Xacc 280 Final
Financial Analysis
Coca-Cola and PepsiCo
1/28/2013
University of Phoenix
Alexander Jackson
We will be comparing two companies; both are strong and have great credibility. Ideally with a solid competitor we want to show differentials and make a solid contrast. In this case we want to compare at least two years of financial data. A great way to exemplify this is to compare Coke to Pepsi. To say which one is better to drink is debatable, but what we are looking at is which is better to invest in. We will analyze the information provided in the appendixes and make a conscience decision as to which company is stronger, therefore a smarter investment choice. After all, I wouldn’t want you to throw your money down the drain.
The three main characteristics used to determine a company’s success are liquidity, solvency, and of course profit. The aspects, when analyzed, can help you decide which is more successful and financially honored as a better investment. This can also help someone decide which is more successful and financially stable. While we look at these statements I would like to keep in mind how good it is to look at trend over time.
This opens our next concept which is vertical and horizontal analysis. By taking a step back and going over the ratio analysis which is composed of the three main characteristics, we are able to see what has happened during the time period we compare with. Hence us making our intelligent investment decision.
Going back, ratio analysis is where we divide two numbers in order to get a percentage which we will compare to the competitor. First characteristic is liquidity. This is where we see the company paying their debts, and on time. This is very similar to an individual person’s credit score. Are they paying their bills? This shows financial responsibility and that is a very important component in investments. The information is typically shown as a ratio or percentage of the liquid assets. The higher the ratio the
Coca-Cola and PepsiCo
1/28/2013
University of Phoenix
Alexander Jackson
We will be comparing two companies; both are strong and have great credibility. Ideally with a solid competitor we want to show differentials and make a solid contrast. In this case we want to compare at least two years of financial data. A great way to exemplify this is to compare Coke to Pepsi. To say which one is better to drink is debatable, but what we are looking at is which is better to invest in. We will analyze the information provided in the appendixes and make a conscience decision as to which company is stronger, therefore a smarter investment choice. After all, I wouldn’t want you to throw your money down the drain.
The three main characteristics used to determine a company’s success are liquidity, solvency, and of course profit. The aspects, when analyzed, can help you decide which is more successful and financially honored as a better investment. This can also help someone decide which is more successful and financially stable. While we look at these statements I would like to keep in mind how good it is to look at trend over time.
This opens our next concept which is vertical and horizontal analysis. By taking a step back and going over the ratio analysis which is composed of the three main characteristics, we are able to see what has happened during the time period we compare with. Hence us making our intelligent investment decision.
Going back, ratio analysis is where we divide two numbers in order to get a percentage which we will compare to the competitor. First characteristic is liquidity. This is where we see the company paying their debts, and on time. This is very similar to an individual person’s credit score. Are they paying their bills? This shows financial responsibility and that is a very important component in investments. The information is typically shown as a ratio or percentage of the liquid assets. The higher the ratio the