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 previously downloaded:

• 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 provide a trend analysis on each company: 
  • ROI analysis
  • Ratio analysis, to include the following ratios (please be sure to show calculations): 
    • 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 
  • Create a horizontal, vertical, and trend analysis of the Income statement and Balance Sheet.
• 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.

8 Pages