Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company. Given info: Items of financial statement To determine: The following ratios for three years: (a) Return on total assets (b) Return on stockholders’ equity (c) Earnings per share (d) Dividend yield (e) Price – earnings ratio

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Chapter 14, Problem 2ADM

1.

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.

Given info: Items of financial statement

To determine: The following ratios for three years:

(a) Return on total assets

(b) Return on stockholders’ equity

(c) Earnings per share

(d) Dividend yield

(e) Price – earnings ratio

2.

To determine

To evaluate: D’s profitability

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Deere & Company manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere’s credit division loans money to customers to finance the purchase of their farm and construction equipment.The following information is available for three recent years (in millions except pershare amounts): Please see the attachment for details: 1. Calculate the following ratios for each year, rounding ratios and percentages to one decimal place, except for per-share amounts:a. Return on total assetsb. Return on stockholders’ equityc. Earnings per shared. Dividend yielde. Price-earnings ratio2. Based on these data, evaluate Deere’s profitability.

Analyze Deere & Company Deere & Company (DE) manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere's credit division loans money to customers to finance the purchase of their farm and construction equipment. The following information is available for three recent years (in millions except per-share amounts): Year 3 Year 2 Year 1 Net income (loss) Preferred dividends $1,523.9 $1,940.0 $3,161.7 $ 0.00 $ 763.7 $ 680.0 $ 664.0 $0.00 $ 0.00 Interest expense Shares outstanding for computing earnings per share 315 334 363 Cash dividend per share $ 2.40 $ 2.40 $ 2.22 $ 57,965 $ 59,642 $ 60,429 $ 6,644 $ 7,912 $ 9,667 $ 92.03 $ 81.10 $ 85.58 Average total assets Average stockholders' equity Average stock price per share 1. Calculate the following ratios for each year (Round ratios and percentages to one decimal place, except for per-share amounts. Round per-share amounts to two decimal places.): Year 3…

Analyze Deere & Company Deere & Company (DE) manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere's credit division loans money to customers to finance the purchase of their farm and construction equipment. The following information is available for three recent years (in millions except per-share amounts): Year 3 Year 2 Year 1 Net income (loss) $1,523.9 $1,940.0 $3,161.7 Preferred dividends $ 0.00 $ 763.7 $ 680.0 $ 664.0 $ 0.00 $0.00 Interest expense Shares outstanding for computing earnings per share 315 334 363 Cash dividend per share $ 2.40 $ 2.40 $ 2.22 $ 57,965 $ 59,642 $ 60,429 $ 6,644 $ 7,912 $ 9,667 $ 92.03 $ 81.10 $ 85.58 Average total assets Average stockholders' equity Average stock price per share 1. Calculate the following ratios for each year (Round ratios and percentages to one decimal place, except for per-share amounts. Round per-share amounts to two decimal places.): Year 3…