Accounts Receivable Turnover: measures efficiency of collection by dividing Net Sales by Average accounts receivable, net. 2009 = 20756. 1/4376. 58 = 4. 74 2010 = 23573. 2/4869. 82 = 4. 84 Since accounts receivable turnover increase, Deere’s ability to collect receivables quickly also increased. Inventory Turnover: measures efficiency of inventory management by dividing Cost of good sold by Average inventory. 2009 =16255. 2/2397. 3 = 6. 78 2010 = 17398. 8/3063. 0 = 5. 68
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Days’ Sales Uncollected: measures liquidity of receivables by dividing accounts receivables, net by net sales and then multiplying by 365. 2009 = 21882. 9/20756. 1 *365 = 384. 8 2010 = 24349. 1/23573. 2 * 365 = 377. 0 Days’ Sales In Inventory: measures liquidity of inventory by dividing ending inventory by cost of good sold and then multiplying 365. 2009 =2397. 3/20756. 1 * 365 = 42. 16 2010 = 3063. 0/23573. 2 * 365 = 47. 43 Total Asset Turnover: measures efficiency of assets in producing sales by dividing net sales by average total assets. 2009 = 20756. 1/41132. 6 = 0. 50 2010 = 23573. 2/43266. 8 = 0. 54 Solvency
Debt Ratio: measures creditor financing and leverage by dividing total liabilities by total assets. 2009 = 36309. 8/41132. 6 = 0. 88 2010 = 36963. 4/43266. 8 = 0. 85 Equity Ratio: measures owner financing by dividing total equity by total assets. 2009 =4822. 8/41132. 6 = 0. 12 2010 = 6303. 4/43266. 8 = 0. 15 Debt-to-equity Ratio: measures debt versus equity financing by dividing total liabilities by total equity. 2009 = 36309. 8/4822. 8 = 7. 5 2010 = 36963. 4/6303. 4 = 5. 9 Times Interest Earned: measures protection in meeting interest payments by dividing income before interest expense and income taxes by interest expense. 009 = 1339. 2/1042. 4 = 1. 28 2010 = 3025. 2/811. 4 = 3. 73 Profitability Profit Margin Ratio: measures net income in each sales dollar by dividing net income by net sales. 2009 = 873. 5/20756. 1= 0. 04 2010 = 1865. 0/23573. 2= 0. 08 Gross Margin Ratio: measures gross margin in each sales dollar by subtracting cost of goods sold from net sales and then dividing by net sales. 2009 = ( 20756. 1 – 16255. 2)/20756. 1= 0. 22 2010 = (23573. 2 – 17398. 8)/23573. 2 = 0. 26 Return On Total Assets: measures overall profitability of assets by dividing net income by average total assets. 2009
