Finals Project - Financial Analysis of Pepsi Co. and Coca-Cola

1940 Words Jun 23rd, 2011 8 Pages
Pepsi Co. and Coca-Cola’s Vertical, Horizontal, and Ratio Analysis
Submitted by: Lataikeii Evans
Date: April 8, 2011
Daneene Barton

Arbitrating a company’s monetary physical stability inculpate their financial statements (income statements, balance sheets, and statement of cash flow). These statements must follow the GAAP standards. Sidewise from the statements that are involved in balancing a company or in my case comparing the financial stability of the two successful companies’ three components are involved. The profitability, liquidity, and solvency are the three factors or components used in the analytical process of determining the success or nonsuccesses of a company.
Understanding of the valuable components of
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Current Asset Percentage (2005)
10,250 (current total assets) = 0.348 (34.8%)
29,427 (total assets)

The same method will be applied to calculate the status of 2004
Current Asset Percentage (2004) 12,281 (current total assets) = 0.391 (39.1%) 31,441(total assets)

Gains from 2004 to 2005

When applying the horizontal analysis in order to find out the increase or the decrease for 2004 and 2005 for Coca-Cola. we take the data that is provided in the text and determine the change in the assets by the percentage. In order to get the results the formula used would be to divide total current assets (2005)/ total current assets (2004).

10,250 total current assets (2005) =0.348 (34.8%)
29,427 total current assets (2004)

Coca-Cola’s assets have increased by 34.8% from.
Calculating the Profitability Ratios of Coca-Cola

Profit (2005)
23,104 (net operating revenues - 8,195 (cost of goods sold) = 0.645 (64.5%)
23,104 (net operating revenues)

Profit (2004)
21,742 (net operating revenues – 7,674 (cost of goods