Executive Solution Overview
One critical component of financial analysis involves comparing a firm’s financial statements with other firms in the industry. Through such a comparison, financial managers can reveal useful information about risks, investment opportunities, market indicators, and economic factors. Throughout this …
Assignment Prompt & Instructions
One critical component of financial analysis involves comparing a firm’s financial statements with other firms in the industry. Through such a comparison, financial managers can reveal useful information about risks, investment opportunities, market indicators, and economic factors.
Throughout this course, you have been researching and analyzing various financial statements for Deere & Company. For this Final Paper, you will culminate your analysis with an in-depth comparison of Deere & Company and Caterpillar Inc.
In your project, you will complete the following items based on the files you previously downloaded:
– Examine the four primary financial statements for each firm and address the following:
– Statement of Cash Flows:
– Compare the statement of cash flows for the two firms, noting the major inflows and outflows of cash.
– Income Statement:
– Compare the income statements for the two firms, noting the issues each one faces regarding sales projections.
– Balance Sheet:
– Compare the balance sheets for the two firms, noting any issues each firm may want to address regarding liability, and how each firm might be impacted by increasing interest rates.
– Shareholder Equity:
– Calculate the shareholder equity for each firm.
– Calculate the following ratios and provide a trend analysis on each company:
– ROI analysis
– Ratio analysis, to include the following ratios (please be sure to show calculations):
– Profit margin
– Return on assets
– Return on equity
– Receivable turnover
– Average collection period
– Inventory turnover
– Current ratio
– Working capital
– Debt-to-total assets
– Debt-to-equity
– Earnings per share
– Price to earnings ratio
– Create a horizontal, vertical, and trend analysis of the Income statement and Balance Sheet.
– Compare and contrast the two firms in the context of the global economy, noting which types of cultural differences might impact each firm as it does business in other countries.
– Include examples to illustrate your point.
– Compare and contrast each firm’s global strategic plan based on the information in the annual report from two years ago.
– Propose which company would be better to invest in, based on the above comparisons. Your proposal should include the key metrics you used to make your decision.
8 Pages