Deere & Company

Article in Better Investing

November 2012

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Deere & Company

• 1. What factors do you see driving Deere's future revenue and earnings growth? What are some of the risks that could adversely impact future growth?
• 2.Thedecompositionofthereturnonequity(ROE)forDeereisshownononeoftheexhibits.Brieflycomparethethreecomponentratiostotheindustryaverages,andcommentonthequalityofDeere'sROE.
• 3. Whatisonepossiblereason(aparticulartransaction)whyDeere'sROEissomuchhigherthantheindustryaverage?
• 4. How did Deere enhance shareholder value during fiscal year 2012 in terms of its uses of free cash flow?
• 5. On the spreadsheet "Deere and Competitors," compare the P/E ratios for Deere and Toro Co. Why do you think Deere has a lower P/E multiple on both current and next year's earnings?
• 6. Examining the financial statements and ratios for Deere, do you detect any deterioration in the balance sheet and cash flow from 2011 to 2012? Explain.