Deere Company DEERE Bond
DE Stock | USD 374.76 6.41 1.74% |
Deere Company holds a debt-to-equity ratio of 2.549. Deere's financial risk is the risk to Deere stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Deere's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Deere's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Deere Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Deere's stakeholders.
For most companies, including Deere, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Deere Company the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book 5.0094 | Book Value 81.951 | Operating Margin 0.2083 | Profit Margin 0.1616 | Return On Assets 0.0894 |
Deere |
Given the importance of Deere's capital structure, the first step in the capital decision process is for the management of Deere to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Deere Company to issue bonds at a reasonable cost.
Popular Name | Deere DEERE 5375 percent |
Specialization | Farm & Heavy Construction Machinery |
Equity ISIN Code | US2441991054 |
Bond Issue ISIN Code | US244199BD66 |
Deere Company Outstanding Bond Obligations
DEERE 655 percent | US244199AW56 | Details | |
DEERE 81 percent | US244199AZ87 | Details | |
DEERE 7125 percent | US244199BA28 | Details | |
DEERE 5375 percent | US244199BD66 | Details | |
US244199BG97 | US244199BG97 | Details | |
DEERE 39 percent | US244199BF15 | Details | |
US244199BH70 | US244199BH70 | Details | |
DEERE CO | US244199BK00 | Details | |
US244199BJ37 | US244199BJ37 | Details |
Understaning Deere Use of Financial Leverage
Deere financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Deere's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Deere assets, the company is considered highly leveraged. Understanding the composition and structure of overall Deere debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Deere's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Deere's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
Deere Company manufactures and distributes various equipment worldwide. Deere Company was founded in 1837 and is headquartered in Moline, Illinois. Deere operates under Engines And Heavy Machinery classification in the United States and is traded on New York Stock Exchange. Please read more on our technical analysis page.
Also Currently Popular
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.When determining whether Deere Company is a strong investment it is important to analyze Deere's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Deere's future performance. For an informed investment choice regarding Deere Stock, refer to the following important reports:Check out the analysis of Deere Fundamentals Over Time. Note that the Deere Company information on this page should be used as a complementary analysis to other Deere's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Complementary Tools for Deere Stock analysis
When running Deere's price analysis, check to measure Deere's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Deere is operating at the current time. Most of Deere's value examination focuses on studying past and present price action to predict the probability of Deere's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Deere's price. Additionally, you may evaluate how the addition of Deere to your portfolios can decrease your overall portfolio volatility.
CEOs Directory Screen CEOs from public companies around the world | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |
Is Deere's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Deere. If investors know Deere will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Deere listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.12) | Dividend Share 5.54 | Earnings Share 33.2 | Revenue Per Share 206.898 | Quarterly Revenue Growth (0.12) |
The market value of Deere Company is measured differently than its book value, which is the value of Deere that is recorded on the company's balance sheet. Investors also form their own opinion of Deere's value that differs from its market value or its book value, called intrinsic value, which is Deere's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Deere's market value can be influenced by many factors that don't directly affect Deere's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Deere's value and its price as these two are different measures arrived at by different means. Investors typically determine if Deere is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Deere's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.