Xacc280 Financial Analysis - 1834 Words

Week 9 Final Assignment: Financial Analysis Korina Mitchell XACC280/Financial Accounting Concepts and Principles July 10, 2010 Tonya Brewer The Coca-Cola company has been in business since its inventor began selling it in drug stores in 1886 (The Coca-Cola Company, 2009). Pepsi-Cola was invented a short time later in 1898, but at the time it was called â€Å"Brad’s drink.† It was later renamed Pepsi-Cola in 1902 (Butler, 2006). Since those early days when the sodas were invented, Coca-Cola and Pepsi have been in competition with each other for the domination of the world’s soda market. Over the course of more than a century, sales have continued to rise for both companies, and they both consistently earn a profit. Both companies†¦show more content†¦This might make both of these companies more attractive to potential creditors and investors. Comparison of Solvency through Total Debt to Total Assets Calculations In addition to knowing the liquidity of the companies, investors may also want to know how solvent each of the companies will be for the long term. The quickest way to measure their solvency is to divide the companies’ total assets by their total liabilities. In the case of PepsiCo, their debt to asset percentage in 2004 was 51.68%, and in 2005 that number increased to 55.08%. Coca-Cola had a similar debt to asset percentage of 50.68% in 2004, and in 2005 their percentage was 55.57%. This means that both companies were competitive in this comparison, although both actually increased their debt percentage slightly. Neither of the two companies had a drastic change, however, so investors may only be mildly concerned with this difference. Additional information about the debt that was incurred might be requested for a potential investor to make an informed decision about which company would provide a be tter investment. Comparison of Retained Earnings through Vertical Analysis One last thing that investors might want to know about PepsiCo and Coca-Cola is what percentage of the income is being retained and reinvested in each company. This information is calculated by determining theShow MoreRelatedFinancial Analysis Xacc280 Final Project1784 Words   |  8 PagesFinancial Analysis/ Final Project XACC/280 Eden Lord Financial Analysis, Final Project Based upon my knowledge learned on financial reporting, I had compared to companies reporting statistics. The two companies in comparison are PepsiCo Incorperated and The Coca-Cola Company in which both have reported annual statistics for 2004 and 2005. During my comparison of net incomes, gross expenses, stock statistics, and assets accumulations, I have suggested some strategies for each business to take intoRead MoreXacc280 Week 9 Financial Analysis1923 Words   |  8 PagesFinancial Analysis Your Name Here XACC 280 Instructor’s Name Introduction: Pepsi Co. and Coca Cola, both are very well known multinational companies. They are so famous that they perhaps don’t need any introduction since almost everyone knows basic info about these companies and their widely used products. Both of these companies have been dealing in the production of flavored waters, plain drinking water and soft drinks for decades nowRead MoreHorizontal and Vertical Analysis1820 Words   |  8 PagesFinancial Analysis XACC280 June 28, 2012 Accounting is the way all companies keep track of their out-going and in-coming finances. Applying accounting principles in any business is incredibly important because it allows for the least amount of mistakes and gives a comprehensive view of all transactions. There are many tools used in accounting, each with it’s own unique function. Statements are used to show a specific time period’s overview of assets, liabilities, and all transactions