Caterpillar Inc (CAT)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 10,792,000 | 10,335,000 | 6,705,000 | 6,489,000 | 2,998,000 |
| Total stockholders’ equity | US$ in thousands | 19,494,000 | 19,494,000 | 15,869,000 | 16,484,000 | 15,331,000 |
| ROE | 55.36% | 53.02% | 42.25% | 39.37% | 19.56% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $10,792,000K ÷ $19,494,000K
= 55.36%
Caterpillar Inc's return on equity (ROE) has shown a positive trend over the years, increasing from 19.56% in December 31, 2020, to 55.36% in December 31, 2024. This indicates that the company has been effectively utilizing its equity to generate profits for its shareholders.
The significant increase in ROE over the period reflects Caterpillar's ability to efficiently generate higher profits relative to the equity invested by shareholders. This improvement suggests that the company has been successful in managing its assets and liabilities to create value for its investors.
The consistent growth in ROE indicates that Caterpillar has been able to maintain and enhance its profitability and efficiency over time. Investors and stakeholders may view this positive trend favorably as it signifies the company's strong performance and its ability to deliver returns on shareholders' equity. Overall, Caterpillar Inc's increasing ROE demonstrates its effectiveness in generating profits from the resources provided by its shareholders.
Peer comparison
Dec 31, 2024