Financial Analysis of Caterpillar (Cat)
Abstract:
Long the pride of Peoria, Illinois, Caterpillar, Inc. has established itself as a premier global manufacturing powerhouse whose commercial construction, transportation and engine solutions have come to symbolize durability, quality, and economic progress. This project paper examines the operational and financial numbers resulting from the company’s global sales reach. This paper reviews the publically available corporate financial results for the last decade. This financial data review will be expanded to incorporate how operating and investing activities and results have also impact the Caterpillar bottom line. The paper will conclude with a short summary analysis providing team conclusions to whether the Caterpillar company is a stock worthy of investment ownership. Table of Contents
Abstract: 1
Company Profile 3
Revenues, Earnings (2006-2007) & Outlook (2008) 4
Analysis of 2006 Statement of Cash Flows 5
Operating Activities 5
Investing Activities 6
Financing Activities 6
Pro-Forma Statements 2008 7
S&P / Caterpillar Comparison 9
S&P Index – Dividend Returns 9
Caterpillar – Dividend Returns 9
Cost of Common Stock Calculations 10
Summary Analysis 10
Appendix – Financial & Calculation Tables 12
Balance Sheet 12
Statement of Earnings 13
Cash Flows 13
Free Cash Flow 14
Economic Value Added 14
Market Value Added 14
Costs of Common Stock 15
Capital Asset Pricing Model (CAPM) 15
Discounted Cash Flow (DCF) 15
After Tax Cost of Debt 15
References: 16
Company Profile
Reaching back to the 1890 agricultural steam tractor research being directed by independent entrenpuers Benjamin Holt and Daniel Best, Caterpillar, Inc. has grown to become the world’s largest maker of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Formalized in 1925 upon the merger of The Holt Manufacturing Company and the C. L. Best Tractor Co., the Caterpillar brand and global product line has
Long the pride of Peoria, Illinois, Caterpillar, Inc. has established itself as a premier global manufacturing powerhouse whose commercial construction, transportation and engine solutions have come to symbolize durability, quality, and economic progress. This project paper examines the operational and financial numbers resulting from the company’s global sales reach. This paper reviews the publically available corporate financial results for the last decade. This financial data review will be expanded to incorporate how operating and investing activities and results have also impact the Caterpillar bottom line. The paper will conclude with a short summary analysis providing team conclusions to whether the Caterpillar company is a stock worthy of investment ownership. Table of Contents
Abstract: 1
Company Profile 3
Revenues, Earnings (2006-2007) & Outlook (2008) 4
Analysis of 2006 Statement of Cash Flows 5
Operating Activities 5
Investing Activities 6
Financing Activities 6
Pro-Forma Statements 2008 7
S&P / Caterpillar Comparison 9
S&P Index – Dividend Returns 9
Caterpillar – Dividend Returns 9
Cost of Common Stock Calculations 10
Summary Analysis 10
Appendix – Financial & Calculation Tables 12
Balance Sheet 12
Statement of Earnings 13
Cash Flows 13
Free Cash Flow 14
Economic Value Added 14
Market Value Added 14
Costs of Common Stock 15
Capital Asset Pricing Model (CAPM) 15
Discounted Cash Flow (DCF) 15
After Tax Cost of Debt 15
References: 16
Company Profile
Reaching back to the 1890 agricultural steam tractor research being directed by independent entrenpuers Benjamin Holt and Daniel Best, Caterpillar, Inc. has grown to become the world’s largest maker of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Formalized in 1925 upon the merger of The Holt Manufacturing Company and the C. L. Best Tractor Co., the Caterpillar brand and global product line has
References: Bloomberg.com (2008). Government Bonds. Retrieved on August 7, 2008 from http://www.bloomberg.com/markets/rates/ Brigham, E.F Caterpillar Corporate website (2008). “Caterpillar – About Cat”. Retrieved on June 11, 2008 from http://www.cat.com/cda/layout?m=37406&x=7 EdgarOnline Fidelity.com (2008). Caterpillar, Inc. Bond Data Analytics. Retrieved on August 7, 2008 from http://fixedincome.fidelity.com/fi/FIBondAnalytics?cusip=14912HKQ2 Hendricks, J.A., DeFreitas, D.G., and Walker, D.K Investopedia.com (2008). Financial Terms Dictionary. Retrieved on June 12, 2008 from http://www.investopedia.com Mainmon, E., Peritz, J., and Yancey, K SEC Info.com. (2008) Caterpillar, Inc , Securities Information 2008. SEC Edgar. http://www.secinfo.com/dNAqj.t4r.htm Value Line.com (2008) Yahoo Finance (2008). Caterpillar Financial Profile. Retrieved on June 12, 2008 from http://www.finance.yahoo.com/q/pr?s=CAT