A Case Study of the Company Caterpillar

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  • Topic: Compound annual growth rate, Economic growth, 2006
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Caterpillar
Indiana University
ADM 524
30 June 2008

Academic Honesty Statement: I have read and understand the plagiarism policy as outlined in the syllabus and the sections in the Student Bulletin relating to the IWU Honesty/Cheating Policy. By affixing this statement to the title page of my paper, I certify that I have not cheated or plagiarized in the process of completing this assignment. I also certify that the work submitted is original work specific for this course. If it is found that cheating and/or plagiarism did take place in the writing of this paper, I understand the possible consequences of the act/s, which could include expulsion from Indiana Wesleyan University. Caterpillar

Caterpillar generates revenues through nine business segments: North America Marketing (14.9% of the total revenues during fiscal year 2006), construction and mining products (13.9%), large power products (10.2%), power systems marketing (6.9%), European marketing (6.5%), Latin America (5.8%), financing and insurance (4.1%), electric power (3.4%), Asia-Pacific marketing (3.3%), and all others (31.0%). The company recorded revenues of $44,958 million during fiscal year ended December 2007, an increase of 8.2%, and $41,517 million during the fiscal year ended December 2006, and an increase of 14.2% over 2005. For the fiscal year 2006, North America, the company’s largest geographic market, accounted for 53% of the total revenues. During the fiscal year 2006, the North America marketing division recorded revenues of $12,118 million in fiscal year 2006, an increase of 6.6% over 2005. The construction and mining products division recorded revenues of $1 1,280 million in fiscal year 2006, an increase of 13.6% over 2005. The inter-segment sales for this division amounted to $1 1,332 million in 2006. The large power products division recorded revenues of $8,345 million in fiscal year 2006, an increase of 17% over 2005. The inter-segment sales for this division amounted to $8,517 million in 2006. The power systems marketing division recorded revenues of $5,591 million in fiscal year 2006, an increase of 18.4% over 2005. The European Marketing division recorded revenues of $5,287 million in fiscal year 2006, an increase of 20.1% over 2005. The Latin America division recorded revenues of $4,717 million in fiscal year 2006, an increase of 19.6% over 2005. The financing and insurance division recorded revenues of $3,360 million in fiscal year 2006, an increase of 17.2% over 2005. The electric power division recorded revenues of $2,797 million in fiscal year 2006, an increase of 20.4% over 2005. The Asia-Pacific marketing division recorded revenues of $2,682 million, an increase of 8.8% over 2005. The all others division recorded revenues of $25,241 million in fiscal year 2006, an increase of 14% over 2005. North America, Caterpillars largest geographical market, accounted for 53% of the total revenues in the fiscal year 2006. Revenues from North America reached $22,007 million in 2006, an increase of 13.6% over 2005. European accounted for 25.7% of the total revenues in the fiscal year 2006. Revenues from European reached $10,664 million in 2006, an increase of 15.6% over 2005. Latin America accounted for 9.3% of the total revenues in the fiscal year 2006. Revenues from Latin America reached $3,841 million in 2006, an increase of 21.9% over 2005. Asia-Pacific accounted for 12.1% of the total revenues in the fiscal year 2006. Revenues from Asia-Pacific reached $5,005 million in 2006, an increase of 8.9% over 2005. Caterpillar is the world’s largest manufacturer of earthmoving machinery; and construction and mining equipment. It is also a leading supplier of agricultural equipment. A strong market position increases the bargaining leverage of the company and its access to wide end markets increases the cross selling opportunities for the company. However, reduced demand from the US and Euro zone as a result...
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