Fin 516 - Minicase - John Deere & Co

This document provides an in depth company analysis of Deere & Company (DE). In the first segment of the analysis, an overview of John Deere’s history, product and service offerings, corporate strategy, and a synopsis of the heavy equipment production industry will be evaluated. The second segment includes a financial overview and analysis of the three most recent

John Deere & Company manufactures and distributes agriculture equipment as well as a broad range of construction and forestry equipment. The company is partnered with FedEx in order to maintain the logistics flow involved with the company’s transactions. FedEx is responsible for providing outsourced transportation services to 11 Deere facilities across the US and Canada. The 11 Deere facilities have different service agreements with FedEx in terms of cost and service depending on the type of business unit.

Deere & Company, together with its subsidiaries (John Deere), incorporated in 1958, operates in three business segments: agriculture and turf segment, construction and forestry segment, and credit segment. The agriculture and turf segment, created by combining the former agricultural equipment and commercial and consumer equipment segments, manufactures and distributes a range of farm and turf equipment, and related service parts. The construction and forestry segment manufactures, distributes to dealers and sells at retail a range of machines and service parts used in construction, earthmoving, material

The Coca-Cola company has been in business since its inventor began selling it in drug stores in 1886 (The Coca-Cola Company, 2009). Pepsi-Cola was invented a short time later in 1898, but at the time it was called “Brad’s drink.” It was later renamed Pepsi-Cola in 1902 (Butler, 2006). Since those early days when the sodas were invented, Coca-Cola and Pepsi have been in competition with each other for the domination of the world’s soda market. Over the course of more than a century, sales have continued to rise for both companies, and they both consistently earn a profit. Both companies

Ron, good point if a company's debt ratio is higher than it equity ratio they can run into problems. This one area creditor focus on before lending money to companies or people. A profit margin and cash flow are areas of concern investors. If Under Armour did not make a profit for the first quarter how would this affect them? A lot of company runs into finacial problems because their operating cost is to to high. Some are trying to grow the company to fast. Good post

Starting out in Grand Detour, Illinois, as a blacksmith way back in 1837, John Deere got his start making steel plows to cut through the sticky Midwest prairie soil (History: Timeline & Inventions, 2016). One hundred and eighty years later, John Deere has become a multi-billion dollar company that has made an enormous impact on the agriculture business in the United States and around the world. Because of its significance, it is important for John Deere to model what a good company looks and acts like. This can be seen through John Deere’s charitable giving, technology policies, environmental policies, and customer service.

Debt Ratio also known as the total debt ratio which is (total assets-total equity)/(total assets). The Debt Ratio looks at all debts to all creditors. Debt to Equity Ratio is the total debt/ total equity. This looks at the long-term solvency measure to look at long-term ability for the firm to pay its bills. The debt to equity ratio is calculated by dividing total liabilities by total equity. The debt to equity ratio is considered a balance sheet ratio because all of the elements are reported on the balance sheet. The debt to equity ratio for 2010 was 1.6455% and for 2009 1.289%. A debt to equity ratio of 1 would mean that investors and creditors have an equal stake in the business assets. This means that there may be a lack of performance for the reason why there ratio is close to 1.

Its role in finance is just as it states in the definition, to tell the net worth of a company. ("Investorword", 2012).

Its role in finance is just as it states in the definition, to tell the net worth of a company. ("Investorword", 2012).

The debt to assets ratio is a pointer of the quantity of a company's assets that are being financed with debt, rather than equity. A ratio greater than 1 indicates that a large amount of assets are being funded with debt, while a low ratio indicates that the mass of asset money is coming from equity. The ratio is used to determine the financial threat of a business.

The debt-to-equity ratio according to Sobel, M “MBA in a nutshell” is a measure of longterm solvency, in relative terms. The formula that expresses this according to Sobel, M “MBA in a nutshell”:

Cost of debt : Cost of debt is the interest rate that the company pays on its debt content of the capital structure. It can be measured as before tax cost of debt or after tax cost of debt. Tax plays an important role as the debenture interest expense is allowed as an expense for tax purposes. Debt may be issued at par, at premium or at a discount. It may be irredeemable or redeemable.

The higher the ratio, the greater risk will be associated with the firm 's operation. In addition, high debt to assets ratio may indicate low borrowing capacity of a firm, which in turn will lower the firm 's financial flexibility.

24) Lever Brothers has a debt ratio (debt to assets) of 40%. Management is wondering if its current capital structure is too conservative. Lever Brothers’ present EBIT is $3 million, and profits available to common shareholders are $1,560,000, with 342,857 shares of common stock outstanding. If the firm were to instead have a debt ratio of 60%,

The study generally aims to fill the gap in the literature by empirically examining the relationship between the use of debt in the capital structure of companies and the factors related to the capital structure. Specifically the objectives of this research are to achieve the following:-