You have been requested by your CFO to find a suitable available-for-sale security for your company to purchase. She would like you to analyze two companies and determine which one would make the better investment.
Select two publicly traded companies whose businesses are similar. Some examples might be Walmart and Target; Chico’s and Sacks Fifth Avenue; General Mills and Kraft Food. Select companies in which you have some personal interest.
Locate the most recently released annual reports of both entities. They should be the same year.
Using this financial information, please complete the following:
• Horizontal analysis of the 2 most recent years for the balance sheets and the income statements for each company
• Comparison of the results of the horizontal analyses of the two companies
• Vertical analysis of the balance sheets and income statements producing common-size percents for the current year
• Comparison of the results of the vertical analyses of the two companies
• Ratio analysis for the current year of your 2 companies using 4 liquidity and efficiency ratios, 2 solvency ratios, 4 profitability ratios, and the price-earnings ratio
Prepare a report for your CFO presenting these analyses and a comparative chart of your ratios. Your report should include a discussion of both companies and their strengths and weaknesses. You must present your recommendation of which stock to purchase which includes a well reasoned argument for that purchase. Use the results of your horizontal and vertical analyses as well as your ratio results to support your decision.
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The SWOT analysis is done to understand the internal condition of the Coke so as to understand its strategic framework and the extent with which it is using it for its expansion and prosperity.
The valuable human resource is the greatest strength for any company. One of the reasons for the success of Pepsi in USA as well as other markets is its reliance on valuable human resource. Also they possess licenses to open branches of its brand in other key markets and developing nations such as china, India etc.Both the brands have great brand name all across the world.
The innovation in delivery of services as well as product development is the two major factors where Pepsi lacks behind Coke. The reason for this is the less use of technology in the fields of logistic segments and operations. Also great loses were made while researching for inorganic route of expansion.
The developing economies like India and China provide great opportunities for these companies. The market can also be tapped by the launching innovative and modern products depending upon the taste of the local customers and their preferences. A huge pressure is been faced by Pepsi as the customers have high expectations for the supply of health drinks as well as carbonated beverages. As a result there are large opportunities to adopt socially to make its supply chain innovative so that needs of the customers are fulfilled.
The changing political landscape and policies of developing countries as well as the slowdown in the major economies poses the biggest threat to Pepsi. Also Coke gives a tough competition to Pepsi in the global market. Besides these, the high inflation makes it difficult to decrease costs further and to improves profitability....
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