Income Statement
Caterpillar, Inc.
• An analysis of Caterpillar’s 2015 Income Statement revealed a 15.3% decrease in sales on machinery, energy, and transportation between 2014 and 2015. While the company experienced a nearly negligible change (-1.05%) in operational revenues from 2013 to 2014, they experienced a very severe decline between 2014 and 2015. Operational revenues dropped from $52,142 million to $44,147 million, showing a deterioration from previous years.
• Looking further down the Income Statement, Caterpillar has experienced a 110% increase in other operating expenses between 2013 to 2015. Going from 2013 to 2014, there was a 66.5% increase, and then between 2014 and 2015, there was another large increase, this time of 26.3%.
…show more content…
Still, diluted EPS fell from $8.63 in 2014 to $5.77 in 2015 - a 49.6% decrease, which is a very discouraging sign.
Caterpillar, Inc. vs. John Deere & Co.
• Both Caterpillar Inc. and John Deere & Co. experienced a very tumultuous 2015. They both experienced significant drops in revenues - 15.33% for Caterpillar, related to sales on machinery, energy, and transportation, 21.8% for John Deere, related to equipment operations - from 2014. John Deere may have taken the higher percentage loss, but Caterpillar took the larger dollar value hit. John Deere had a decrease of $7,204.1 million (consolidated income), while Caterpillar had a decrease of $8,173 million (consolidated income).
• To make things worse, it appears that there are some efficiency factors coming into play, as EBIT for both companies fell by more than the decrease in sales. For Caterpillar, equipment sales fell 15.3%, while consolidated EBIT fell 43.8%, and for John Deere, a 21.8% decrease in equipment-related sales led to a 42.0% decrease in consolidated
…show more content…
However, whereas Caterpillar and John Deere manufacture machinery that are substitutes for each other, the success of complementary products are also crucial. Whereas Caterpillar is a company that is based on construction equipment, John Deere is first and foremost an agricultural company. More specifically, a corn-driven company. This is never more evident than when looking at 2015. The 16% drop in stock price in 2015 coincided with a very poor corn harvest, but things are looking up. The USDA recently forecasted a record-high in corn-production, along with soybean production. Corn production is expected to increase by 11% in 2016 compared to 2015, which will greatly help with John Deere equipment sales. In addition, corn prices are finally expected to begin to recover in the next three years (Clark, 2015), which provides yet another positive factor for the growth in sales of John
...ense has decreased 82.8% from 2000 to 2004. All the above are contributing factors in Applebee’s achieving higher earnings, a 75% increase in net earnings from 2000 to 2004. Average shares has fall due to consistent share repurchasing programs by Applebee’s. Overall, the common-size analysis of the income statement are relatively consistent over the five years of study. Cost of goods has stayed consistent between 74%-75%, the Depreciation and amortization is between 9%-11%, income from Continue operations and Net Income are also both between 9%-10% in common-size analysis for income Statement. No unusual flutuations has been discovered.
John Deere Component Works (JDCW), subdivision of John Deere and Co. was in charged specifically of the manufacturing of tractor component parts. The demand for JDCW’s products had problems due to the collapse of farmland value and commodity prices. Numerous and constant failures in JDCW’s competition for bids, alerted top management to start questioning their current costing methods. As an outcome, the analysis has to be guided to research on the current costing methods with the intention of establishing legitimacy and to help the company in adopting a more appropriate costing system.
In 2007, Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years, James Ziemer, knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and with it leveling off, where was Harley going to get the 11-17% was the million dollar question.
Return on sales is decreasing and is below the industry average, but the goods news is that sales and profits have been increasing each year. However, costs of goods are increasing and more inventory is left over each year causing the return on sales to decrease. For 1995, it was 1.7% which is less than the average of 2.44% but is a lot higher than the bottom 25% of companies as seen in exhibit 3, which actually have negative sales return of 0.7%. Return on equity is increasing each year and at a higher rate than industry average. In 1995, it was 20.7%, greater than the average of 18.25% and close to the highest companies in exhibit 3, of 22.1% showing that the return in investment in the company is increasing, which is good for the owner.
