Deere & Company (DE)

Short-term

Turnover ratios

Deere & Co.'s activity ratios provide insights into the efficiency with which the company manages its assets and liabilities to generate sales.

1. Inventory Turnover: This ratio indicates how efficiently Deere & Co. manages its inventory levels. The trend shows a slight fluctuation with a peak of 4.65 in Q4 2023 and a low of 3.45 in Q2 2022. Overall, the company is effectively turning over its inventory, with an average turnover of approximately 4.12 during the period analyzed.

2. Receivables Turnover: The receivables turnover ratio measures how quickly Deere & Co. collects outstanding receivables. The trend is relatively consistent, ranging from 4.75 in Q2 2023 to 6.19 in Q1 2024. This indicates that the company efficiently collects receivables, with an average turnover of around 5.73 over the period.

3. Payables Turnover: The payables turnover ratio reflects how quickly Deere & Co. pays its suppliers. The trend shows an increasing trend, reaching a high of 11.70 in Q3 2023. This suggests that the company is delaying payments to suppliers, potentially improving its cash flow position. However, missing data points make it challenging to ascertain consistency.

4. Working Capital Turnover: This ratio measures how effectively Deere & Co. utilizes its working capital to generate sales revenue. The trend fluctuates, with an average turnover of approximately 8.68 during the period. The company's ability to generate sales from its working capital appears relatively stable, though missing data points limit a more comprehensive analysis.

Overall, Deere & Co.'s activity ratios suggest that the company efficiently manages its assets and liabilities to drive sales and maintain a healthy cash flow position. Further analysis could be conducted by considering industry benchmarks and underlying factors influencing the ratios' movements.

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Average number of days

Deere & Co.'s activity ratios provide insights into the management of its working capital and efficiency in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- Deere & Co.'s DOH has shown fluctuation over the past eight quarters, ranging from 78.50 days to 105.65 days.
- In Q1 2024, the company held inventory for an average of 87.67 days, indicating a slight increase compared to the previous quarter.
- A decreasing trend in DOH is typically favorable as it suggests efficient inventory management and faster inventory turnover. However, the current levels suggest that Deere & Co. may have excess inventory on hand compared to its sales volume.

2. Days of Sales Outstanding (DSO):
- Deere & Co.'s DSO has also varied over the quarters, with values ranging from 58.92 days to 76.84 days.
- In Q1 2024, the company collected receivables in an average of 58.92 days, which is a slight improvement compared to the previous quarter.
- A lower DSO indicates that the company is efficiently collecting payments from customers, thereby improving its cash flow position.

3. Number of Days of Payables:
- Deere & Co.'s payables data is missing for some quarters, but the available figures show fluctuations between 31.19 days and 39.98 days.
- In Q1 2024, the company had payables outstanding for an average of 31.23 days, indicating a decrease compared to the previous quarter.
- A lower number of days of payables suggests that Deere & Co. is paying its suppliers more quickly, which could impact its working capital management and relationships with suppliers.

In conclusion, while Deere & Co. has shown some variability in its activity ratios, further analysis would be required to determine the overall efficiency of its working capital management and operational performance.

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Long-term

Deere & Co.'s long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's ability to generate sales from its investments in fixed assets and total assets, respectively.

Fixed asset turnover measures how efficiently the company generates revenue from its fixed assets. Deere's fixed asset turnover has been consistently high, averaging around 4.45 over the past eight quarters. This indicates that the company is efficiently utilizing its fixed assets to generate sales. The slight fluctuation in the ratio from quarter to quarter is normal, but the overall trend is positive.

Total asset turnover, on the other hand, measures the company's ability to generate sales from all its assets. Deere's total asset turnover has been relatively stable, ranging between 0.54 and 0.61 over the same period. This suggests that the company is effectively using its total assets to generate revenue, with a slight improvement in the recent quarters.

Overall, Deere & Co. demonstrates efficient utilization of both fixed assets and total assets in generating sales, as indicated by its consistently high fixed asset turnover and stable total asset turnover ratios. This efficiency is a positive indicator of the company's operational performance and management of its asset base.