Looking at the Deere and Co. 2020 First Quarter balance sheets we see total liabilities of $59,877 Million
Looking at the Deere and Co. 2020 First Quarter balance sheets we see total liabilities of $59,877 Million and total equity of $71,821 Million, giving a debt-to-equity ratio of .833. Looking at the prior year we are seeing total liabilities of $58,571 Million, total equity of $69,918 Million, and a debt-to-equity ratio of .838. Overall there is not a great difference between the two years, which I do not find surprising. Out of personal interest I also looked at Quarter 1 of 2021 which shows total liabilities of $61,394 Million, total equity of $75,480 Million, and a debt-to-equity ratio of .813, again not a great change from the prior years, which I actually did find a bit surprising. In previous assessments of Deere and Co. I have stated the importance of the cyclical nature of the industries the company are in and how this could cause issues when looking at long-term borrowings, seeing a debt-to-equity ratio that is so high and relatively constant over the years shows part of that issue. Deere and Co. market is more profitable during the warmer months, traditionally not in quarter 1, high debts and liabilities is not surprising to see during the first quarter for a company like this. What we see is high risk for investors and shareholders. Without looking to other quarters I imagine short-term borrowings would drop during the more profitable quarters for the companies which would decrease this ratio. Assessing this ratio over time is important for financial managers because it can show when and where the company is going wrong with borrowings, if they are going wrong with borrowings, and if the company needs to borrow less and invest more.John Deere. (n.d.). Investor relations.
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Answer preview to looking at the Deere and Co. 2020 First Quarter balance sheets we see total liabilities of $59,877 Million
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