Measure the liquidity of Deere & Co. for each year using the company’s net worki
ID: 2723131 • Letter: M
Question
Measure the liquidity of Deere & Co. for each year using the company’s net working capital and current ratio
Is the trend in Deere’s liquidity improving over this period?
The company’s net capital for 2011 is? The company’s current ratio for 2011 is?
The company’s net capital for 2012 is? The company’s current ratio for 2012 is?
The company’s net capital for 2013 is? The company’s current ratio for 2013 is?
($ thousands) 2013 2012 2011 Current Assets Cash and cash equivalents 2135000 2108000 1692100 Short-term investments 0 1736900 0 Net receivables 3999500 3781200 3435400 Inventory 2970500 2231200 1852700 Total Current Assets 9105000 9857300 6980200 Current liabilitites Accounts payable 6503400 3169600 4687800 Short-term/current long-term debt 8550200 10565300 8065100 other liabilities 0 2842900 0 Total Current liabilities 15053600 16577800 12752900Explanation / Answer
Calculation of Deere & Co.Net working Capital and Current ratio Year 2013 2012 2011 Total Current assets (A) 9105000 9857300 6980200 Total Current Liabilities (B) 15053600 16577800 12752900 Net working Capital (A - B) -5948600 -6720500 -5772700 Current Ratio (A / B) 0.60 0.59 0.55 The rising trend in Current ratio indicates that the liquidity postion of Deere & Co.is improving year by year.