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 downloaded above:

• 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 trend analyses on each company:
    • ROI analysis
    • Ratio analysis, to include the following ratios:
      • 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
    • Horizontal, vertical, and trend analysis of financial statements
  • 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.

 

The Final Project

• Must be eight to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA style

 

Must include a separate title page with the following:

• Title of project
• Student’s name
• Course name and number
• Instructor’s name
• Date submitted

• Must utilize academic voice.
• Must include an introduction and conclusion paragraph. Your introduction paragraph needs to end with a clear thesis statement that indicates the purpose of your paper.
• Must cite and provide reference entries for the required Deere & Company and the Caterpillar Inc. financial documents in addition to the course text.
• Must document any information used from sources in APA style
• Must include a separate references page that is formatted according to APA style