Xacc280 Week 9 Final
In order for a company to be financially healthy, it is of most importance that the company must analyze, interpret, and review the business’s annual financial reports. The financial analyses of the annual reports provide insights and information regarding the performances of the business. In this paper, I will be disclosing financial evaluations and comparisons between Coca-Coca and PepsiCo Incorporation. The visualizations used in this paper were designed to provide the analyses performed utilizing three financial analyses methods: vertical analysis, horizontal analysis, and ratios analysis. There will also be recommendations made on how Coke and Pepsi could improve their financial status.
Vertical Analysis-Pepsi and Coke
The vertical analysis of the financial statements compares financial data including assets, liabilities, and equity on a yearly basis. A vertical analysis is used most frequently to monitor annual changes. One of the biggest benefits of a vertical analysis is if gives a company the ability to evaluate the comparison between the total net sales and the cost of goods sold. Illustration 1 shows vertical analyses for 2004 and 2005 (select financial data) for Coca-Cola and PepsiCo, Inc. performances.
Illustration 1-Vertical Analyses of Coca-Cola and PepsiCo, Inc. for 2004 and 2005
Coca-Cola Consolidated Balance Sheets 2005 Percent 2004 Percent
Current Assets 10,250 34.83% 12,281 39.06% Inventory 1,424 4.84% 1,420 4.52% Accounts Receivable 2,281 7.75% 2,244 7.14%
Non-current Assets 15,517 52.73% 15,496 49.29% Total Assets 29,427 100.00% 31,441 100.00%
Current Liabilities 9,836 33.43% 11,133 35.41%
Non-current Liabilities 3,236 11.00% 4,373 13.91% Total Liabilities 13,072 44.42% 15,506 49.32%
Total Stockholders
Vertical Analysis-Pepsi and Coke
The vertical analysis of the financial statements compares financial data including assets, liabilities, and equity on a yearly basis. A vertical analysis is used most frequently to monitor annual changes. One of the biggest benefits of a vertical analysis is if gives a company the ability to evaluate the comparison between the total net sales and the cost of goods sold. Illustration 1 shows vertical analyses for 2004 and 2005 (select financial data) for Coca-Cola and PepsiCo, Inc. performances.
Illustration 1-Vertical Analyses of Coca-Cola and PepsiCo, Inc. for 2004 and 2005
Coca-Cola Consolidated Balance Sheets 2005 Percent 2004 Percent
Current Assets 10,250 34.83% 12,281 39.06% Inventory 1,424 4.84% 1,420 4.52% Accounts Receivable 2,281 7.75% 2,244 7.14%
Non-current Assets 15,517 52.73% 15,496 49.29% Total Assets 29,427 100.00% 31,441 100.00%
Current Liabilities 9,836 33.43% 11,133 35.41%
Non-current Liabilities 3,236 11.00% 4,373 13.91% Total Liabilities 13,072 44.42% 15,506 49.32%
Total Stockholders