All questions relate to John Deere Stock (Q1 2016). All websites should show the
ID: 2738840 • Letter: A
Question
All questions relate to John Deere Stock (Q1 2016). All websites should show the same values, however I am using MSN Money as the site that I get my data from for grading. Also note that when looking at financials, you will need to select the Quarterly button to get the quarterly results. Yahoo Stock Price History can also be helpful and you will want to use end-of-day close values
1) Show and compute the following (don’t use Key Ratios precomputed from the site). Compute the ratios using the methods described in this class (which may not always give you the same number as shown in Key Ratios). Note that sales = Total Revenue, and Shares outstanding is reported at the end of the Balance Sheet as “Ordinary Shares Outstanding”
a) Current Assets
b) Current Liabilities
c) Working Capital
d) Book Value per Share
e) Profit Margin on Sales
f) Quick Ratio
g) Gross Margin
h) Inventory Turnover Ratio
i) Debt Ratio
j) ROE
k) Given the Jan 29th closing price, what would the PE ratio be if Earnings from Q1 2016 were used.
2) Caterpillar for Q1 2016
a) What is CAT’s Gross Margin?
b) Profit Margin
c) Quick Ratio
d) Inventory Turnover Ratio
e) Debt Ratio
f) ROE
g) PE Ratio (based on March 31st sales price and revenues from Q1 2016.
3) Based on the data collected in parts 1 and 2, state which stock you would prefer to purchase?
Explanation / Answer
Answer 1 Deere & Co a) Current Assets 40343 b) Current Laibilities 17981 c) Working Capital (40343-17981) 22362 d) Book Value per Share (6590.20/316.70) 20.81 e) Profit Margin on Sales (254.40/5524.50) 4.60% f) Quick Ratio {(40343-4249.50)/17981} 2.01 g) Gross Margin (1684.40/5524.50) 30.49% h) Inventory Turnover Ratio (3840.10/4249.50) 0.90 per quarter i) Debt Ratio (49446/56036.20) 0.88 j) ROE (254.40/3843.10) 6.62% per quarter k) P E Ratio (77.01/8.71) 8.84 Answer 2 CATERPILLAR INC a) Gross Margin (2639/9461) 27.89% b) Profit Margin (-87/9461) -0.92% c) Quick Ratio (33748-9849)/26215 0.91 d) Inventory Turnover Ratio (6822/9849) 0.69 per quarter e) Debt Ratio 62631/78307 0.80 f) ROE -87/5238 -1.66% per quarter g) P E Ratio 76.24/3.54 21.54 Answer 3 On the basis of above caluclations, We would like to invest in Deere & Co.