Presented below is the SEC-mandated disclosure of contractual obligations provided by Deere & Company in a recent annual report. Deere & Company reported current assets of $50,060 and total current liabilities of $21,394 at year-end. (All dollars are in millions.)

Instructions

a. Compute Deere & Company?s working capital and current ratio (current assets ? current liabilities) with and without the off -balance-sheet contractual obligations reported in the schedule.

b. Briefly discuss how the information provided in the contractual obligation disclosure would be useful in evaluating Deere & Company for loans (1) due in one year and (2) due in five years.

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Less than 1-3 4 and 5 More than 5 years 1 year Total years years Debt $ 5,091 $ 434 $ 270 $ 775 Equipment operations $3,612 Financial services 31,692 9,962 11,477 6,578 3,675 Total 36,783 10,396 11,747 7,353 7,287 Interest on debt 4,777 1,069 745 2,354 609 Accounts payable Capital leases Purchasing obligations Operating leases 2,743 2,611 90 39 3 87 39 4. 42 3,007 2,970 37 371 121 134 70 46 Total $47,768 $16,746 $13,119 $8,211 $9,692