Abstract
Financial analysis is a way to evaluate the result of a company. This method provides a kind of transparency and objectivity from companies to their partners, for example, as their shareholders. Indeed, financial analyzing statement is a reference to decision makers as well as internal management team than external direct or indirect financial investors. In this case, we will focus on Coca Cola company and PepsiCo financial situation. Indeed, it is interesting to work on the comparison of these both competitors because our analysis enables to show ways in which the first firm situation deviates from the other.
This financial analysis is possible thanks to minor differences between Coca cola and Pepsi cola in their accounting methods. It is the reason why the financial analysis can be relevant. This method uses tools commonly named ratio. There are four performance measures: liquidity, solvency profitability and market measures.
The objective of the ratio analysis is to give an overview on a financial situation. This method standardizes financial information by using percentage instead of raw number for instance. Percentage is used to facilitate evaluation and comparison of various operations. Indeed, it is allows us to enhance number proportionately of the both companies in order to evaluate their results. In order to have results, each company has some resources also called assets. Changing these resources into profits is the goal of a company.
