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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Caterpillar's Sloan Ratio for the quarter that ended in Mar. 2026 was 3.60%.
As of Mar. 2026, Caterpillar has a Sloan Ratio of 3.60%, indicating the company is in the safe zone and there is no funny business with accruals.
Caterpillar (XSWX:CAT) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Caterpillar has a Sloan Ratio of 3.60%, indicating the company is in the safe zone and there is no funny business with accruals.
Caterpillar Sloan Ratio % Related Terms
Caterpillar Sloan Ratio % Historical Data
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The historical data trend for Caterpillar's Sloan Ratio % 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.
XSWX:CAT vs DE, PCAR, CNH: Sloan Ratio % Comparison
For the Farm & Heavy Construction Machinery subindustry, Caterpillar's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % 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 Sloan Ratio % vs Farm & Heavy Construction Machinery Industry
For the Farm & Heavy Construction Machinery industry and Industrials sector, Caterpillar's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Caterpillar's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Caterpillar's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Caterpillar's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 1771.963 (Jun. 2025 ) + 1831.03 (Sep. 2025 ) + 1914.154 (Dec. 2025 ) + 2006.828 (Mar. 2026 ) = CHF7,524 Mil.
Caterpillar's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 2538.81 (Jun. 2025 ) + 2975.026 (Sep. 2025 ) + 2861.668 (Dec. 2025 ) + 1472.251 (Mar. 2026 ) = CHF9,848 Mil.
Caterpillar's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -1083.182 (Jun. 2025 ) + -1050.852 (Sep. 2025 ) + -1498.172 (Dec. 2025 ) + -1397.458 (Mar. 2026 ) = CHF-5,030 Mil.
* 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 (XSWX:CAT) has a Sloan Ratio % of 3.60% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Caterpillar and its competitors.
Is Caterpillar's Sloan Ratio % too high?
Caterpillar's current Sloan Ratio % is 3.60%. Overall, Caterpillar has a GF Score™ of 81/100, reflecting its overall financial health beyond just this single metric.
How does Caterpillar's Sloan Ratio % compare to DE and PCAR?
Caterpillar's Sloan Ratio % of 3.60% can be compared against companies in the Farm & Heavy Construction Machinery industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Farm & Heavy Construction Machinery company?
A good Sloan Ratio % depends on the Farm & Heavy Construction Machinery industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Caterpillar and its competitors. Caterpillar's current Sloan Ratio % is 3.60%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Caterpillar stock overvalued right now?
Caterpillar (XSWX:CAT) has a current Sloan Ratio % of 3.60%. The stock's GF Value™ is CHF342.85, compared to a current price of CHF760.20 — trading 121.7% above its estimated fair value. The current Sloan Ratio % is 3.60%. Caterpillar's overall GF Score™ is 81/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Caterpillar (XSWX:CAT), the current Sloan Ratio % is 3.60% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Caterpillar (XSWX:CAT) Overvalued in 2026?
Based on GuruFocus' analysis, Caterpillar stock appears to be overvalued.
The current stock price of CHF760.20 is trading 121.7% above its estimated GF Value™ of CHF342.85.
Key valuation signals for XSWX:CAT:
Sloan Ratio %: 3.60%
GF Value™: CHF342.85 vs. price of CHF760.20 (121.7% above fair value)
No single metric tells the full story. See the XSWX:CAT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
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. Its reporting segments are construction, resource, energy, and transportation. Market share approaches 20% across many products. Caterpillar operates a captive finance subsidiary to facilitate sales. The firm has a global reach that is approximately evenly balanced between the US and the rest of the world. Construction skews more domestic, while the other divisions are more geographically diversified. An independent network of over 150 dealers operates approximately 2,800 facilities, giving Caterpillar reach into about 190 countries for sales and support services.
81GF Score
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