Caterpillar

Group Members

 Hafiz Usman Rasheed (FA16-BEE-014)

 Hassam Abdul Malik (FA16-BEE-18)
 Muhammad Ali (FA16-BEE-027)
 Muhammad Inam Azam (FA16-BEE-034)
Contents

 Introduction
 Vision
 Mission
 Ratio Analysis
 Financial Statements
 Queries
 Introduction
 Caterpillar Inc. (Caterpillar), incorporated on March 12, 1986.
 Manufacturer of construction and mining equipment, diesel and natural
gas engines, industrial gas turbines and diesel-electric locomotives.
 The Company's products are sold primarily under the brands Caterpillar,
CAT, design versions of CAT and Caterpillar, EMD, FG Wilson, MaK, MWM,
Perkins, Progress Rail, SEM and Solar Turbines
 The Construction Industries segment is engaged in supporting customers
using machinery in infrastructure, forestry and building construction.
 The Resource Industries segment is engaged in supporting customers using
machinery in mining, quarry, waste and material handling applications. g
machinery in infrastructure, forestry and building construction.
 The Company provides financing and related services through its Financial
Products segment. The Financial Products Segment conducts its business
through Caterpillar Financial Services
Vision

 The definition for a Vision Statement is a sentence or short paragraph

providing a broad, aspirational image of the future.
Caterpillar Vision Statement:
"Be the global leader in customer value."
Mission

 A Mission Statement can be defined as a sentence or short paragraph

written by a company or business which reflects its core purpose, identity,
values and principle business aims.
Caterpillar Mission Statement:
"Caterpillar will be the leader in providing the best value in machines, engines
and support services for customers dedicated to building the world's
infrastructure and developing and transporting its resources. We provide the
best value to customers.”

“Caterpillar is dedicated to improving the quality of life while sustaining the

quality of our earth. We encourage social responsibility."
SWOT Analysis
 Ratios Analysis
 1-Liquidity Ratios
The ratio between the liquid assets and the liabilities of a bank or other institution. the ratio between
the liquid assets and the liabilities of a bank or other institution.
 Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or
those due within one year.

Current ratio = Total Current Assets

Total current liabilities

= 41003 = 0.9528
43030
If Current Assets > Current Liabilities, then Ratio is greater than 1.0 -> a desirable situation to be in.
If Current Assets = Current Liabilities, then Ratio is equal to 1.0 -> Current Assets are just enough to
paydown the short term obligations.
If Current Assets < Current Liabilities, then Ratio is less than 1.0 -> a problem situation at hands as the
company does not have enough to pay for its short term obligations
Quick Ratio:
The quick ratio is an indicator of a company’s short-term
liquidity position and measures a company’s ability to meet its
short-term obligations with its most liquid assets.

Quick ratio = Total Current Assets - Inventory

Total current liabilities

= 41003-9125 = 0.740
43030
2-Activity Ratios
Activity ratios are a category of financial ratios that
measure a firm's ability to convert different accounts within its
balance sheets into cash or sales.

Inventory Turnover :
Inventory turnover measures a company's efficiency in
managing its stock of goods.
Inventory Turnover = Cost of Goods Sold
Inventory
= 29956 = 3.282
9125
Average Age of Inventory:
It is simply 365, the number of days in a given year, divided by
the inventory turnover.
Average Age of Inventory = 365
Inventory Turnover
= 365 = 111.212
3.282
Average Collection Period:
The average collection period is calculated by dividing the average balance of
accounts receivable by total net credit sales for the period and multiplying the quotient by
the number of days in the period.
ACP = Accounts Receivable
Net Sales/365

= 11167 = 44.57
91439/365
Total Asset Turnover:
The asset turnover ratio measures the efficiency of a
company's assets to generate revenue or sales. It compares the dollar
amount of sales or revenues to its total assets.
Total Asset Turnover = Net Sales
Total Assets
= 91439 = 0.667
137015
3- Financial Leverage Ratios
Financial leverage ratios measure the overall debt load of a company and
compare it with the assets or equity.
Debt Ratio:
The debt ratio is a financial ratio that measures the extent of a company's
leverage. The debt ratio is defined as the ratio of total debt to total assets, expressed
as a decimal or percentage.
Debt Ratio = Total Liabilities/Total Assets
= 78612 = 0.5737
137015
Times Interest Earned:
Times interest earned (TIE) or interest coverage ratio is a measure of a
company's ability to honor its debt payments. It may be calculated as either EBIT or
EBITDA divided by the total interest payable.
Times Interest Earned = EBIT/Interest
= 12991 = 18.99
684
4- Profitability Ratios
Profitability ratios are a class of financial metrics that
are used to assess a business's ability to generate earnings
relative to its revenue, operating costs, balance sheet assets, and
shareholders' equity over time, using data from a specific point
in time.
Gross Profit Margin:
Gross profit margin is a metric used to assess a
company's financial health and business model by revealing the
amount of money left over from sales after deducting the cost of
goods sold. The gross profit margin is often expressed as a
percentage of sales and may be called the gross margin ratio.
GPM = Gross Profit
Net Sales

= 13789 = 0.150
91439
Operating Profit Margin:
Operating Profit Margin is a profitability or performance ratio used to
calculate the percentage of profit a company produces from
its operations, prior to subtracting taxes and interest charges. It is
calculated by dividing the operating profit by total revenue.
OPM = EBIT
Net Sales

=12991 = 0.140
91439
Net Profit Margin:
The net profit margin is equal to how much net income or profit
is generated as a percentage of revenue
NPM = Earnings Available to Common Stockholders Sales
Sales
= 10135 = 0.110
91439
Earning Per Share:
Earnings per share is the portion of a company's profit that is
allocated to each outstanding share of its common stock. It is
calculated by taking the difference between a company's net income
and dividends paid for preferred stock and then dividing that figure by
the average number of shares outstanding.
EPS = Earnings Available to Common Stockholders
N Number of Shares Outstanding

= 10135 / 4353 = 2.328

Return On Total Assets:
Return on total assets (ROTA) is a ratio that measures a
company's earnings before interest and taxes (EBIT) relative to
its total net assets.
ROA= Earnings Available to Common Stockholders
Total Assets
= 10135 = 0.0739
137015
Return On Equity:
Return on equity (ROE) is a measure of financial performance
calculated by dividing net income by shareholders' equity.

ROE= Earnings Available to Common Stockholders

T Total Equity
= 10135 = 1.735
5840
Financial Statements