When the global financial meltdown hit, Caterpillar saw its revenue fall from $51.3 billion in 2008 to $32.4 billion in 2009, a 37% plunge that was the largest one-year percentage drop since 1946. Falling stock prices and interest rates hurt the funded status of the company's pension plan, requiring a $3.4 billion charge to equity. Debt-to-equity soared from 31.2% to 59.7% by March 2009. Moody's and Standard & Poor's revised their outlooks and seemed poised to downgrade their debt ratings on the manufacturer of agricultural and mining equipment.

In response, treasury organized a multifunctional Stay Strong initiative to protect the company's profitability, credit rating and dividend. It got results. Caterpillar's enterprise liquidity metric, as defined by the rating agencies, swung from a deficit at the beginning of the crisis to a surplus by December 2009. The success of Stay Strong made cash flow a top-tier metric in the new enterprise strategy the company rolled out in June 2010. In its machinery and power systems business, working capital projects improved cash flow significantly. The majority of the working capital improvement came from increasing the sale of trade receivables (mostly to the company's finance captive) and, supported by supply chain finance, standardizing supplier payment terms. Days sales outstanding fell 12 days, while days payable outstanding increased 17 days.

The swing in liquidity not only stabilized Caterpillar financially, it produced enough surplus cash that the company cancelled plans to issue $2 billion in equity to finance the $8.8 billion acquisition of Bucyrus International in November 2010. "We were able to maintain our credit rating and fund the Bucyrus acquisition without using any new equity, adding significant stockholder value," notes corporate treasurer Ed Scott.

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