Caterpillar, Inc. — Earnings Quality Grade F
CAT · Industrials
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO increased by 10 days
AR outpaced revenue for 2 consecutive years
Revenue 4.3%, CFFO -2.5%. Cash follows revenue
Expense Quality
Inventory 7.8% vs COGS 11.2%. Normal
CapEx growth 33.3% is >2x revenue growth 4.3%
SG&A/Gross Profit = 32.5%. Normal
Gross margin 31.8%, change -4.2pp. Stable
Cash Flow Quality
CFFO/NI = 1.32. Profits backed by cash
FCF $7.5B, FCF/NI = 0.84
Accruals ratio = -2.9%. Low accruals
Cash $10.0B covers only 23% of debt $43.3B
Balance Sheet Health
Goodwill+Intangibles $5.6B = 26% of equity. Manageable
Debt/EBITDA = 3.0x. Healthy
Other assets 15.1% vs revenue 4.3%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -1% YoY. Normal
Manipulation Score
M-Score = -2.43 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-09