Caterpillar (BUE:CAT) Beneish M-Score : -2.63 (As of Apr. 28, 2024)

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What is Caterpillar Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.63 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Caterpillar's Beneish M-Score or its related term are showing as below:

BUE:CAT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.9 Med: -2.64 Max: -2.42
Current: -2.63

During the past 13 years, the highest Beneish M-Score of Caterpillar was -2.42. The lowest was -2.90. And the median was -2.64.

Caterpillar Beneish M-Score Historical Data

The historical data trend for Caterpillar's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Caterpillar Beneish M-Score Chart

Caterpillar Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.47

-2.67

-2.58

-2.52

-2.63

Caterpillar Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.61	-2.54	-2.56	-2.63	-2.63

Competitive Comparison of Caterpillar's Beneish M-Score

For the Farm & Heavy Construction Machinery subindustry, Caterpillar's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Caterpillar's Beneish M-Score Distribution in the Farm & Heavy Construction Machinery Industry

For the Farm & Heavy Construction Machinery industry and Industrials sector, Caterpillar's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Caterpillar's Beneish M-Score falls into.

Caterpillar Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Caterpillar for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.4338

0.528 * 0.8785

0.404 * 1.0574

0.892 * 3.0381

0.115 * 1.527

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.056

4.679 * -0.00721

0.327 * 1.0075

-0.29

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was ARS15,790,135 Mil.
Revenue was 13310657.726 + 6162270.006 + 5882659.662 + 4156319.967 = ARS29,511,907 Mil.
Gross Profit was 4919357.584 + 2081526.002 + 2081152.707 + 1441919.988 = ARS10,523,956 Mil.
Total Current Assets was ARS36,786,921 Mil.
Total Assets was ARS70,551,794 Mil.
Property, Plant and Equipment(Net PPE) was ARS10,563,265 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS952,019 Mil.
Selling, General, & Admin. Expense(SGA) was ARS2,897,577 Mil.
Total Current Liabilities was ARS27,272,568 Mil.
Long-Term Debt & Capital Lease Obligation was ARS20,920,118 Mil.
Net Income was 2406180.041 + 966036.001 + 977760.327 + 701279.994 = ARS5,051,256 Mil.
Non Operating Income was 131430.002 + 25631 + 20997.001 + 7440 = ARS185,498 Mil.
Cash Flow from Operations was 1728810.029 + 1445083.001 + 1420797.039 + 779759.994 = ARS5,374,450 Mil.

Total Receivables was ARS3,624,845 Mil.
Revenue was 3133538.173 + 2782486.973 + 2083416.269 + 1714341.534 = ARS9,713,783 Mil.
Gross Profit was 1094822.125 + 803881.728 + 644866.94 + 499610.167 = ARS3,043,181 Mil.
Total Current Assets was ARS9,020,133 Mil.
Total Assets was ARS16,524,860 Mil.
Property, Plant and Equipment(Net PPE) was ARS2,365,266 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS341,749 Mil.
Selling, General, & Admin. Expense(SGA) was ARS903,109 Mil.
Total Current Liabilities was ARS6,290,387 Mil.
Long-Term Debt & Capital Lease Obligation was ARS4,913,661 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(15790135.268 / 29511907.361)	/	(3624845.034 / 9713782.949)
	=	0.535043	/	0.373165
	=	1.4338

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(3043180.96 / 9713782.949)	/	(10523956.281 / 29511907.361)
	=	0.313285	/	0.3566
	=	0.8785

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (36786920.625 + 10563265.18) / 70551793.699)	/	(1 - (9020133.21 + 2365266.205) / 16524860.335)
	=	0.328859	/	0.311014
	=	1.0574

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	29511907.361	/	9713782.949
	=	3.0381

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(341749.239 / (341749.239 + 2365266.205))	/	(952018.762 / (952018.762 + 10563265.18))
	=	0.126246	/	0.082674
	=	1.527

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(2897577.337 / 29511907.361)	/	(903109.199 / 9713782.949)
	=	0.098183	/	0.092972
	=	1.056

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((20920117.856 + 27272567.964) / 70551793.699)	/	((4913661.264 + 6290387.246) / 16524860.335)
	=	0.683082	/	0.678012
	=	1.0075

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(5051256.363 - 185498.003	-	5374450.063)	/	70551793.699
	=	-0.00721

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Caterpillar has a M-score of -0.29 signals that the company is likely to be a manipulator.

Caterpillar Beneish M-Score Related Terms

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Caterpillar (BUE:CAT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Farm & Heavy Construction Machinery » Caterpillar Inc (BUE:CAT) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

CAT:USA CAT:Peru CAT:Mexico 1CAT:Italy CATR:France CAT1:Germany CAT:Chile CATR:Canada CATP34:Brazil CAT:Austria

Address

5205 N. O'Connor Boulevard, Suite 100, Irving, TX, USA, 75039

Website

https://www.caterpillar.com

Caterpillar is the premier manufacturer of heavy equipment, power solutions, and locomotives. It is currently the world's largest manufacturer of heavy equipment with over 13% market share in 2021. The company is divided into four reportable segments: construction industries, resource industries, energy and transportation, and Caterpillar Financial Services. Its products are available through a dealer network that covers the globe with about 2,700 branches maintained by 160 dealers. Caterpillar Financial Services provides retail financing for machinery and engines to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Caterpillar product sales.