# CheckPoint: Ratio, Vertical, and Horizontal Analysis The calculations you perform for this CheckPoint form the basis of your analysis of your capstone project. • Write in 100 to 200 words

CheckPoint: Ratio, Vertical, and Horizontal Analysis The calculations you perform for this CheckPoint form the basis of your analysis of your capstone project. • Write in 100 to 200 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. • Calculate the following for Coca-Cola 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 • Post your explanation and calculations.