Caterpillar Inc (CAT)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 87,476,000 | 86,791,000 | 85,427,000 | 83,649,000 | 81,943,000 | 80,907,000 | 81,107,000 | 82,276,000 | 82,793,000 | 80,784,000 | 81,697,000 | 80,729,000 | 78,324,000 | 76,741,000 | 76,566,000 | 75,894,000 | 78,453,000 | 77,993,000 | 79,187,000 | 78,726,000 |
| Total stockholders’ equity | US$ in thousands | 19,503,000 | 20,507,000 | 18,256,000 | 18,170,000 | 15,891,000 | 15,622,000 | 15,759,000 | 17,097,000 | 16,516,000 | 16,695,000 | 16,880,000 | 16,617,000 | 15,378,000 | 14,994,000 | 13,777,000 | 14,239,000 | 14,629,000 | 14,993,000 | 14,878,000 | 15,478,000 |
| Financial leverage ratio | 4.49 | 4.23 | 4.68 | 4.60 | 5.16 | 5.18 | 5.15 | 4.81 | 5.01 | 4.84 | 4.84 | 4.86 | 5.09 | 5.12 | 5.56 | 5.33 | 5.36 | 5.20 | 5.32 | 5.09 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $87,476,000K ÷ $19,503,000K
= 4.49
The financial leverage ratio for Caterpillar Inc. has been fluctuating over the past eight quarters. The ratio indicates the extent to which the company relies on debt financing versus equity financing in its capital structure. A higher ratio suggests higher financial risk due to increased reliance on debt.
Caterpillar's financial leverage ratio decreased from 5.16 in Q4 2022 to 4.49 in Q4 2023, which implies a reduction in the company's reliance on debt compared to the previous quarter. This may indicate a healthier financial position as the company potentially used more equity financing or reduced its debt levels during this period.
The financial leverage ratio then fluctuated further, reaching a low of 4.24 in Q3 2023 and a high of 4.68 in Q2 2023 before settling at 4.61 in Q1 2023. These fluctuations suggest that Caterpillar's capital structure has been variable, potentially due to changes in debt levels, equity issuance, or overall financial management strategies.
Comparing the most recent financial leverage ratio of 4.49 in Q4 2023 to historical data, it appears that Caterpillar has managed to decrease its reliance on debt since Q4 2022. However, it is essential to monitor future trends in the financial leverage ratio to assess the company's ongoing capital structure management and its implications for financial risk and stability.
Peer comparison
Dec 31, 2023