ACC280 week7 Checkpoint

ACC280 week7 Checkpoint

CheckPoint

Ratio, Vertical, and Horizontal Analyses

The calculations you perform for this Check Point form the basis of your analysis of your capstone project.

Write in 100 to 200 words an explanation of the three tools of financial statement analysis and the function of each.

Examine PepsiCo, Inc.’s Consolidated Balance Sheet on p. A6 in Appendix A of Financial Accounting, especially its Current Assets, Current Liabilities, and Total Assets for years 2005 and 2004.

Calculate the following for PepsiCo, Inc. and show your work:

The Current Ratio for 2005

The Current Ratio for 2004

Two measures of vertical analysis—for example, compute the current assets divided by total assets for each year, and express your result as a percentage

Two measures of horizontal analysis—for example, compute the total change in assets by percentage, by dividing current assets in 2005 by current assets in 2004. Compute a similar percentage for current liabilities

Examine TheCoca-Cola Company’s Consolidated Balance sheet on p. B2 in Appendix B of Financial Accounting, especially its Current Assets, Current Liabilities, and Total Assets for years 2005 and 2004.

Calculate the following for Coca-Cola and show your work:

The Current Ratio for 2005

The Current Ratio for 2004

Two measures of vertical analysis—for example, compute the current assets divided by total assets for each year, and express your result as a percentage

Two measures of horizontal analysis—for example, compute the total change in assets by percentage, by dividing current assets in 2005 by current assets in 2004. Compute a similar percentage for current liabilities