STATEMENT 1 Caterpillar Inc. Consolidated Results of Operations for the Years Ended December 31 (Dollars in millions except per share data) A $ A Sales and revenues: Sales of Machinery, Energy 8. Transportation 5 48,188 $ 39,022 $ 50,755 Revenues of Financial Products 2,783 2,726 3.045 Total sales and revenues 50,971 41,748 53,800 Operating costs: Cost of goods sold 35,513 29,082 36,630 Selling, general and administrative expenses 5,365 4,642 5.162 Research and development expenses 1,686 1,415 1.693 Interest expense of Financial Products 455 589 754 Other operating (income) expenses 1.074 1467 ._____1-271 Total operating costs 44,093 37,195 45,510 Operating prot 6,878 4,553 8,290 Interest expense excluding Financial Products 488 514 421 Other income (expense) 1,814 (44) S572 Consolidated prot before taxes 8,204 3,995 7.812 Provision (benet) for income taxes 1,742 1,006 1.746 Prot of consolidated companies 6,462 2,989 6.066 Equity in prot (loss) of unconsolidated afliated companies 31 14 28 Prot of consolidated and afliated companies 6,493 3,003 5-094 Less: Prot (loss) attributable to noncontrolling interests 4 5 1 Prot $ 6,489 $ 2,998 $ 6,093 ___W See accompanying notes to Consolidated Financial Statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Operations and summary of significant accounting policies C. Inventories We state inventories at the lower of cost or net realizable value. We principally determine cost using the last-in, rst-out (LIFO) method. The value of inventories on the LIFO basis represented about 60 percent of total inventories at December 31, 2021 and 2020. If the FIFO (firstin, first-out) method had been in use, inventories would have been $2,599 million and $2,132 million higher than reported at December 31, 2021 and 2020, respectively. 8. Inventories Inventories (principally using the LIFO method) are comprised of the following: December 31 , (Millions of dollars) 2021 2020 Raw materials $ 5,528 $ 4,021 Workin-process 1,318 1,052 Finished goods 6,907 6,054 Supplies 285 275 Total inventories $ 14,038 $ 1 1,402 _______________ STATEMENT 1 Caterpillar Inc. Consolidated Results of Operations for the Years Ended December 31 (Dollars in millions except per share data) A $ A Sales and revenues: Sales of Machinery, Energy 8. Transportation 5 48,188 $ 39,022 $ 50,755 Revenues of Financial Products 2,783 2,726 3.045 Total sales and revenues 50,971 41,748 53,800 Operating costs: Cost of goods sold 35,513 29,082 36,630 Selling, general and administrative expenses 5,365 4,642 5.162 Research and development expenses 1,686 1,415 1.693 Interest expense of Financial Products 455 589 754 Other operating (income) expenses 1.074 1467 ._____1-271 Total operating costs 44,093 37,195 45,510 Operating prot 6,878 4,553 8,290 Interest expense excluding Financial Products 488 514 421 Other income (expense) 1,814 (44) S572 Consolidated prot before taxes 8,204 3,995 7.812 Provision (benet) for income taxes 1,742 1,006 1.746 Prot of consolidated companies 6,462 2,989 6.066 Equity in prot (loss) of unconsolidated afliated companies 31 14 28 Prot of consolidated and afliated companies 6,493 3,003 5-094 Less: Prot (loss) attributable to noncontrolling interests 4 5 1 Prot $ 6,489 $ 2,998 $ 6,093 ___W See accompanying notes to Consolidated Financial Statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Operations and summary of significant accounting policies C. Inventories We state inventories at the lower of cost or net realizable value. We principally determine cost using the last-in, rst-out (LIFO) method. The value of inventories on the LIFO basis represented about 60 percent of total inventories at December 31, 2021 and 2020. If the FIFO (firstin, first-out) method had been in use, inventories would have been $2,599 million and $2,132 million higher than reported at December 31, 2021 and 2020, respectively. 8. Inventories Inventories (principally using the LIFO method) are comprised of the following: December 31 , (Millions of dollars) 2021 2020 Raw materials $ 5,528 $ 4,021 Workin-process 1,318 1,052 Finished goods 6,907 6,054 Supplies 285 275 Total inventories $ 14,038 $ 1 1,402 _______________ Problem III: Inventory (Caterpillar Inc) Throughout Problem III, assume that Caterpillar faces a marginal tax rate of 20%. Assume that any taxes saved or additional taxes due to the government appear as part of \"accrued expenses\" on the balance sheet. For both ratios, show the numbers used to compute it (i.e., show 25/75=33%, rather thanjust 33%). 1. Had Caterpillar always used FIFO for its entire inventory, what would be Caterpillar's inventory turnover ratio (dened as cost of goods sold divided by ending inventory) for the year ended December 31, 2021 ? 2. Had Caterpillar always used FIFO for its entire inventory, what would be Caterpillar's debt to equity ratio (dened as total liabilities divided by total shareholders' equity) as of December 31, 2021? 3. During the year ended December 31, 2021, how much has Caterpillar saved (or paid extra) in taxes by using LIFO rather than FIFO? Note that your answer should have both a direction and an amount [e.g., saved $1, paid an extra $2, or no effect]