Accounting Homework–Week 9



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.

Construct a 1,750- to 2,050-word paper in which you provide a comprehensive analysis of the financial health of two companies, compare the companies, and make recommendations to improve the financial status of each. The paper, with citations and references, must follow APA formatting guidelines.

The paper will include the following:

An introductory paragraph with:
o A statement of the purpose of your paper.
o A synopsis of what readers can expect to find in the paper. It is best to write this after writing the rest of the paper.
Vertical analyses for both companies. PLEASE show your work.
Horizontal analyses for both companies. PLEASE show your work.
Ratio analyses for both companies, including a test of:
o Liquidity. You can use the Current Ratio you compute in the Checkpoint Ratio,
Vertical, and Horizontal Analyses, and another ratio. Show your work.
o Solvency. Use at least two ratios and show your work.
o Profitability. Use at least two ratios and show your work.

• An explanation of which company appears to be more financially sound:
o Each company might have strengths in different areas. Be sure to distinguish these areas; for example, one might have greater liquidity, while the other more solvency.
o Point to the data for each comparison you make.

• At least three recommendations you can make, within the context of law and ethics, so each company can improve its financial health.
A concluding paragraph that summarizes what you did, what you found, and what you recommend.

• As you compare the two companies, you might find it beneficial to use a table or a spreadsheet with columns for each company, so the reader can easily compare their ratios by looking across a row. Discuss your findings in a brief narrative, then move on to the next part of your analysis using a similar table or a spreadsheet and an explanation.


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