Final Project Assignment
FINAL PROJECT 2
Keeping good records is a key in any good business and it helps companies find key areas where they feel they can improve. Coke and Pepsi are two large named soda distributers that have been along for many years and are constantly being compared. Before obtaining both companies financial statements, I was kind of clueless in who was more financially set but knew both were respectable companies. In this essay, I am going to compare the two companies giving you a complete analysis of each regarding the health and future of the company, along with possible improvements that could be made to improve the company. I am going to compare these companies by taking the financial record sheets and using them to do different ratios and analysis that will help support my decisions. At the end of the essay I feel you will understand why I feel the way I do and why I feel which company will have the most long term success.
The first analysis that will help us understand more about these two companies is the Vertical analysis. According to the textbook “ Vertical analysis evaluates financial statement data by expressing each item in a financial statement as a percent of a base amount”(Weygandt and Kimmel 2008 p.699). When you want to complete a vertical analysis you will take the base amount of an item on the financial statement and take an item that makes up part of that item and divide them to find the percentage of the item it is. The first vertical analysis I will perform will calculate what percent of the company’s current assets make up their total assets in both 2004 and 2005 for both companies. The current assets in 2004 for the Pepsi company had $8,639...