Financial Analyisis

Financial Analyisis - Financial Statement Analysis of Pepsi...

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Financial Statement Analysis of Pepsi and Coca cola By Robert McCain 11 March 2011
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McCain 2 Abstract Purpose of Project Financial analysis provides the clear view and picture of the performance parameters of an organization. It helps in analyzing and comparing the present as well past performance. This analysis is an important tool for the management, investors as well as the outsiders who deal with organization. This analysis shows the way of functioning and the direction in which an organization is moving. The main objective of the project is to determine the clear picture of the Pepsi Co.’s performance. The comparison of past and present performance of the company will help to understand the company’s efficiency level, which will help in estimating the firm’s financial weakness and strength. The analysis is done with the help of common size analysis, comparative analysis of firm’s last two year’s financial performance. This project also analyses and compares the financial ratios of Pepsi co. and Coca cola along with the industry standards. The analysis is done with the help of respective annual reports of the companies. Financial Statements used are: Consolidated balance sheet and income statement for the fiscal year 2005 and 2004. Techniques used in the report are: Common size analysis, Comparative analysis, trend analysis and ratio analysis. Major Findings Pepsi Co. has a sound financial performance in comparison to Coca cola. Analytical Section
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McCain 3 Financial statement information is a useful tool which is used by both external and internal users, including investors, creditors, managers, and executives. These reports are analyzed in order to make business decisions, investment decisions and other important financial decision. It also helps in analyzing and determining the significant operating and financial characteristics of a firm and evaluating the past, present and projected performance of the firm. Thus, understanding these financial statements plays an important role. Several methods of analyzing the financial statements are used. This section of the report brings into the picture the financial analysis of Pepsi Co. and coca cola on the basis of common size analysis and Comparative analysis for two years. It also analysis and compares the financial ratios of Pepsi Co. and Coca cola for two years. Common Size Analysis Common size analysis helps in finding out the proportion that single item represents to the total group or a sub group. In this the items are expressed as percentages of particular item in respect of the main item taken into consideration. Common Size balance sheet In a common size balance sheet, total of assets or liabilities is taken as 100 and all the figures are expressed as percentage of the total. Comparative common size balance sheets for different financial periods help to highlight the trends in different items over the past years. Interpretation
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This note was uploaded on 04/11/2011 for the course ACC 305 taught by Professor Allison during the Spring '11 term at Western Intl..

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Financial Analyisis - Financial Statement Analysis of Pepsi...

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