Final Financial Analysis

1863 WordsSep 1, 20118 Pages
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…show more content…
These are the current ratio, the acid test, a receivables turnover, and the inventory turnover. I will perform and show the testing of the current ratio for the PepsiCo. and Coca Cola company for the year 2005. The Current Ratio for PepsiCo. Inc. 2005 Current Assets 10,454 divided by Current Liabilities 9,406 = 1.11 So the current ratio is: Current assets are 111% of current liabilities. Current Ratio for Coca-Cola Company 2005 Current Assets 10,250 divided by Current Liabilities 9,836 = 1.04 So the current ratio is: Current assets are 104% of current liabilities. The Solvency Ratio measures the ability of a company to survive over a long period of time (2010). This is important to investors, lean holders, and long term creditors. There are two ways of figuring out how to perform a solvency ratio test for a company, one is the debt to total assets ratio, another is the times interest earned. I will perform the debt to total assets ratio for both company’s. This is done by dividing the total debt by the total assets. Debt to Total Assets Ratio for PepsiCo. for 2005 Total Debt 17,476 divided by Total Assets 21,727 = .5508 = 55.1% So the Total Assets to Ratio for PepsiCo. for the year 2005 is 55.1% Debt to Total Assets Ratio for Coca Cola Company for 2005 Total Debt
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