Prior to beginning work on this assignment, retrieve the financial statements you downloaded for Deere & Company in Week 1https://investor.deere.com/home/, and download the following financial statements for Caterpillar Inc., per the instructions below.
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Files to Download
Note: You should still have the reports for Deere & Company from the files you downloaded in Week 1. |
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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.
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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.
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In your project, you will complete the following items based on the files you downloaded above:
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- 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.
- Statement of Cash Flows:
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The Final Project
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- Must be eight to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Writing Center’s APA Style (Links to an external site.) resource.
- Must include a separate title page with the following:
- Title of project
- Student’s name
- Course name and number
- Instructor’s name
- Date submitted
- For further assistance with the formatting and the title page, refer to APA Formatting for Microsoft Word (Links to an external site.).
- Must utilize academic voice. See the Academic Voice (Links to an external site.) resource for additional guidance.
- 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.
- For assistance on writing Introductions & Conclusions (Links to an external site.) as well as Writing a Thesis Statement (Links to an external site.), refer to the Writing Center resources.
- 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 as outlined in the Writing Center’s Citing Within Your Paper (Links to an external site.) guide.
- Must include a separate references page that is formatted according to APA style as outlined in the Writing Center. See the Formatting Your References List (Links to an external site.) resource in the Writing Center for specifications.
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