Xacc 280 Week 9 Final

1602 words 7 pages
Coca-Cola VS. PepsiCo
Elizabeth Hendley
September 4th 2011
Charmaine Arjoon- Ramjattan, Ph.D

Coca-Cola VS. PepsiCo
When determining which company has the most to offer it is necessary to look at each set of numbers from several different views. For instance this paper will cover vertical and horizontal analysis, profitability, solvency, and liquidity ratios. I will be explaining how each set of results play into the decision making of which company would be best to invest in, by comparing both companies numbers in able to collect the necessary data to make a calculated decision.
Coca-Cola and PepsiCo have been in competition since day one, each have a very profitable company. When running the number through and
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The current ratio is a financial ratio that helps determine whether or not a company has enough resources to pay its debts over the next year, to find this amount we need to divide the current assets by the current liabilities.
After reviewing the liquidity ratios for both companies I then started to look for the solvency ratios, to find the debt to total assets ratio for Coca-Cola’s 2004 year you must take the total debt, both current and long term debt, and divide it by the total assets, so for Coca-Cola in 2004 the total debts were $15,104.00, then we divide that amount by the total assets which for 2004 were $31,441.00, the percentage of debt to total assets ratio is 48.0%. For the same company but for the year 2005 I did the same thing, I took the total debt, $12,720.00, and divided it by the total assets, $29,427.00 finding that the debt to total assets ratio for 2005 was 43.2%. Using the same formula to find the debt to total assets ratio for PepsiCo, for year 2004 the total debt amount was $14,464.00 dividing this number by the total assets, $27,987.00, finding that the debt to total assets ratio is 51%. For the same company but year 2005 the total debt was $17,476.00 divided by the total assets, $31,727 finding the debt


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