FINANCIAL ANALYSIS OF CATERPILLAR INC. AND JOHN DEERE

Prepared for
Professor Virginia Gean

Prepared by
Chih-Jou Chen
Xiaoxiao Cheng
Shao-Chun Chen
Yin-Ru Lee

February 13th 2014

Table of Contents
I. History for John Deere………………………………………………………….p.2
II. History for Caterpillar Inc.…………………….…………………...…………….p.3
III. Financial risk ratios…………………..……………………………………..…….p.5
IV. Activity ratios………………………………………….....…….….………….….p.8
V. Profitability ratios…………..…………..……………………….…..……...……p.11
VI. Liquidity ratios……..…………………..……………………………..........……p.14
VII. Comprehensive ratios………………………………….………………………….p.17
VIII. Conclusion………………………………………………………………………p.23
IX. References…………………………………………..………….….……………..p.25
.

History for John Deere
The story of John Deere, blacksmith and inventor, closely parallels the settlement and development of the Midwestern United States, an area that 19th century homesteaders considered the golden land of promise. Since 1837, the full story of John Deere the company is one of people, places and products that reflect our core values of integrity, quality, commitment and innovation.
1837 – John Deere begins: John Deere fashions a polished-steel plow in his Grand Detour, Illinois, blacksmith shop that lets pioneer farmers cut clean furrows through sticky Midwest prairie soil. Charles Deere and Alvah Mansur establish the first branch house, Deere, Mansur & Co., in Kansas City. A semi-independent distributor of Deere products within a certain geographic area, it is the forerunner of the company's current farm and industrial-equipment sales branches and sales regions.
1870 –John Deere grows: Despite economic problems among farmers, the Deere business grows. More than 50,000 plows are sold. Noting sagging business prospects and skyrocketing bad debts, the company institutes a 10% wage cut. A brief strike ends and employees return to work on the company's terms. The "leaping deer" trademark is registered. The Gilpin Sulky Plow defeats 50 other plows in a field trial at the Paris Universal Exposition, winning the first place Sevres vase valued at 1,000 francs. Unit sales the following year rise to 5,198, and reach 7,824 in 1883.
The 90s –John Deere comes of age: In the 1899-1900 fiscal years, aggregate business exceeds $2 million for the first time. The company expands its presence around the world when it builds a small-tractor assembly plant in Mexico and buys a majority interest in a German tractor and harvester makers with a small presence in Spain. Soon, it also moves into France, Argentina, and South Africa. In 1966, John Deere’s total sales surpass $1 billion for the first time. Earnings reach a high of $78.7 million. Farm equipment sales set a record for the fourth straight year. Industrial equipment sales notch their largest ever year-to-year increase. Lawn and garden equipment sales rise 76 percent. Worldwide employment hits a record. John Deere introduces the first commercially available rollover protective structures for farm tractors, and later releases the patent to the industry without charge.
The 21st century – one of the most successful companies in the world: Deere is listed among the 50 most-admired companies by Fortune magazine and ranked as one of the 100 best global brands by a leading brand-consulting firm. As a sign of the company's emphasis on global growth, sales outside the U.S. and Canada jump by 38%. The company begins work on plants to produce engines, loaders, and ag equipment in China and tractor and combine factories in India. In addition, two factories are planned for Brazil — one for backhoes and wheel loaders, and a joint venture for excavators. John Deere Domodedovo, Russia, begins building forestry skidders and forwarders, and other facilities are expanded in India, Brazil, Argentina, Russia, and the U.S. In 2012, the company celebrates its 175th anniversary. Net sales and revenues ($36.2 billion) and net income ($3.1 billion) are