Caterpillar Inc (CAT)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 12,966,000 | 7,904,000 | 6,878,000 | 4,553,000 | 8,290,000 |
| Long-term debt | US$ in thousands | 24,472,000 | 25,714,000 | 26,033,000 | 25,999,000 | 26,281,000 |
| Total stockholders’ equity | US$ in thousands | 19,503,000 | 15,891,000 | 16,516,000 | 15,378,000 | 14,629,000 |
| Return on total capital | 29.48% | 19.00% | 16.16% | 11.00% | 20.26% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $12,966,000K ÷ ($24,472,000K + $19,503,000K)
= 29.48%
Caterpillar Inc.'s return on total capital has shown a positive trend over the past five years, increasing from 15.93% in 2019 to 22.71% in 2023. This indicates that the company has been effectively generating returns from its total capital employed in its operations. The steady improvement in return on total capital signifies the company's efficient utilization of its capital resources to generate profits. Additionally, the consistent growth in this ratio reflects positively on Caterpillar's ability to generate higher returns for its stakeholders and investors. Overall, the increasing trend in return on total capital suggests that Caterpillar Inc. has been successful in optimizing its capital structure and operational efficiency.
Peer comparison
Dec 31, 2023