Xacc 280 Financial Statement Analysis

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The three of financial statement analysis are horizontal analysis, vertical analysis, and ratio analysis. The function of all three analyses is to evaluate the significance of financial statements data. Horizontal analysis function is to evaluate and compare data given by the financial statement for at least two years with in its own company. Vertical analysis expresses the amounts of the financial statements as a percentage from the amounts given on the financial statements. Vertical analysis also makes it so that companies can compare how they are doing with competing companies. Ratio analysis is used to evaluate liquidity, profitability, and solvency. PepsiCo. Calculations:

Ratio:
2005 Current Ratio: 1.11:1 10,454/9,406=1.1114
2004 Current Ratio: 1.28:1 8,639/6,752=1.2794
Vertical Analysis:
2005 current assets 10,454 / total assets 31,727=0.3294 or 32.9% 2004 current assets 8,639 / total assets 27,987=.3086 or 30.7% Horizontal Analysis:
Assets increased in 2005 by 13%
Total assets 2005 31,727-total assets 2004 27,987=3740/ 27,987=.133 or 13% Liabilities increased by 21%
Total liability 2005 17,476-total liability 2004 14,464=3012/14,464=.208 or 21%

Coca-Cola Calculations:
Ratios:
Current Ratio for 2005 1.04:1 10,250/9,836=1.042
Current Ratio for 2004 1.10:1 12,281/11,133=1.103
Vertical Analysis:
2005 Current Assets 10,250/total assets 29,427=.348 or 35%
2004 current assets 12,281/total assets 31,441=.390 or 39%
Horizontal Analysis:

Current assets decreased by 17%
Current assets in 2005 10,250-current assets 2004 12,281=-2031/current assets 2004 12,281=-.165 or -17% Current liability decreased by 12% in 2005
Current liability in 2005 9,836- current liability in 2004 11,133=-1297/current liability in 2004 11,133=-.116 or 12%

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