Final Financial Analysis
Final Financial Analysis
Axia College University of Phoenix
Financial Analysis is very important to the inner workings of a business. Keep track of financial statements, taxes, audits, and various other areas of financials will show how well a company has done, is doing, and how well it will do in the future. Seeing how well a company is doing into the future is important so they can see any mistakes and try to fix them before they become an issue and hinder the growth of the company. In this essay I will compare financial statements in two companies, PepsiCo. and Coca Cola Company. I will describe what vertical and horizontal analysis is then I will go over the vertical analysis of both companies, comparing one to the other. I will go over the horizontal analysis of both companies, comparing them as well. I will describe ratio analysis and I will show the ratio analysis of both companies, including the testing of a liquidity ration, a solvency ratio, and a profitability ratio. I will explain in my own opinion which company is more financial stable and why, using comparisons of the data from the data stated. I will finally include three recommendations to improve each company’s financial health for the future.
The three most common tools of financial analysis are the vertical analysis, the horizontal analysis, and the ration analysis (which will be discussed later). The vertical analysis evaluates financial statement data by expressing each item in a financial statement as a percentage of an original base amount (2010). The vertical analysis is also referred to as the common size analysis. The vertical analysis shows all data on a financial statement document in terms of a percentage. The vertical analysis will show how much assets, liabilities, or stockholders equity have gone up or declined from the year before. I am providing two examples of vertical analysis, one for PepsiCo. and one for Coca Cola to show which company has improved with assets and
Axia College University of Phoenix
Financial Analysis is very important to the inner workings of a business. Keep track of financial statements, taxes, audits, and various other areas of financials will show how well a company has done, is doing, and how well it will do in the future. Seeing how well a company is doing into the future is important so they can see any mistakes and try to fix them before they become an issue and hinder the growth of the company. In this essay I will compare financial statements in two companies, PepsiCo. and Coca Cola Company. I will describe what vertical and horizontal analysis is then I will go over the vertical analysis of both companies, comparing one to the other. I will go over the horizontal analysis of both companies, comparing them as well. I will describe ratio analysis and I will show the ratio analysis of both companies, including the testing of a liquidity ration, a solvency ratio, and a profitability ratio. I will explain in my own opinion which company is more financial stable and why, using comparisons of the data from the data stated. I will finally include three recommendations to improve each company’s financial health for the future.
The three most common tools of financial analysis are the vertical analysis, the horizontal analysis, and the ration analysis (which will be discussed later). The vertical analysis evaluates financial statement data by expressing each item in a financial statement as a percentage of an original base amount (2010). The vertical analysis is also referred to as the common size analysis. The vertical analysis shows all data on a financial statement document in terms of a percentage. The vertical analysis will show how much assets, liabilities, or stockholders equity have gone up or declined from the year before. I am providing two examples of vertical analysis, one for PepsiCo. and one for Coca Cola to show which company has improved with assets and
Citations: (2010). Financial Statment Analysis Chapter 15. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx#. Page 703. (2010). Financial Statment Analysis Chapter 15. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx#. Page 699. (2010). Financial Statment Analysis Chapter 15. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx#. Page 705. (2010). Financial Statment Analysis Chapter 15. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx#. Page 706. (2010). Financial Statment Analysis Chapter 15. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx#. Page 714. (2010). Financial Statment Analysis Chapter 15. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx#. Page 710.