Description
NO PLAGIARISM
FOLLOW INSTRUCTIONS
ORIGINAL THOUGHTS ONLY
Purpose of Assignment
The activity requires students to perform research and analysis on competing companies and the potential implications of international standards. This real-world analysis is key to understanding how a company's profitability, liquidity, and solvency can be useful for all users. Students also learn to analyze financial statements and use managerial tools to make decisions from an investor's and creditor's standpoint.
Assignment Steps
Resources: U.S. Securities and Exchange Commission (SEC), websites such as Annual Reports (AnnualReports.com)
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.
Select two competing companies, one of which must be an international company, and locate annual reports for these two companies on the Internet.
Research the two companies on the Internet and download the Income Statement, Statement of Shareholders' Equity, Balance Sheet, and Statement of Cash Flows.
Develop a minimum 525-word examination of the financial statements and include the following:
- Make a 5-year trend analysis for each company, using 2011 as the base year, of:
- Net sales.
- Net income. Discuss the significance of the trend results.
- Compute for 2015 and 2014 the:
- Debt to assets ratio.
- Times interest earned. How would you evaluate each company's solvency?
- Compute for 2015 and 2014 the:
- Profit margin.
- Asset turnover.
- Return on assets.
- Return on common stockholders' equity. How would you evaluate each company's profitability?
- Evaluate the financial opportunity presented by the companies. If you were a creditor, which company would you be more likely to lend money to? Defend your decision.
- Which company would you recommend as an investment? Discuss the items that were considered in your decision.
- Research global implications for the international company selected. How might changing environmental factors affect organizational choices?
- Consider the ethical climate (internal or external) of your chosen companies. Describe the ethical issues and impact on the stakeholders. What has been/is being done to resolve these issues? Do you agree with these methods for resolution? If not, what might you do differently?
Show your work in Microsoft® Word or Excel®.
Complete calculations/computations using Microsoft® Word or Excel®.
Include the four financial statements along with your assignment.
Format your assignment consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.
Note: Grades are awarded based upon individual contributions to the Learning Team assignment. Each Learning Team member receives a grade based upon his/her contributions to the team assignment. Not all students may receive the same grade for the team assignment.
Explanation & Answer
Attached.
Running Head: TREND ANALYSIS
1
Trend Analysis
Name
Institutional Affiliation
TREND ANALYSIS
2
Introduction
Competition in the soft drink industry has continued to be stiff over the years. The Coca
Cola Company and PepsiCo have engaged in serious trade, marketing and consumer practices
that demonstrate high level competition over the years. This paper provides a five year trend
analysis of the two companies using the year financial year ended 2011 as the basis up to 2015.
The Trend Analysis for Coca Cola (Millions US $)
2011
2012
2013
2014
2015
Calculation of 8,584
9,019
8,584
6,560
7,534
80.2%
103%
75%
110%
7.B
7.6B
112%
114%
net sales
Trend
88.8%
analysis
Percentage
Calculation of
8.5B
8.3B
7.5 B
net income
Calculation of 99.99%
112.00%
110%
trend
percentage
2012 as the basis year
Calculation of
2012
2013
2014
2015
7570
6540
6520
8256
99.99%
121%
143%
163%
10,700
12,700
14,000
16, 300
Net Sales
Calculation of
trend percentage
Net income
calculations
TREND ANALYSIS
Calculation of
3
99.99%
119%
132%
152%
2013
2014
2015
2016
55,500
66,000
75,000
99.99%
119%
135%
12,700
14,100
16,300
99.99%
111%
128%
trend percentage
2013 as the basis year
Calculation of
net sales
Calculation of
trend percentage
Calculation of
net income
Calculation of
trend percentage
The trend analysis for PepsiCo
2011
Calculation of 48,000
2012
2013
2014
2015
61,000
74,400
88,000
107,000
127%
155%
185%
223%
-40
270
-240
600
-6%
43%
-38%
94%
net sales
Calculation of 99.99%
trend
Calculation of 630
net incom...