Caterpillar Gross Profit vs. Revenue
| CAT1 Stock | EUR 351.00 1.00 0.29% |
For Caterpillar profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Caterpillar to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Caterpillar utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Caterpillar's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Caterpillar over time as well as its relative position and ranking within its peers.
Caterpillar |
Caterpillar Revenue vs. Gross Profit Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Caterpillar's current stock value. Our valuation model uses many indicators to compare Caterpillar value to that of its competitors to determine the firm's financial worth. Caterpillar is rated below average in gross profit category among its peers. It is rated fifth in revenue category among its peers totaling about 3.82 of Revenue per Gross Profit. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Caterpillar's earnings, one of the primary drivers of an investment's value.Caterpillar Revenue vs. Gross Profit
Gross Profit is the most basic measure of business operational efficiency. It is simply the difference between sales revenue and the cost associated with making a product or providing a service. It is calculated before deducting administrative expenses, taxes, and interest payments.
Caterpillar |
| = | 15.56 B |
Gross Profit varies significantly from one sector to another and tells an investor how much money a business would have made if it didn't have to pay any overhead expenses such as salary, taxes, or rent.
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Caterpillar |
| = | 59.43 B |
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Caterpillar Revenue vs Competition
Caterpillar is rated fifth in revenue category among its peers. Market size based on revenue of Farm & Heavy Construction Machinery industry is currently estimated at about 4.14 Trillion. Caterpillar claims roughly 59.43 Billion in revenue contributing just under 2% to equities under Farm & Heavy Construction Machinery industry.
Caterpillar Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Caterpillar, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Caterpillar will eventually generate negative long term returns. The profitability progress is the general direction of Caterpillar's change in net profit over the period of time. It can combine multiple indicators of Caterpillar, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. The company was founded in 1925 and is headquartered in Deerfield, Illinois. CATERPILLAR INC operates under Farm Heavy Construction Machinery classification in Germany and is traded on Frankfurt Stock Exchange. It employs 97300 people.
Caterpillar Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Caterpillar. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Caterpillar position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Caterpillar's important profitability drivers and their relationship over time.
Use Caterpillar in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Caterpillar position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Caterpillar will appreciate offsetting losses from the drop in the long position's value.Caterpillar Pair Trading
Caterpillar Pair Trading Analysis
The ability to find closely correlated positions to Caterpillar could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Caterpillar when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Caterpillar - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Caterpillar to buy it.
The correlation of Caterpillar is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Caterpillar moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Caterpillar moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Caterpillar can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Caterpillar position
In addition to having Caterpillar in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Banking Thematic Idea Now
Banking
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Banking theme has 61 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Banking Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Caterpillar Stock
When determining whether Caterpillar is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Caterpillar Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Caterpillar Stock. Highlighted below are key reports to facilitate an investment decision about Caterpillar Stock:Check out Trending Equities. For more detail on how to invest in Caterpillar Stock please use our How to Invest in Caterpillar guide.You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
To fully project Caterpillar's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Caterpillar at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Caterpillar's income statement, its balance sheet, and the statement of cash flows.