When a company makes such significant purchases, wise investors closely monitor this ratio in subsequent years to observe the effectiveness of such an investment in fixed assets. Indications of the Fixed-Asset Turnover Ratio A higher ratio is indicative of greater efficiency in managing fixed-asset investments, but there is not an exact number or range that dictates whether a company has been efficient at generating revenue from such investments.
CATthe manufacturer of heavy equipment for mining companies and the construction industry, as well as a supplier of gas and diesel engines and turbines used to run drilling machines in energy productions, has seen its fair share of the boom and bust along with the rise and fall of commodities and energy.
Caterpillar might do no wrong, but the commodity and energy producer markets it serves may dictate the ebb and flow of its business. When demands for metals and energy are down, miners and drillers halt their expansions and stop ordering new machines from Caterpillar and other similar companies.
Adjusting to market volatility, Caterpillar has to follow a similar downsizing process amid sales declines, including trimming productions and reducing workforce, in an effort to cut costs and preserve profitability. One thing Caterpillar shareholders still hope for in such market downturns is continued dividend payments from the company, especially given the loss of market value of their shares in the stock market.
Operating Margin Despite its cost-cutting efforts, Caterpillar has had a difficult time defending its profitability.
For the 12 months ending on Sept. Even if Caterpillar had maintained its previous higher profit margins, profits would be still smaller when applied to lower sales. With narrower profit margins, Caterpillar has been reporting even smaller profits. With earnings contraction often comes drops in stock valuation.
It is not a coincidence that Caterpillar stock retreated by the end of to the same price level it reached around the end of Dividend Payout The lack of capital gains for Caterpillar shareholders may be compensated by more dividend payments if the company is committed to best using its cash flow on hand.
In andwhen Caterpillar reported decreased earnings, cash flow from operations actually outsized the amount of cash needed for making investments and honoring financing obligations, making it possible for the company to distribute more cash back to shareholders.
The payout ratio compares dividends paid to total net income available for shareholders.
During its business downturn, the company has maintained dividend growth rates above its five-year average, and the stock's dividend yield is a sizable 4. If the dividend distribution trend continues, Caterpillar stock may become attractive for income-seeking investors, despite challenges with its business and stock price.
Sales Growth Caterpillar's sales growth rate for was Sales continued to decline in its most recent fiscal year ofthough by a much smaller percentage.
Because of the market downturn, Caterpillar needs to look to something else for any potential sales growth in more immediate terms. One initiative the company has taken on is to provide service and parts replacement to existing customers.
The goal is to help Caterpillar equipment owners run the machines more efficiently and reduce their operating costs. In the process, Caterpillar can build better customer relationships and gain stronger customer loyalty.
Sales of this nature will be small but may help foster future orders of new equipment. Without taking any new sales initiatives, Caterpillar cannot maintain its average sales growth rate of Trading Center Want to learn how to invest?
Get a free 10 week email series that will teach you how to start investing. Delivered twice a week, straight to your inbox.A profitability ratio calculated as operating income divided by revenue. Caterpillar Inc.'s operating profit margin deteriorated from to but then improved from to exceeding level.
P/E Ratio (TTM) The Price to Earnings (P/E) ratio, a key valuation measure, is calculated by dividing the stock's most recent closing price by the sum of the diluted earnings per share from continuing operations for the trailing 12 month period.
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives for construction, resource, and energy and transportation industries. Farmers Insurance Group (informally Farmers) is an American insurer group of automobiles, homes and small businesses and also provides other insurance and financial services yunusemremert.coms Insurance has more than 48, exclusive and independent agents and approximately 21, employees.
It is a subsidiary of the Swiss company Zurich Insurance Group. P/E Ratio (TTM) The Price to Earnings (P/E) ratio, a key valuation measure, is calculated by dividing the stock's most recent closing price by the sum of the diluted earnings per share from continuing operations for the trailing 12 month period.
Kit for EPG / on the Caterpillar Engine Introduction These instructions apply to the manufactured by Woodward as mounted on a Caterpillar diesel engine driving a generator set. The operates the speed setting shaft on the Caterpillar speed control is not supplied in the mounting kit.
This lever must be obtained from Caterpillar or from some other source.