Comparing a firms financial statements

By Support

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:

Caterpillar 2021 Q4:

CAT 2021 Q4:

Deere Annual Report:

Deere 2021 Q4: