• Caterpillar Inc. reported a $1.2 billion goodwill impairment due to underperforming acquisitions. The company provided the following financial figures:
  • Goodwill Impairment: $1.2 billion
  • Total Revenue: $55 billion
  • Operating Expenses: $45 billion
  • Net Income: $7 billion

• Requirements:
  1. Calculate Caterpillar’s net income after accounting for the goodwill impairment.
  2. Prepare an income statement showing the impact of goodwill impairment on operating income.
  3. Analyze Caterpillar’s operating profit margin before and after the goodwill impairment.
  4. Discuss the disclosure requirements for goodwill impairments in Caterpillar’s financial statements.
  5. Evaluate the impact of the goodwill impairment on Caterpillar’s future investment strategies.