Caterpillar Inc (CAT)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.23% | 30.42% | 30.33% | 23.81% | 26.25% |
| Operating profit margin | 19.33% | 13.30% | 13.49% | 10.91% | 15.41% |
| Pretax margin | 19.56% | 14.76% | 16.15% | 9.59% | 14.57% |
| Net profit margin | 15.41% | 11.28% | 12.73% | 7.18% | 11.33% |
Caterpillar Inc.'s profitability ratios have shown fluctuations over the past five years, indicating varying levels of efficiency in generating profits.
The gross profit margin has improved steadily from 30.33% in 2021 to 36.23% in 2023, highlighting the company's ability to control production costs and markups on its products.
The operating profit margin has also seen a notable upward trend, reaching 19.33% in 2023 from 13.49% in 2021. This suggests that Caterpillar has been more effective in managing its operating expenses and increasing operational efficiency.
The pretax margin shows a similar positive trajectory, increasing from 9.60% in 2020 to 19.55% in 2023. This indicates that the company has been successful in optimizing its revenue streams and minimizing tax liabilities.
The net profit margin, which reflects the company's bottom-line profitability, has shown significant improvement, rising from 7.18% in 2020 to 15.41% in 2023. This indicates that Caterpillar has been successful in enhancing its profitability after accounting for all expenses and taxes.
Overall, Caterpillar Inc.'s profitability ratios have demonstrated a positive trend, showcasing improvements in operational efficiency, cost management, and overall profitability over the past five years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.82% | 9.65% | 8.31% | 5.81% | 10.57% |
| Return on assets (ROA) | 11.81% | 8.18% | 7.84% | 3.83% | 7.77% |
| Return on total capital | 29.48% | 19.00% | 16.16% | 11.00% | 20.26% |
| Return on equity (ROE) | 52.99% | 42.19% | 39.29% | 19.50% | 41.65% |
Caterpillar Inc. has shown consistent improvement in its profitability ratios over the years, reflecting strong operational performance and effective capital utilization.
The Operating return on assets (Operating ROA) has been steadily increasing from 5.81% in 2020 to 14.82% in 2023. This indicates that the company is generating more operating income per dollar of assets, showing efficiency in managing its operations.
Return on assets (ROA) has also shown an upward trend, increasing from 3.83% in 2020 to 11.81% in 2023. This ratio measures the overall profitability of the company relative to its total assets, indicating effective asset utilization and management.
Return on total capital has consistently improved from 8.70% in 2020 to 22.71% in 2023. This ratio reflects how efficiently the company is generating profits from both debt and equity capital invested, indicating strong financial performance.
Return on equity (ROE) has experienced significant growth, from 19.56% in 2020 to 53.02% in 2023. This demonstrates that Caterpillar Inc. is generating substantial returns for its shareholders relative to the equity they have invested, showing effective utilization of shareholder funds.
Overall, the increasing trend in these profitability ratios suggests that Caterpillar Inc. has been successful in enhancing its operational efficiency, asset utilization, and capital management, ultimately driving improved returns for its investors.