Caterpillar Inc (CAT)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 12,966,000 | 7,904,000 | 6,878,000 | 4,553,000 | 8,290,000 |
| Total assets | US$ in thousands | 87,476,000 | 81,943,000 | 82,793,000 | 78,324,000 | 78,453,000 |
| Operating ROA | 14.82% | 9.65% | 8.31% | 5.81% | 10.57% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $12,966,000K ÷ $87,476,000K
= 14.82%
Caterpillar Inc.'s operating return on assets (ROA) has shown an upward trend over the past five years, indicating improved operational efficiency and profitability. The operating ROA increased from 10.57% in 2019 to 14.82% in 2023, reflecting a consistent growth in the company's ability to generate operating profit from its assets.
The significant improvement in operating ROA from 2019 to 2023 suggests that Caterpillar has been effectively managing its assets to generate higher operating income. This could be attributed to better cost management, increased productivity, or strategic investments in profitable projects.
The company's ability to generate a higher return on assets indicates that management is utilizing the company's resources efficiently to drive profitability. Investors and stakeholders may view the increasing trend in operating ROA positively as it signifies the company's ability to generate profits relative to its asset base.
Overall, the rising trend in Caterpillar Inc.'s operating ROA highlights its strong operational performance and efficiency in generating profits from its assets over the past five years.
Peer comparison
Dec 31, 2023