Week5 final
Write a five- to seven-page comparative financial statement analysis of the three companies
listed below, formatted according to APA style as outlined in the UAGC Writing Center. In this
analysis, you will discuss the financial health of these companies with the ultimate goal of
making a recommendation to other investors. Your paper should consist of the following
sections: Company Overview, Comparison of Accounting Methods, Ratio Analysis, Final
Recommendation, Conclusions. You will also submit an appendix as a separate document.
Additional research may be necessary to provide company background information, or to
support your analysis and recommendations. Your paper needs to include a minimum of two
scholarly, peer-reviewed, and/or credible resources in addition to the textbook as references.
Download the Form 10-K for each company.
• The Coca-Cola Company: Form 10-K (Links to an external site.) – Financial statements and
notes start on page 60.
•
o Accounts receivable, page 81
o Inventories, page 82
o Depreciation, page 96
o Goodwill, page 83
• Keurig Dr Pepper Annual Report (Links to an external site.)
•
o Click on the 2018 Annual Report
o Accounts receivable, page 72
o Inventories, page 72
o Depreciation, page 73
o Goodwill, page 74
• PepsiCo Annual Report (Links to an external site.) – Financial statements and notes start
on page 79.
•
o Accounts receivable, page 124
o Inventories, page 89
o Depreciation, page 95
o Goodwill, page 88
Here is a breakdown of the sections within the body of the assignment (Use paragraph
headings to indicate each section):
Company Overview
Provide a brief overview of the three companies (at least two pages). What industry is it in?
What are its main products or services? Who are its competitors? Where is the company
located?
Ratio Analysis
• Calculate the current ratio, quick ratio, gross profit percentage, inventory turnover,
accounts receivable turnover and asset turnover ratios for all three companies for the
current year.
• Note: Cash includes cash and cash equivalents and short term investments.
• Explain how the ratio is calculated and discuss and interpret the ratios that you
calculated.
• Discuss potential liquidity issues based on your calculations of the current and quick
ratios.
• Are there any factors that could be erroneously influencing the results of the ratios?
• Discuss liquidity issues of the three companies.
Comparison of Accounting Methods
In your paper, ascertain from the notes of the financial statements the following:
• Explain the difference between the allowance method and the direct write off method
for accounts receivable. Document the method used for each of the three companies.
• Explain the difference between the straight line, double declining balance and the unitof-production depreciation methods. Document the method used for each of the three
companies.
• Explain the difference between LIFO and FIFO and document the method used for each
of the three companies.
• Explain the different categories of intangible assets and document the method used for
each of the three companies.
Recommendation
Based on your analysis, would you recommend an individual invest in these companies?
What strengths do you see? What risks do you see? It is perfectly acceptable to state that you
would recommend avoiding this company, as long as you provide support for your position.
Conclusions
Include an appendix in a separate document. The appendix must include screenshots of the
financial statements and information obtained for the receivables, intangible assets,
depreciation, and inventory. You can get help with creating an appendix in APA format by using
the UAGC Writing Center’s guide, Tables, Images, & Appendices (Links to an external site.).
The Financial Statement Analysis Final Paper
• Must be five to seven double-spaced pages in length (not including title and references
pages) and formatted according to APA style as outlined in the UAGC Writing Center’s
APA Style. (Links to an external site.)
• Must include a separate title page with the following:
• Title of paper
• Student’s name
• Course name and number
• Instructor’s name
• Date submitted
For further assistance with the formatting and the title page, refer to APA Formatting for Word
2013 (Links to an external site.).
• Must utilize academic voice. See the Academic Voice (Links to an external site.) resource
for additional guidance.
• Must include an introduction and conclusion paragraph. Your introduction paragraph
needs to end with a clear thesis statement that indicates the purpose of your paper.
• For assistance on writing Introductions & Conclusions (Links to an external site.) as well
as Writing a Thesis Statement (Links to an external site.), refer to the UAGC Writing
Center resources.
• Must use at least two scholarly/peer-reviewed and/or credible resources in addition to
the course text.
• The Scholarly, Peer-Reviewed, and Other Credible Sources (Links to an external site.)
table offers additional guidance on appropriate source types. If you have questions
about whether a specific source is appropriate for this assignment, please contact your
instructor. Your instructor has the final say about the appropriateness of a specific
source for a particular assignment.
• Must document any information used from sources in APA style as outlined in the UAGC
Writing Center’s Citing Within Your Paper (Links to an external site.)
• Must include a separate references page that is formatted according to APA style as
outlined in the UAGC Writing Center. See the Formatting Your References List (Links to
an external site.) resource in the UAGC Writing Center for specifications.
