Is it me or does anyone else see the amount of borrowing CAT has been doing lately to keep their cash flow statements looking positive? From 2010 - 2012 that amount of borrowing has skyrocketed! Can this stock sustain that level of borrowing for the long term? Most likely what will happen is a dividend cut when everyone least expects it. For disclosure I do not own CAT shares but would be interested if the share price pulled back below $80 per share based on the Debt to Cash ratio; though do realize they have other assets besides cash.
From the point of view that most of the borrowing Cat does is associated with Cat Finance, it indirectly does effect cash flow. They borrow at their AA corporate rate of 1-2% and lend it to buyers of Cat equipment at 5-6% commercial rates. So to the extent that those margins flow into Cat's overall financial stamens it adds to cash flow. But it doesn't work the way you're thinking. Borrowing money just to bolster your capital structure is not recognized as cash flow.