Financial Analysis

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

Link to caterpillar financials: https://s7d2.scene7.com/is/content/Caterpillar/CM20220502-1dbb9-7449c

Caterpillar 2021 Q4: https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/4q21/4q21-caterpillar-inc-financial-results.pdf

CAT 2021 Q4: https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/4q21/4q21-cat-financial-financial-results.pdf

Deere Annual Report: https://s22.q4cdn.com/253594569/files/doc_financials/2021/ar/Deere-Co_Annual-Report-2021.pdf

Deere 2021 Q4: https://s22.q4cdn.com/253594569/files/doc_financials/2021/q3/4Q_2021_News-Release-and-Financials.pdf