Question

Please read Financial Statement Analysis Case 3: Deere & Company in the end of chapter materials in the e Text. All data has been provided. Please answer questions a) & b). Post your answer and respond to two of your classmates for full credit. Case 3: Deere & Company Presented below is the SEC-mandated disclosure of contractual obligations provided by Deere & Company in a recent annual report. Deere & Company reported current assets of $50,060 and total current liabilities of $21,394 at year-end. (All dollars are in millions.) Aggregate Contractual Obligations The payment schedule for the company's contractual obligations at year-end in millions of dollars is as follows: Total Less than 1 year 1-3 years 4 and 5 years More than 5 years Debt Equipment operations $??5,091 $????434 $???270 $???775 $?3,612 Financial services ?31,692 ??9,962 ?11,477 ?6,578 ?3,675 Total 36,783 10,396 11,747 7,353 7,287 Interest on debt 4,777 609 1,069 745 2,354 Accounts payable 2,743 2,611 90 39 3 Capital leases 87 39 42 4 2 Purchasing obligations 3,007 2,970 37 — — Operating leases ?????371 ?????121 ?????134 ????70 ????46 Total $ 47,768 $ 16,746 $13,119 $ 8,211 $ 9,692 Instructions (a) Compute Deere & Company's working capital and current ratio (current assets ÷ current liabilities) with and without the off-balance-sheet contractual obligations reported in the schedule. (b) Briefly discuss how the information provided in the contractual obligation disclosure would be useful in evaluating Deere & Company for loans (1) due in one year and (2) due in five years.

Answer 1