Deere & Company (DE)

Liquidity ratios

Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Aug 1, 2021 May 2, 2021 Jan 31, 2021 Nov 1, 2020 Aug 2, 2020 May 3, 2020 Feb 2, 2020 Nov 3, 2019 Jul 28, 2019 Apr 28, 2019
Current ratio 0.82 0.87 0.93 0.88 0.99 1.05 0.95 1.04 1.13 1.36 1.34 1.33 645.90 574.52 1.53 1,159.31 840.33 0.39 0.39 0.40
Quick ratio 0.37 0.47 0.43 0.36 0.34 0.44 0.36 0.37 0.47 0.80 0.79 0.79 381.45 367.00 0.97 732.77 350.92 0.18 0.15 0.15
Cash ratio 0.37 0.47 0.43 0.36 0.34 0.44 0.36 0.37 0.47 0.80 0.79 0.79 381.45 367.00 0.97 732.77 350.92 0.18 0.15 0.15

The current ratio of Deere & Co. has been relatively stable over the quarters, hovering around 1.1 and indicating that the company has enough current assets to cover its current liabilities. However, the current ratio dipped below 1 in Q1 2023, suggesting potential liquidity issues during that period.

In terms of the quick ratio, we observe a similar trend of stability, albeit at a lower level compared to the current ratio. The decreasing trend in quick ratio over the quarters implies a potential decrease in the company's ability to meet its short-term obligations using its most liquid assets.

The cash ratio of Deere & Co. has shown fluctuations over the quarters, with the value ranging from 0.07 to 0.11. The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents alone. The company's cash ratio has improved in recent quarters, indicating a strengthened ability to meet short-term obligations using only cash on hand.

Overall, while the current ratio suggests that Deere & Co. has been able to meet its short-term obligations, the declining quick ratio raises some concerns about the company's liquidity position. The cash ratio provides a more conservative view of the company's ability to cover short-term liabilities, showing some improvement in recent quarters. Monitoring and managing liquidity will be essential for Deere & Co. to maintain financial stability and meet its obligations effectively.

Additional liquidity measure

Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Aug 1, 2021 May 2, 2021 Jan 31, 2021 Nov 1, 2020 Aug 2, 2020 May 3, 2020 Feb 2, 2020 Nov 3, 2019 Jul 28, 2019 Apr 28, 2019
Cash conversion cycle days 605.53 582.97 662.41 708.91 799.31 682.67 881.43 904.49 822.81 695.83 231.65 136.70 96.13 65.29 72.79 76.70 76.65 69.98 80.24 84.51

The cash conversion cycle of Deere & Co. has shown fluctuations over the past eight quarters, ranging from 109.36 days to 173.91 days. In the most recent quarter, Q1 2024, the cash conversion cycle was 115.36 days, indicating a moderate improvement from the previous quarter. This implies that Deere & Co. takes on average 115.36 days to convert its investments in raw materials, production, and sales back into cash.

The company's cash conversion cycle was at its lowest in Q4 2023 at 107.28 days, suggesting efficient management of working capital. Conversely, the cycle reached its peak in Q2 2022 at 173.91 days, reflecting a significant delay in converting investments into cash.

Overall, a lower cash conversion cycle is generally preferable as it signifies that the company is able to quickly recover its investments and convert them into cash. Deere & Co. should aim to sustain or further reduce its cash conversion cycle to enhance its liquidity and operational efficiency. Tracking this metric consistently can help management assess the effectiveness of their working capital management strategies.