Profitability and stockholder ratios Deere & Co. manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere & Co.’s credit division loans money to customers to finance the purchase of their farm and construction equipment.

The following information is available for three recent years (in millions except pershare amounts):

Year 3 Year 2 Year 1 Net income (loss) $3,064.7 $2,799.9 $1,865.0 Preferred dividends $0.00 $0.00 $0.00 Interest expense $782.8 $759.4 $811.4 Shares outstanding for computing earnings per share 397 417 424 Cash dividend per share $1.79 $1.52 $1.16 Average total assets $52,237 $45,737 $42,200 Average stockholders’ equity $6,821 $6,545 $5,555 Average stock price per share $79.27 $80.48 $61.18 1. Calculate the following ratios for each year (Round percentages to one decimal place):

a. Rate earned on total assets

b. Rate earned on stockholders’ equity

c. Earnings per share

d. Dividend yield

e. Price-earnings ratio 2. What is the ratio of average liabilities to average stockholders’ equity for Year 3?

3. Based on these data, evaluate Deere & Co.’s performance.