# GF 530 Purdue Global University Coca Cola Company Project

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GF 530

Purdue Global University

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Assignment 2 Final Project: Calculate the Ratios - Coke Cola is the selected company

• Using the list from the back of your textbook, select 2–3 ratios from each of the following 6 diagnostic financial performance categories
• Short-term liquidity
• Capital structure and solvency
• Return on invested capital
• Asset turnover (utilization)
• Operating performance and profitability
• Financial market measures
• Using the ratios you select, gather the information you need to calculate the ratios from your selected company’s 10-K or annual report.
• Calculate the ratios for your company, the industry and a competitor. Review an example of the ratio chart. The ratio chart will be used as a basis for the project for your conclusion of whether in your opinion, with the ratios as your basis, the company is doing well or not.
Submit a Word document with your calculated ratios. Once completed, submit your Assignment to the Unit 3 Assignment 2 Dropbox. Assignments are due Tuesday 11:59 p.m. ET of their assigned unit.

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Running head: COCA-COLA COMPANY RATIO ANALYSIS
1

Unit 2 Assignment 3

Coca Cola Company
Rhonda R Littles
Purdue University Global
Dr. William Hudson
July 6, 2020

COCA-COLA COMPANY RATIO ANALYSIS
2

Introduction
The report presents a detailed financial analysis of Coca-Cola Company with the help of
financial ratios for the year 2019. The key areas of focus for ratio analysis were short-term
liquidity, capital structure and solvency, Return on invested capital, Asset turnover, operating
performance and profitability, and Financial market measures. The ratios of Coca-Cola company
were compared with its competitor PepsiCo and the industry averages to understand the relative
performance of the company in 2019. The ratios for the company along with the ratios of
PepsiCo and the industry are presented in the ratio chart in Appendix A.

Short-term Liquidity
The short-term liquidity measures the ability of a company to manage its short-term
obligations with its current assets. Short-term liquidity is a key area to understand how well a
company is managing its working capital and also provides insights into whether a company
could face potential issues in running its operations due to liquidity challenges.
The current ratio of Coca-Cola company in 2019 was 0.76 compared to PepsiCo’s 0.86
and the industry average of 1.52 (Dybek, 2020). The current ratio measures the ability of a
company to pay its current liabilities using its current assets.
The quick ratio measures the ability of a company to pay its short-term obligations using
current assets excluding inventory. The quick ratio of Coca-Cola company in 2019 was 0.63
compared to PepsiCo’s 0.70 and industry average of 0.76 (Dybek, 2020).
Thus, the company’s short-term liquidity position is weaker compared to its competitor
PepsiCo and the industry as a whole.

COC...

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