Market Value and Book Value

                                            

The market value for Caterpillar, Inc. is $74 billion and the book value is $13 billion.  The ratio of market to book value is 5.7.  These numbers indicate that there is a large amount of intellectual capital at CAT.  At Caterpillar there is $61 billion of intellectual capital present.  This is a huge part of the success of Caterpillar.  They invest large amounts of their time and effort into designing new products as well as redesigning existing products in order to keep their position as number one in their industry.  A large portion of this intellectual capital is provided by the human capital that is present at Caterpillar, Inc.  The employees of CAT bring lots of individual capabilities, knowledge, experience, and unique skills that are used on a daily basis, no matter where in the company these employees fall.  The HR department of Caterpillar plays a huge role in recruiting and hiring these star employees.  They integrate Team Caterpillar into each one of them and instill the virtues of engagement, leadership, and service excellence into each employee.  The employees are able to enhance their skill set by attending Caterpillar University.  Caterpillar University is a place where employees become experts in the area they work in.  If you are a mechanic, you learn how to work on excavators or combines.  If you are a sales representative, you learn better ways to interact with customers and a variety of sales pitches.  You also become an expert on the products you are trying to sell.  Another great aspect of Caterpillar University is the social capital that it provides to the company.  Employees are able to socialize and become good friends with the fellow employees that are attending Caterpillar University.  This creates a sense of belonging and strengthens Caterpillar as a whole.  It also builds an atmosphere where employees are proud of where they work and happy that a great company offers such a wonderful program.  The human capital and social capital at Caterpillar truly enhance and play a big part in the large amount of intellectual capital that the company has.