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Caterpillar ROA %

: 8.19% (As of Jun. 2022)
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ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Caterpillar's annualized Net Income for the quarter that ended in Jun. 2022 was $6,692 Mil. Caterpillar's average Total Assets over the quarter that ended in Jun. 2022 was $81,692 Mil. Therefore, Caterpillar's annualized ROA % for the quarter that ended in Jun. 2022 was 8.19%.

The historical rank and industry rank for Caterpillar's ROA % or its related term are showing as below:

CAT' s ROA % Range Over the Past 10 Years
Min: -0.09   Med: 4.09   Max: 8.06
Current: 8.27

During the past 13 years, Caterpillar's highest ROA % was 8.06%. The lowest was -0.09%. And the median was 4.09%.

CAT's ROA % is ranked better than
83.67% of 196 companies
in the Farm & Heavy Construction Machinery industry
Industry Median: 2.98 vs CAT: 8.27

Caterpillar ROA % Historical Data

The historical data trend for Caterpillar's ROA % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Caterpillar Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROA %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.99 7.91 7.76 3.82 8.06

Caterpillar Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROA % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.96 7.02 10.37 7.45 8.19

Competitive Comparison

For the Farm & Heavy Construction Machinery subindustry, Caterpillar's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Caterpillar ROA % Distribution

For the Farm & Heavy Construction Machinery industry and Industrials sector, Caterpillar's ROA % distribution charts can be found below:

* The bar in red indicates where Caterpillar's ROA % falls into.



Caterpillar ROA % Calculation

Caterpillar's annualized ROA % for the fiscal year that ended in Dec. 2021 is calculated as:

ROA %=Net Income (A: Dec. 2021 )/( (Total Assets (A: Dec. 2020 )+Total Assets (A: Dec. 2021 ))/ count )
=6489/( (78324+82793)/ 2 )
=6489/80558.5
=8.06 %

Caterpillar's annualized ROA % for the quarter that ended in Jun. 2022 is calculated as:

ROA %=Net Income (Q: Jun. 2022 )/( (Total Assets (Q: Mar. 2022 )+Total Assets (Q: Jun. 2022 ))/ count )
=6692/( (82276+81107)/ 2 )
=6692/81691.5
=8.19 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Jun. 2022) net income data. ROA % is displayed in the 30-year financial page.


Caterpillar  (NYSE:CAT) ROA % Explanation

ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A bank’s ROA % is typically well under 2%.

Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:

ROA %(Q: Jun. 2022 )
=Net Income/Total Assets
=6692/81691.5
=(Net Income / Revenue)*(Revenue / Total Assets)
=(6692 / 56988)*(56988 / 81691.5)
=Net Margin %*Asset Turnover
=11.74 %*0.6976
=8.19 %

Note: The Net Income data used here is four times the quarterly (Jun. 2022) net income data. The Revenue data used here is four times the quarterly (Jun. 2022) revenue data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.

E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.


Caterpillar ROA % Related Terms

Thank you for viewing the detailed overview of Caterpillar's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.


Caterpillar Business Description

Caterpillar logo
Address
510 Lake Cook Road, Suite 100, Deerfield, IL, USA, 60015
Caterpillar is an iconic manufacturer of heavy equipment, power solutions, and locomotives. It is currently the world's largest manufacturer of heavy equipment with over 13% market share in 2021. The company is divided into four reportable segments: construction industries, resource industries, energy and transportation, and Caterpillar Financial Services. Its products are available through a dealer network that covers the globe with over 2,000 branches maintained by 168 dealers. Caterpillar Financial Services provides retail financing for machinery and engines to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Caterpillar product sales.
Executives
Schaupp William E officer: Chief Accounting Officer PPG INDUSTRIES, INC. ONE PPG PLACE PITTSBURGH PA 15272
Maclennan David director 14701 CHARLSON ROAD EDEN PRAIRIE MN 55347
Johnson Gerald director 300 RENAISSANCE CENTER M/C: 482-C23-A68 DETROIT MI 48265
Fassino Anthony D. officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Marvel Gary Michael officer: Chief Accounting Officer 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Ainsworth William P officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD X1 60015
Bonfield Andrew R J officer: Chief Financial Officer C/O BRISTOL MYERS SQUIBB CO 345 PARK AVE NEW YORK NY 10164
Younessi Ramin officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Creed Joseph E officer: Interim CFO 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Ayotte Kelly director C/O NEWS CORPORATION 1211 AVENUE OF THE AMERICAS NEW YORK NY 10036
Johnson Cheryl H officer: Chief Human Resources Officer 40 WESTMINSTER STREET PROVIDENCE RI 02903
Wilkins Rayford Jr director 208 S. AKARD ST. -- DALLAS TX 75202
Long Suzette M officer: Int. Executive Vice President 510 LAKE COOK ROAD SUITE 100 DEERFILED IL 60015
De Lange Bob officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Johnson Denise C officer: Group President C/O CATERPILLAR, INCORPORATED 901 WEST WASHINGTON, CV41110 EAST PEORIA IL 61630

Caterpillar Headlines

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