Pepsi and Coca-Cola's Horizontal and Vertical Income Statement

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Introduction Financial statement analysis is a tool that allows both internal and external stakeholders to effectively assess a company's financial position. It is most effective when comparing the performance of the same company over time, or when comparing two companies that are similar. The objective is to be able to assess the financial health of the company in question (Harper, 2012). There are a number of different techniques that can be used to conduct financial statement analysis, including ratio analysis, horizontal analysis and vertical analysis. The two that will be used in this paper are horizontal and vertical. Vertical analysis compares the strength of the different line items with the top or bottom line. Horizontal analysis compares the company's performance over multiple time periods. The company's involved in this analysis at Coca-Cola and Pepsi. While both are the two major soft drink manufacturers and marketers in the world, Coke is the smaller of the two companies because soft drinks are its only business. Pepsi also owns Frito-Lay, so that it is more of a diversified snack company. Nevertheless, the two are classic comparables because of the historic rivalry and their status and two of the dominant consumer brands, and dominant producers of non-alcoholic beverages. Coca-Cola Horizontal and Vertical Income Statement Coke 2011 % Change 2011 Vert 2010 % Change 2010 Vert 2009 2009 Vert Revenue 46542 32.53% 100% 35119 13.32% 100% 30990 1 COGS 18216
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