Caterpillar Gross Profit vs. Return On Asset
| CAT1 Stock | 375.00 4.50 1.19% |
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 Return On Asset 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 number one stock in gross profit category among its peers. It also is number one stock in return on asset category among its peers . The ratio of Gross Profit to Return On Asset for Caterpillar is about 210,337,837,838 . 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 Return On Asset 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.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Caterpillar |
| = | 0.074 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Caterpillar Return On Asset Comparison
Caterpillar is currently under evaluation in return on asset category among its peers.
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?
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Furniture
Companies producing and selling home and office furniture. The Furniture theme has 42 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 Furniture 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 information on how to trade Caterpillar Stock refer to our How to Trade Caterpillar Stock guide.You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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.