Financial Analysis Coca-Cola

2218 Words Jan 29th, 2011 9 Pages
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
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This essay provides a ratio analysis for each company with tests of the liquidity ratio, the solvency ratio, and the profitability ratio. The Liquidity Ratio measures the short term ability of a company to pay its maturing obligations and to meet unexpected needs for cash (1). This ratio is particularly interesting for short-term creditors, such as bankers and suppliers, for they are able to access liquidity of the company. There are four ratios that can be used to determine the company’s short-term debt-paying ability. These are: current ratio, acid test, receivables turnover, and inventory turnover. This essay brings the current ratio for Coca Cola and PepsiCo. For the year 2005.
Current Ratio for Coca-Cola Company 2005
Current Assets 10,250 divided by Current Liabilities 9,836 = 1.04 (2)
There is for Coca-Cola, 1.04 dollars of Current assets for every dollar of current liabilities. Current Ratio for PepsiCo. Inc. 2005
Current Assets 10,454 divided by Current Liabilities 9,406 = 1.11 (2)
There are for PepsiCo, 1.11 dollars of Current assets for every dollar of current liabilities. Solvency Ratios measures the ability of a company to survive over a long period of time (1). This ratio is particularly attractive to long-term creditors and stockholders. There are two ratios that deliver information about the company’s
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