Financial Analysis Project

Requirements:

You will use the Financial Statements for

coca cola, pepsi, and Keurig Dr. Pepper

as provided on their websites to

complete the following analysis:

1.

Calculate the current ratio and quick ratio for both companies for 2020 and 2021. Write

a paragraph describing what these ratios indicate about the liquidity of

coca cola, pepsi, and Keurig Dr. Pepper in 2020 compared to 2021.

Write a paragraph describing what these ratios indicate

about the liquidity of coke compared to pepsi and Keurig Dr. Pepper for both years. Which company seems to

be more liquid? What are the advantages and disadvantages of liquidity?

2.

Calculate the accounts receivable turnover and days sales in receivables for both

companies for 2020 and 2021. Write a paragraph comparing 2020 with 2021 and coca cola

with Pepsi,and Keurig Dr. Pepper using these three ratios to indicate the effectiveness of their accounts

receivable collection. Which of the three seems to be doing a better job with receivables?

How does this collection process affect the overall success of the company.

3.

Calculate inventory turnover and days in inventory for both companies for 2020 and

2021. Write a paragraph comparing 2020 with 2021 and coca cola with Pepsi and Keurig Dr. Pepper using these

three ratios to indicate how they manage their inventory. Which one of the three companies

has a better approach to inventory management? Why? What are the problems that

come with poor inventory management?

4.

Calculate the gross margin, profit margin and return on investment for both companies

for 2020 and 2021. Explain in a paragraph what these ratios show about each

companys profitability compared to the year before and compared to each other.

Indicate which company shows the best prospects for future profits and explain in detail

why you think the ratios support your observation.

5.

Prepare a vertical analysis or same size income statement and balance sheet for

coca cola with Pepsi,and Keurig Dr. Pepper for 2020 and 2021. Write a paragraph highlighting what you learn from

the percentages of sales or total assets calculated from the financial statements. Write

also about the comparison between 2020 and 2021 and between

coca cola with Pepsi,and Keurig Dr. Pepper

6.

Compare coca cola income statement for 2020 with their income statement for 2021

calculate the change in dollars and percent for all of the revenues and expenses. What

do the changes indicate about Pepsi,and Keurig Dr. Pepper success in 2020 relative to 2021? Do the same

comparison for Pepsi,and Keurig Dr. Pepper income statement. What do the changes indicate about Pepsi,and Keurig Dr. Pepper

improvement or lack thereof between 2020 and 2021? With this comparison of both

companies over time now compare coca cola, Pepsi,and Keurig Dr. Pepper and explain why one company is

better than the other.

7.

Based on all of your calculations and observations described above, make a

recommendation as to which company would be a better investment. Give the reasons

for your conclusion.