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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Caterpillar's annualized ROCE % for the quarter that ended in Sep. 2024 was 24.83%.
The historical data trend for Caterpillar's ROCE % 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.
Caterpillar Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROCE % | Get a 7-Day Free Trial | 16.12 | 8.63 | 16.47 | 17.79 | 26.29 |
Caterpillar Quarterly Data | ||||||||||||||||||||
Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | |
ROCE % | Get a 7-Day Free Trial | 28.09 | 25.37 | 28.24 | 28.77 | 24.83 |
Caterpillar's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:
ROCE % | = | EBIT | / | ( (Capital Employed | + | Capital Employed) | / count ) |
(A: Dec. 2023 ) | (A: Dec. 2022 ) | (A: Dec. 2023 ) | |||||
= | EBIT | / | ( ( (Total Assets - Total Current Liabilities) | + | (Total Assets - Total Current Liabilities) ) | / count ) | |
(A: Dec. 2023 ) | (A: Dec. 2022 ) | (A: Dec. 2023 ) | |||||
= | 13561 | / | ( ( (81943 - 31531) | + | (87476 - 34728) ) | / 2 ) | |
= | 13561 | / | ( (50412 | + | 52748) | / 2 ) | |
= | 13561 | / | 51580 | ||||
= | 26.29 % |
Caterpillar's ROCE % of for the quarter that ended in Sep. 2024 is calculated as:
ROCE % | = | EBIT (1) | / | ( (Capital Employed | + | Capital Employed) | / count ) |
(Q: Sep. 2024 ) | (Q: Jun. 2024 ) | (Q: Sep. 2024 ) | |||||
= | EBIT | / | ( ( (Total Assets - Total Current Liabilities) | + | (Total Assets - Total Current Liabilities) ) | / count ) | |
(Q: Sep. 2024 ) | (Q: Jun. 2024 ) | (Q: Sep. 2024 ) | |||||
= | 12892 | / | ( ( (83336 - 33564) | + | (86273 - 32218) ) | / 2 ) | |
= | 12892 | / | ( ( 49772 | + | 54055 ) | / 2 ) | |
= | 12892 | / | 51913.5 | ||||
= | 24.83 % |
(1) Note: The EBIT data used here is four times the quarterly (Sep. 2024) EBIT 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.
Caterpillar (NYSE:CAT) ROCE % Explanation
ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.
Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.
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