Financial Analysis Coca-Cola
Financial Analysis for the Coca-Cola Company and PepsiCo years 2004 and 2005.
Financial Analysis is very important to present how well a company is being managed. Keeping track of financial statements, taxes, audits, and various other areas of financials show how well a company is doing, or better yet has done in these years, and the probability of improvement in the future. Having data on how a company will do in the future is important so that management, investors, and creditors can see if there are areas that need improvement and work on them they become an issue and hinder the growth of the company. In this essay I will compare financial data from Coca Cola Company and PepsiCo. This essay briefly describes what vertical and horizontal analysis is, and then it goes over the vertical analysis from both companies, comparing one to the other. The same is done with the horizontal analysis of both companies, comparing both as well. The description of the ratio analysis and the ratio analysis of both companies is shown, including the liquidity ratio, solvency ratio, and profitability ratio. It concludes with this writer’s own opinion which company is more financially healthy with examples; using comparison of the data acquired from the appendixes A & B. Also, three recommendations to improve each company financial health for the future. The most used tools of financial analysis are horizontal analysis, vertical analysis, and ratio analysis (all will be shown later). Vertical analysis, also called common-size analysis, expresses each financial statement item as a percentage of an original base amount. The vertical analysis shows how much assets, liabilities, or stockholders equity have improved or declined from the year before. I am providing two examples of vertical analysis, one for Coca-Cola Company, and the other, for PepsiCo. To show by comparison which company has improved, or declined in assets and liabilities. Measures of Vertical Analysis for
Financial Analysis is very important to present how well a company is being managed. Keeping track of financial statements, taxes, audits, and various other areas of financials show how well a company is doing, or better yet has done in these years, and the probability of improvement in the future. Having data on how a company will do in the future is important so that management, investors, and creditors can see if there are areas that need improvement and work on them they become an issue and hinder the growth of the company. In this essay I will compare financial data from Coca Cola Company and PepsiCo. This essay briefly describes what vertical and horizontal analysis is, and then it goes over the vertical analysis from both companies, comparing one to the other. The same is done with the horizontal analysis of both companies, comparing both as well. The description of the ratio analysis and the ratio analysis of both companies is shown, including the liquidity ratio, solvency ratio, and profitability ratio. It concludes with this writer’s own opinion which company is more financially healthy with examples; using comparison of the data acquired from the appendixes A & B. Also, three recommendations to improve each company financial health for the future. The most used tools of financial analysis are horizontal analysis, vertical analysis, and ratio analysis (all will be shown later). Vertical analysis, also called common-size analysis, expresses each financial statement item as a percentage of an original base amount. The vertical analysis shows how much assets, liabilities, or stockholders equity have improved or declined from the year before. I am providing two examples of vertical analysis, one for Coca-Cola Company, and the other, for PepsiCo. To show by comparison which company has improved, or declined in assets and liabilities. Measures of Vertical Analysis for