John Deere & Company Financial Analysis

John Deere & Company is an American corporation that was started in 1837 by John Deere, a blacksmith known for his craftsmanship and inventiveness. The Company currently have operations that are categorized into three major business segments. The agriculture and turf segment primarily manufactures and distributes a full line of agriculture and turf equipment and related service parts. The construction and forestry segment primarily manufactures and distributes a broad range of machines and service parts used in construction, earthmoving, material handling and timber harvesting. The financial services segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry

worldwide net sales and revenues have had a decrease of 8 percent to $26,644 million in 2016, compared with $28,863 million in 2015. They have also had net sales of the worldwide equipment operations decline to 9 percent in 2016 to $23,387 million from $25,775 million last year. Equipment net sales in the United States and Canada have also decreased to 13 percent for 2016. Foreign business outside of the U.S. and Canada, net sales have decreased 3 percent from the last year, with a negative currency translation effect of 4 percent for 2016. Worldwide equipment operations had an operating profit of only $1,880 million in 2016, compared with $2,177 million in 2015. This decline is primarily because of reduced shipment volumes, and unfavorable effects of foreign currency exchange and a less favorable product mix. Net income of the Company’s equipment operations was $1,058 million for 2016, compared with $1,308 million in 2015. In addition to the operating factors mentioned above, a higher effective tax rate in 2016 reduced net income. The cost of sales to net sales ratio for 2016 was 78.0 percent, compared with 78.1 percent last year. The decrease was due primarily to price realization and lower production costs, largely offset by the unfavorable effects of foreign currency exchange and the impact of a less favorable product

That's below the machinery industry average of 58.99%. The average price-to-earnings ratio of the machinery industry is 27.59. And John Deere's ratio comes in at 24.59. It's trading at a better value than many of its competitors. The debt-to-equity ratio for John Deere stock is 504.82%. That's above the machinery industry average of 97.88%. That's not a good sign. John Deere's debt levels should be lower. The company's agriculture and turf equipment sales decreased 7 percent in 2016 and are forecast to decrease 1 percent for 2017. Industry agricultural machinery sales in the U.S. and Canada for 2017 are forecast to decrease 5 to 10 percent, compared to 2016. However South American industry sales are projected to increase about 15 percent from 2016 levels. Asian sales are projected to be about the same or increase slightly in 2017. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be approximately the same for 2017. John Deere is subject to a wide variety of local, state and federal environmental laws and regulations in the U.S., as well as the environmental laws and regulations of other countries in which John Deere conducts business. John Deere strives to comply and believes it is in compliance in all material respects with applicable laws and regulations. However, failure to comply with these regulations could lead to fines and other penalties. The U.S. Environmental Protection