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Horizontal Trend Analysis of Coca Cola Income and Balance Statement

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1. Do trend analysis of the following income statement and balance sheet items over the last five-year period:

Income Statement
Sales, Cost of Sales (Cost of Goods Sold), Gross Margin (Gross Profit), Operating Income (income from continuing operations, combined foreign and domestic).

Balance Sheet
Cash, Accounts (Trade) Receivables, Inventories, Working Capital, Total Current Assets, Total Assets, Total Current Liabilities, Total Long Term Liabilities and Current Liabilities Combined.

2. Calculate the ratios outlined in Exhibit 15-6 for the 2011 year only.

3. Prepare a report that includes the following: (1) a brief discussion of the trend analysis of the income statement, (2) a brief discussion of the trend analysis of the balance sheet, (3) a brief discussion of the ratios you have computed, including a comparison with industry averages. Include who would be most interested in each ratio (common stockholders, short-term creditors, and/or long-term creditors). Include all calculations.

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Financial Statement Analysis: Coca Cola, Google and Yahoo!

You will be using financial statements to answer the following questions.

1. Choose any three publicly traded companies as long as you have at least one company that deals with a product and at least one company that deals with a service.

2. Next, go to the web site of each company and find their annual report to shareholders. You will generally find this in "investor" or "shareholder" information. You may need to dig in by several layers before you come to financial statements. If the company has a search feature on its web site, enter "annual report."

3. For each company answer these questions: How much cash is available for the company to pay its current debts? Is the company in trouble or in good shape? [Hint: compare Current Assets with Current Liabilities. Assume that all Current Assets will be converted into cash before all of the Current Liabilities become due.] You will need to provide supporting details such as numbers from the financial statements.

4. Is each company increasing or decreasing its investment in its operations. [Hint: look at "Cash Flow from Investing Activities on the Statement of Cash Flows. Then note the change in Non-Current Assets on the Balance Sheet from one year to the next.]

5. How well is each company doing in its operations? [Hint: Look at the three year trend in Net Income on the Income Statement and at Cash Flow from Operating Activities on the Statement of Cash Flows.]

6. Finally, based on your answers to the above questions, give each of the presidents of your companies a letter grade (A, B, etc) for his/her performance over the most recent year reported in the financial statements. Explain your grade.

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