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Acc 280 Week 7 Checkpoint Ratio, Vertical, and Horizontal Analysis Check Point

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Acc 280 Week 7 Checkpoint Ratio, Vertical, and Horizontal
Analysis Check Point
Principles of Accounting
Ratio, Vertical, and Horizontal Analysis Check Point
The three vital tools of financial statements are the ratio, vertical, and
horizontal analysis. Each financial statement examines the data within
monetary statements of businesses or organizations. Being able to
determine the financial stability of a company is important in addressing
any areas of weakness or aide in the decision making processes.
Ratio analysis is associated with evaluating the liquidity, profitability, and
solvency of a corporation to judge performance scenarios. Vertical
analysis gauges entries for assets, liabilities, and equities in a balance
sheet to compare the proportions of the total account. It enables any
size of a business the opportunity to easily compare relative annual
changes. Horizontal analysis allows companies to compare performance
ratios over a certain period of time, usually one year’s worth of entries. It
is also referred to as trend analysis and offers insight into the overall
success of a company in order to make sound investments. These types
of ratios are able to be used on any item of finance from revenues to
earnings within a company.
PepsiCo, Inc.
The Current Ratio for 2005 is Current Assets 10,454/ Current Liabilities
9,406 which equals 1.11%.
The Current Ratio for 2004 is Current Assets 8,639/ Current Liabilities
6,752 which equals 1.28%.
Two measures of vertical analysis are:
Vertical Analysis of 2005- Total Current Assets at 10,454 divided by Total
Assets at 31, 727 equals 33%.

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Vertical Analysis of 2004- Total Current Assets at 8,639 divided by Total
Assets at 27, 987 equals 31%.
Two Measures of Horizontal Analysis are:
Horizontal Analysis #1- Current Assets of 2005 at 10,454 divided by
Current Assets in 2004 at 8,639 equals 1.21% total change in assets by
percentage.
Horizontal Analysis #2- Total Current Liabilities of 2005 at 9,406 divided
by Total Current Liabilities of 2004 at 6,752 equals 1.39% total change in
liabilities by percentage.
Coca-Cola Company
The Current Ratio for 2005 is Current Assets 10,250/ Current Liabilities
9,836 which equals 1.04%.
The Current Ratio for 2004 is Current Assets 12,281/ Current Liabilities
11,133 which equals 1.10%.
Two measures of vertical analysis are:
Vertical Analysis of 2005- Total Current Assets at 10,250 divided by Total
Assets at 29,427 equals 0.35%.
Vertical Analysis of 2004- Total Current Assets at 12,281 divided by Total
Assets at 31,441 equals 0.39%.

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Acc 280 Week 7 Checkpoint Ratio, Vertical, and Horizontal Analysis Check Point Principles of Accounting Ratio, Vertical, and Horizontal Analysis Check Point The three vital tools of financial statements are the ratio, vertical, and horizontal analysis. Each financial statement examines the data within monetary statements of businesses or organizations. Being able to determine the financial stability of a company is important in addressing any areas of weakness or aide in the decision making processes. Ratio analysis is associated with evaluating the liquidity, profitability, and solvency of a corporation to judge performance scenarios. Vertical analysis gauges entries for assets, liabilities, and equities in a balance sheet to compare the proportions of the total account. It enables any size of a business the opportunity to easily compare relative annual changes. Horizontal analysis al ...
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