Review the annual reports for PepsiCo, Inc. and The Coca-Cola Company in Appendixes A & B, especially the Consolidated Statements of Income and the Balance Sheets on pp. A4, A6, B1, & B2 of Financial Accounting. Write a 1750- to 2,050-word paper in APA format with citations and references that provides a financial comparison of the two companies and your recommendations to improve the financial status of each. Include the following: · An introductory paragraph with a statement of the purpose of your paper and a synopsis of what readers may expect to find in the paper – It is best to write this after writing the rest of the paper. · Vertical analyses for both companies – You may use your calculations from the Checkpoint Ratio, Vertical, and Horizontal Analyses, providing you show your work. · Horizontal analyses for both companies – You may use your calculations from the Checkpoint Ratio, Vertical, and Horizontal Analyses, providing you show your work.
Ratio Analysis, vertical and horizontal analysis are the three tools of a financial statement. Also known as a trend analysis, horizontal analysis assesses a series of financial statement data over a time period. Common size analysis and vertical analysis are essentially the same thing. Vertical analysis is used to gauge financial statement data. It does this by expressing each item in a financial statement as a percent of base amount. The second tool of financial statement analysis is ratio analysis. A ratio analysis expresses the connection among designated items of financial data.