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Caterpillar Interest Coverage

: 18.00 (As of Jun. 2022)
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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Caterpillar's Operating Income for the three months ended in Jun. 2022 was $1,944 Mil. Caterpillar's Interest Expense for the three months ended in Jun. 2022 was $-108 Mil. Caterpillar's interest coverage for the quarter that ended in Jun. 2022 was 18.00. The higher the ratio, the stronger the company's financial strength is.

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

CAT' s Interest Coverage Range Over the Past 10 Years
Min: 3.48   Med: 10.48   Max: 20.53
Current: 15.97


CAT's Interest Coverage is ranked better than
68.28% of 145 companies
in the Farm & Heavy Construction Machinery industry
Industry Median: 9.66 vs CAT: 15.97

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.


Caterpillar Interest Coverage Historical Data

The historical data trend for Caterpillar's Interest Coverage 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
Interest Coverage
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.40 20.53 19.69 8.86 14.09

Caterpillar Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Interest Coverage 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 14.91 14.60 14.38 17.02 18.00

Competitive Comparison

For the Farm & Heavy Construction Machinery subindustry, Caterpillar's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage Distribution

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

* The bar in red indicates where Caterpillar's Interest Coverage falls into.



Caterpillar Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage=-1* Operating Income /Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt.


Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Caterpillar's Interest Coverage for the fiscal year that ended in Dec. 2021 is calculated as

Here, for the fiscal year that ended in Dec. 2021, Caterpillar's Interest Expense was $-488 Mil. Its Operating Income was $6,878 Mil. And its Long-Term Debt & Capital Lease Obligation was $26,033 Mil.

Interest Coverage=-1* Operating Income (A: Dec. 2021 )/Interest Expense (A: Dec. 2021 )
=-1*6878/-488
=14.09

Caterpillar's Interest Coverage for the quarter that ended in Jun. 2022 is calculated as

Here, for the three months ended in Jun. 2022, Caterpillar's Interest Expense was $-108 Mil. Its Operating Income was $1,944 Mil. And its Long-Term Debt & Capital Lease Obligation was $26,219 Mil.

Interest Coverage=-1* Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*1944/-108
=18.00

* 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.

The higher the ratio, the stronger the company's Financial Strength is.


Caterpillar  (NYSE:CAT) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .


Caterpillar Interest Coverage Related Terms

Thank you for viewing the detailed overview of Caterpillar's Interest Coverage 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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