Financial Analysis of Coca-Cola and PepsiCo
Locate the Critical Thinking CT 10.4 problem at the end of Chapter 10 in the textbook. This will serve as the structure for your assignment. Begin by choosing two competing publicly traded companies from the list below.
Coca-Cola and PepsiCo
Walmart and Target
Nike and Adidas
For the pair of companies selected, you will need to use each company’s stock symbol to locate the liquidity, solvency, and profitability ratios on the MSN Money website. As part of your research, you will need to identify each company’s stock symbol for the American market.
Review the competing companies’ ratios provided at the MSN Money website in the topic resources. Navigate to My Watchlist and enter the name of the company in the Quote Search. Identify and select the correct stock symbol.
Under the “Analysis” heading, use the Growth, Profitability, Price Ratios, Financial Health, Trading Statistics, and Management Effectiveness information to complete a 750-1,000 word comparison addressing the following:
Evaluate each company’s liquidity relative to its competitor using at least three ratios
Evaluate each company’s solvency relative to its competitor using at least two ratios
Evaluate each company’s profitability relative to its competitor using at least three ratios
Note: You will be assessed on your ability to evaluate each company’s performance based on the information provided at MSN Money. You do not need to calculate the ratios for individual companies or the industry averages.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center.
Financial Analysis
Author
Affiliation
Course
Instructor
Due Date
Financial Analysis
Metrics that are obtained from numerical values that are derived from financial statements are known as financial ratios. With these ratios, users can discover valuable details about a company. Quantitative analysis and evaluation of a company's liquidity, leverage, profitability, and market valuation require using the financial figures on a company's financial statements. The following ratio reveals a comparative performance between Coca-Cola Company and PepsiCo;
liquidity Ratios
COCA-COLA CO (KO)
PEPSICO INC (PEP)
Industry
Quick Ratio
0.98
0.68
0.95
Current Ratio
1.18
0.87
1.35
LT Debt to Equity
149.13%
190.03%
143.92
Solvency Ratios
Total Debt to Equity
167.84%
220.03%
160.07
Leverage Ratio
3.79
5.11
2.63
Profitability ratios
Return on Equity %
45.61
64.42
Return on Assets %
11.24
11.24
Net Profit Margin %
25.36
9.9
Table1.1: financial ratios
The Coca-Cola Company is the industry leader in nonalcoholic beverages. The company produces, markets, and sells a wide range of nonalcoholic beverages, including energy drinks, tea and coffee carbonated soft drinks, water, dairy, plant-based beverages, and juice. Coca-Cola Company trades in the New York Stock Exchange market (NYSE) with the symbol ticker of 'KO .'On the other hand, PepsiCo, Inc. is an American multinational corporation that specializes in the production of food, snacks, and beverages. Its headquarters can be found in the hamlet of Purchase in Harrison, New York. PepsiCo's business encompasses every facet of the food and beverage industry, and it is responsible for the manufacturing, distribution, and marketing of the company's various products. PepsiCo, Inc is traded in the NASDAQ and NYSE exchange markets under the' PEP' ticker symbol. Therefore, both PepsiCo and Coca-Cola operate and compete in the same market.
Liquidity ratios show a company's ability to quickly convert its current assets into cash. Therefore, a highly liquid company is less likely...
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