Finals Project - Financial Analysis of Pepsi Co. and Coca-Cola
Submitted by: Lataikeii Evans
Date: April 8, 2011
Arbitrating a company’s monetary physical stability inculpate their financial statements (income statements, balance sheets, and statement of cash flow). These statements must follow the GAAP standards. Sidewise from the statements that are involved in balancing a company or in my case comparing the financial stability of the two successful companies’ three components are involved. The profitability, liquidity, and solvency are the three factors or components used in the analytical process of determining the success or nonsuccesses of a company.
Understanding of the valuable components of …show more content…
Not only did Coca Cola reduce their liabilities but they increased the earnings as well.
Pepsi Co. is financially stable however there is a difference. Pepsi Co. lacks and as a result their financial stability differs from Coca Cola. Below reflect the ratios of Pepsi Co.
As we did in getting the results with Coca Cola we are to utilize the information from the condensed balance sheet in our text books and abstract the data used to find the results.
Calculating the Liquidity Ratios of Pepsi Co.
In determining the value or percentage of the current ratio I will be dividing the current total assets by the current total liabilities as shown below. In determining the many ratios with Pepsi Co. by the ending one will be able to see significant difference in the two and at that point will probably be able to develop their own panorama as to why Pepsi Co. is drastically behind Coca-Cola’s financial status.
Current Ratio (2005)
10,454 (current total assets) = 1.11
9,406 (current total liabilities)
The same method will be applied to calculate the status of 2004
Current Ratio (2004)
8,639 (current total assets) = 1.28
6,752 (current total liabilities)
If you just went by the current Ratio then Pepsi Co. would be the ideal company to invest in however as we get the following results/calculations of the other areas of Pepsi Co. then you will then see why ultimately Coca Cola was