Financial Statement Analysis Report: Profitability Analysis
The purpose of this assignment is to assess a Coca Cola’s profitability by preparing profitability ratios using data from financial statements.
Profitability ratios are critical for assessing a business’s ability to generate earnings at a given point in time. Profitability ratios are also a good indicator for how well existing assets are being used to generate profit and value for shareholders.
Utilizing the annual report, refer to the Notes to the Financial Statements and analyze Coca Cola’s financial statements for the last 3 years.
Part 1: Profitability Ratios
In the Ratios tab of the FSAR Excel Spreadsheet, complete the Profitability Ratios section. Calculate the profitability ratios.
Address the following analysis questions in the comments section of each ratio:
What accounts changed for the period and how did this affect the Financial Analysis calculation?
Why did the account change during the period? Explain what Coca Cola’s decisions may have caused the change.
How does this change influence the Coca Cola’s performance?
You will submit the FSAR Excel Spreadsheet with the analyzed data for Coca Cola.note, to earn full credit on this assignment you must show detailed work in Excel, which includes providing the formulas and comments in the cells, not just the summary value.
APA style is not required, but solid academic writing is expected.
You are not required to submit this part of the assignment to LopesWrite.
Part 2: Profitability Ratio Analysis
After completing the calculations and comments in the FSAR Excel Spreadsheet, create a 250-500 word document analyzing the above profitability ratios. Address the following in your response.
Assess the significant trends you see for Coca Cola’s profitability by discussing how the net profit margin affects return on assets, and how the depreciation of assets affects the profitability ratios.
Discuss whether the profitability ratios you calculated support your previous analysis of liquidity and solvency ratios. Include discussion of whether Coca Cola would be considered a good investment.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
