Financial Analysis of Caterpillar (Cat) Essay

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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…show more content…
Product groups within the "profit center" divisions focus on serving the needs of the customers associated with a product line. Product group managers have direct control over engineering, manufacturing, and marketing” (Hendricks et al, 2008). Revenues, Earnings (2006-2007) & Outlook (2008) 2007 was the fifth straight year of record sales and revenues and the fourth consecutive year of record profit. Sales and revenues were $44.958 billion, up 8 percent from 2006, and profit per share was $5.37, up 4 percent from 2006. Cat also reported record fourth-quarter sales and revenues of $12.144 billion, 10 percent higher than the fourth quarter of 2006, and profit per share of $1.50, up 14 percent from a year ago. The broad global footprint has enabled Cat to benefit from strong economic growth outside the US, as global markets for mining, energy and infrastructure development are booming. The overall 8 percent growth in sales and revenues were accomplished in a year when end markets in the United States were weak. Considering that North American dealers took machine inventories down $1.1 billion in 2007, the sales story is even more impressive. For the year, sales and revenues increased $3.441 billion —$1.271 billion from higher sales volume including $775 million from the acquisition of Progress Rail, $932 million from improved price realization, $890 million
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