When it comes to cost of products sold Hormel has 83.9% in 2013 and 83.2% in 2014. Although this is a small decrease, the data from the statement sheets does show that Hormel’s cost of products is going down. It also is much better than Tyson which has a cost of goods sold ratio of 92.9%. In terms of gross profit, Hormel does better than Tyson with 16.8% compared to 7.1%. Hormel does better in gross profit during 2014 with an increase of .7% from 2013 to 2014. When looking at expenses, Hormel in 2013 had 7.17% for selling and administrative expense, however they decreased to 6.99% in 2014 showing that they reduced their expenses over the year. Hormel still does worse than Tyson in this area due to Tyson having only 3.34% selling and administrative expense. Looking at the operating income as a whole reveals that although Tyson has a smaller expense they also have a smaller operating income with 3.81%, while Hormel has an operating income of 10% in 2014. Hormel increased the operating income by .8% from 2013 to 2014. Ultimately net earnings is one of the most important aspects and Hormel increased from 2013 to 2014. In 2013 Hormel has 6.01% and in 2014 6.47%. This is very different from Tyson’s net earnings which is 7.59%. These net earnings are attributed to each respective corporation and have been adjusted for noncontrolling
Company has been losing money since the first quarter of 1992. Financial fundamentals are sagging:
Looking at the ratio (total liabilities / assets) of both companies is evident in the case of Sears a ratio of 5.93 times, while in Wal-Mart, of 1.38 times. For the foregoing and in view of the increased risk associated with debt, the profitability required by the shareholders at Sears should be greater than that required to Wal-Mart.
In the US there is a large population of outdoor enthusiasts. In 2012 revenue was $3.1 billion and was in increase of 21% from 2008 levels.3 The profits more than doubled over that time span to $173 million.3 About half of Cabela’s sales are associated with hunting related merchandise, and one third of sales are associated with guns and ammunition as well.4 These two statistics do have overlap, hunting merchandise does include guns but not all guns are used for hunting type deal. From 2008 through 2013 stock prices have surged by 440%.3 This gives Cabela’s a market value of $4.7 billion.3 Reasons for the sharp increase in value stem from the rise in gun sales. More restrictive gun control legislation has been discussed lately and this has caused surge for consumers to buy guns before there are the new gun control measures. Gun sales are always welcomed by Cabela’s but there are low profit margins.4 Even with the low profit margins, gun sales do drive more business overall to Cabela’s. Ammunition sales and gun accessories benefit from higher gun sales. Cabela’s also benefits from the
For my course project I will be writing about John Deere. John Deere started his company in 1837 in Grand Detour, Illinois. John Deere was originally a blacksmith, who used piece of polished steel to create plows that aided Midwestern farmers plow through the regions sticky soil. In 1838 John Deere blacksmith turns into John Deere manufacture constructing 185 plows between 1838 and 1841. In 1842, Deere adds retail to the business with the sales of the patented Cary Plow. In a move to make business more efficient, Deere moves his company to Moline, Illinois, the company world headquarters are still located there. Between 1843 and 1849 John Deere becomes co-partners with Leonard Andrus and Robert N. Tate, he late buys them both out in
Revenue, in another word – sales, is the most straightforward figure in the income statement. The figure shows that the revenue of Domino’s Pizza is steadily growing during the past 5 years, which signal strong fundamentals to investors about the performance of the business. Although the expense is growing along with revenue as well during the past 5 years, the profit still remains strong growth as the business of Domino’s is expanding continuously.
However, in each of their financial press releases they mention percentage growth and loss in each sector.
Eastman Kodak’s cash flow statement shows that cash has decreased every year except for in 2012 (Nasdaq, 2015). The reason for this is that the company sold $90,000 of their capital assets and also issued a large amount of debt (Nasdaq, 2015). In 2013 Kodak repaid $811,000 of their debt, this was different from any of the other years (Nasdaq, 2015). They may have done this since 2013 was the only year with a positive net income. Each year from 2011 to 2014 Kodak purchased capital assets (Nasdaq, 2015). Exchange rates had little effect on their cash flow until 2014 where it composed 42% of their total uses of cash.
“The farm implement industry has profoundly shaped both American agriculture and the national economy. Of all farm implements, the tractor has had the greatest impact on rural life” (Robert C. Williams, qtd. in Olmstead).
In January 2004 the company’s CEO, Jeffrey Bleustein, stated that Harley-Davidson’s earnings growth rate should fall in the mid-teens for the foreseeable further and the company expected to increase unit sales to 400,000 units by 2007. However, not everyone was as bullish
The statement of cash flow report shows the effect of all transactions that involve or influence cash but don’t appear on the income statement” (Siciliano, 2015, p. 29). Our executives review the income statement along with statement of cash flow to determine what cuts they will be making if the statements are negative or not meeting the projected forecast. Our current market conditions have been on the decline and have been since the third quarter of 2014. The market conditions have declined at an unforeseen rate. The market forecast for 2016 is projected to be flat according to Eaton’s economic analyst, Arun Raha. The finance department puts out a weekly report similar to an income statement for the executives to review. The executives review the report to make tentative plans on what they will do for staffing, plant shut downs and mandatory unpaid leave of absences (MULA) for the following month. Sometimes these decisions are made within a few weeks’ time. An example on November 3rd, the they decided to shut down two of our plants for two days in November that was not originally planned. The results on the income statement has also lead to three rounds of layoffs.