Checkpoint: Ratio, Vertical, and Horizontal Analysis In Tutorial Library

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TITLE: Checkpoint: Ratio, Vertical, and Horizontal Analysis

CLASS / COURSE: ACC280

QUESTION DESCRIPTION:

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:

 

o    The Current Ratio for 2005

o    The Current Ratio for 2004

o    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

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

 

·         Examine The Coca-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:

 

o    The Current Ratio for 2005

o    The Current Ratio for 2004

o    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

o    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

 

·         Post your explanation and calculations.

 

Please see attachment for Appendix A Page A6 for the PepsiCo, Inc.'s cosolidated balance sheet

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SUBJECTS / CATEGORIES:
1. Finance
2. Financial Management
3. Accounting
4. Corporate Finance
5. Investment and Portfolio Management

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