect a positive trend, showcasing its enhanced profitability and operational efficiency over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.89% | 14.82% | 9.65% | 8.31% | 5.81% |
| Return on assets (ROA) | 12.30% | 11.81% | 8.18% | 7.84% | 3.83% |
| Return on total capital | 71.23% | 69.56% | 61.47% | 50.20% | 31.54% |
| Return on equity (ROE) | 55.36% | 53.02% | 42.25% | 39.37% | 19.56% |
Caterpillar Inc's profitability ratios have shown a positive trend over the years based on the provided data. The Operating return on assets (Operating ROA) has increased steadily from 5.81% in December 2020 to 14.89% in December 2024, indicating the company's ability to generate operating income relative to its total assets has improved significantly.
Similarly, the Return on assets (ROA) has also shown a consistent improvement, rising from 3.83% in December 2020 to 12.30% in December 2024. This ratio indicates the overall profitability of the company in generating earnings from its assets has strengthened over the years.
The Return on total capital has demonstrated a remarkable ascent, escalating from 31.54% in December 2020 to 71.23% in December 2024, showcasing the company's efficient utilization of both debt and equity capital to generate profits.
Furthermore, the Return on equity (ROE) has exhibited substantial growth, surging from 19.56% in December 2020 to 55.36% in December 2024, indicating the company's ability to generate profits for its shareholders from the equity invested in the business has significantly improved.
Overall, the consistent improvement in these profitability ratios reflects Caterpillar Inc's strong operational performance and effective management of its assets, capital, and equity over the years.