ACC280
week 7 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
TUTORIAL PREVIEW
Write in 100 to 200 words an
explanation of the three tools of financial statement analysis and the function
of each.
Financial statement analysis is the application of
analytical tools and techniques to general-purpose financial statements and
related data to derive estimates and inferences useful in business
analysis. The three tools of financial
statement analysis are:
1.
Horizontal
Analysis
2.
Vertical
Analysis
3.
Ratio
Analysis
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