XACC 280
Axia College of University of Phoenix (UoP)
Financial Accounting Concepts and Principles
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.
XACC 280 Week 7 Solution
4. CheckPoint: Ratio, Vertical and Horizontal Analysis
The calculations you perform for this CheckPoint form the basis of your analysis of your capstone project.
• Write an essay in 250 to 300 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:
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
• 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.
• Post your explanation and calculations.
• Due Date: Day 3 [post to your Individual forum]
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