Pro Forma Financial Statement of Caterpillar

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Summary
Simon Benninga, the author of the book Financial Modelling, explores the operation of Caterpillar, a global leader in the manufacturing and sale of earth moving equipment in chapter six. The author utilizes financial statements of the company in building a Pro Forma model. The core objective is to assess the company’s operation on the framework of financial and accounting parameters. Benninga (2014) provides comprehensive information on the calculation of operating current liabilities, current assets, and other financial debts using a balance sheet. Besides, the writer illustrates the use of a compound average growth rate in calculating parameters, such as the growth of dividends and sales. According to Benninga (2014), companies can utilize regression methodologies in assessing current assets and overall growth rates. The interest expense of different financial products can be classified as part of operating costs. Arguably, the entire chapter is informative on calculating different parameters using either regression, compound average growth rate, or weigh...