Introduction
With 2023 sales and revenues of $67.060 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and also provides financing and related services through its Financial Products segment. Caterpillar is also a leading U.S. exporter. Through a global network of independent dealers and direct sales of certain products, Caterpillar builds long-term relationships with customers around the world.
Asset Structure Analysis
Caterpillar’s total assets were $87.48 billion as of December 31,2023, up from $82 billion as of December 31, 2022.
Property, plant and equipment, net were $12.68 billion as of December 31, 2023, accounting for 14.5% of total assets.
Long-term receivable, finance was $12.66 billion as of December 31, 2023, making up 14.5% of total assets.
Goodwill was $5.3 billion as of December 31, 2023, representing 6% of total assets.
Other assets were $5.26 billion as of December 31, 2023, comprising 6% of total assets.
Total current assets were $47 billion as of December 31, 2023, accounting for 53.7% of total assets.
Of total current assets, cash and cash equivalents were $7 billion, trade receivables were $9.3 billion, finance receivables were $9.5 billion, prepaid expenses were $4.6 billion and inventories were $16.6 billion.
Liquidity and Solvency
Total current liabilities were $34.7 billion as of December 31, 2023 with the current ratio of 1.35.
Total liabilities were $68 billion as of December 31, 2023 with the debt ratio of 77.7% .
Profitability Analysis
Caterpillar has four reportable segments: construction industries($27.4 billion), resource industries($13.6 billion), energy & transportation($28 billion), and financial products segment($3.79 billion) as of December 31, 2023.
Sales and revenues were $67 billion, $59.4 billion and $50.9 billion in 2023, 2022 and 2021, respectively.
Cost of goods sold was $42.8 billion, $41.4 billion and $35.5 billion in 2023, 2022 and 2021, respectively.
The gross profit margin was 36.1%, 30.3% and 30.3% in 2023, 2022 and 2021, respectively.
The profit was $10.3 billion, $6.7 billion and $6.5 billion in 2023, 2022 and 2021, respectively.
Cash Flow Analysis
Net cash provided by operating activities was $12.9 billion, $7.8 billion and $7.2 billion in 2023, 2022 and 2021, respectively.
Capital expenditures were $1.6 billion, $1.3 billion and $1.1 billion in 2023, 2022 and 2021, respectively.
Expenditures for equipment leased to others were $1.5 billion, $1.3 billion and $1.38 billion in 2023, 2022 and 2021, respectively.
Cash flow after capital expenditures and expenditures for equipment leased to others was $9.8 billion, $5.2 billion and $4.72 billion in 2023, 2022 and 2021, respectively.
Dividends paid were $2.56 billion, $2.44 billion and $2.33 billion in 2023, 2022 and 2021, respectively.
Common shares repurchased were $4.98 billion, $4.23 billion and $2.67 billion in 2023, 2022 and 2021, respectively.
Caterpillar’s operating performance for the six months ended to June 30, 2024
There is a decrease in sales and revenues.
Sales and revenues were $32.5 billion and $33.2 billion in the six months ended to June 30, 2024 and the six months ended to June 30, 2023.
The profit was $5.5 billion and $4.87 billion in the six months ended to June 30, 2024 and the six months ended to June 30, 2023.
Conclusion
Caterpillar is a good company, but its sales and earnings are unstable due to fluctuating demand.
As the sales and revenues has reached a peak, Caterpillar stock price is $343.48 per share, which is equivalent to $166.55 billion of market capitalization.
We think that Caterpillar stock price is overvalued.
Disclaimer: The content is for reference only and does not constitute investment advice.
