Problem B Deere & Company manufactures, distributes, and finances a full range of agricultural equipment;...
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Accounting
Problem B Deere & Company manufactures, distributes, and finances a full range of agricultural equipment; a broad range of industrial equipment for construction, forestry, and public works; and a variety of lawn and grounds care equipment. The company also provides credit, health care, and insurance products for businesses and the general public. Consider the following information from the Deere & Company Annual Report:
(in millions)
Year 1
Year 2
Year 3
Year 4
Sales
$12,791
$13,822
$11,751
$13,137
Cost of goods sold
8,481
9,234
8,178
8,936
Gross margin
4,310
4,588
3,573
4,201
Operating expenses
2,694
2,841
3,021
3,236
Net operating income
$ 1,616
$ 1,747
$ 552
$ 965
Prepare a statement showing the trend percentages for each item using Year 1 as the base year.
Use Years 3 (Base Year) and 4 and prepare horizontal analysis showing both dollar change and percentage change.
Use Years 3 and 4 and prepare common size income statements (also known as vertical analysis) for both years.
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