n order for a company to be financially healthy, it is of most
importance that the company must analyze, interpret, and review the
business’s annual financial reports. The financial analyses of the
annual reports provide insights and information regarding the
performances of the business. In this paper, I will be disclosing
financial evaluations and comparisons between Coca-Coca and PepsiCo
Incorporation. The visualizations used in this paper were designed to
provide the analyses performed utilizing three financial analyses
methods: vertical analysis, horizontal analysis, and ratios analysis.
There will also be recommendations made on how Coke and Pepsi could
improve their financial status. Vertical Analysis-Pepsi and Coke
The vertical analysis of the financial statements compares financial data including assets, liabilities, and equity on a yearly basis. A vertical analysis is used most frequently to monitor annual changes. One of the biggest benefits of a vertical analysis is if gives a company the ability to evaluate the comparison between the total net sales and the cost of goods sold. Illustration 1 shows vertical analyses for 2004 and 2005 (select financial data) for Coca-Cola and PepsiCo, Inc. performances. Illustration 1-Vertical Analyses of Coca-Cola and PepsiCo, Inc. for 2004 and 2005 Coca-Cola Consolidated Balance Sheets
Current Assets 10,250 34.83% 12,281 39.06% Inventory 1,424 4.84% 1,420 4.52% Accounts Receivable 2,281 7.75% 2,244 7.14% Non-current Assets 15,517 52.73% 15,496 49.29% Total Assets 29,427 100.00% 31,441 100.00% Current Liabilities 9,836 33.43% 11,133 35.41% Non-current Liabilities 3,236 11.00% 4,373 13.91% Total Liabilities 13,072 44.42% 15,506 49.32% Total Stockholders' Equity.
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