The purpose of this assignment is to analyze the financial performance of a company to make recommendations to potential investors about the purchase of stock. Studying all aspects of a company’s financial statements is necessary in order to understand the financial performance and health of a company. This is particularly important for investors trying to determine whether to buy stock in the company.
– An investor has approached you about whether purchasing stock in the company would be a wise investment. Using your financial analysis of the company, you will send a letter to the investor summarizing your findings and explaining whether you recommend a stock purchase at this time. Refer to the Annual Reports for Approved Companies located in the course materials. You will use information in the Form 10-K to complete this assignment. Using the correct formulas and a separate tab for each analysis, calculate the following ratios using Excel
You will use information in the Form 10-K for the company you selected in the Topic 1 to complete this assignment. Using the correct formulas and a separate tab for each analysis, calculate the following ratios using Excel:
1.) Three liquidity ratios for the past 2 years
2.) Three solvency ratios for the past 2 years
3.) Three profitability ratios for the past 2 years
– In addition, conduct research about a competitor company within the same sector using IBIS World and other topic resources. Complete a competitor analysis that includes a minimum of three ratios and compares your company to a competitor company using these ratios to determine financial performance as well as how the company compares to overall industry averages. Justify your analysis by explaining your findings.
– Using your research findings and analysis of company performance in relation to industry competitors, construct a 500-750 word letter making stock purchase recommendations for a potential investor. In the letter, address the following, referencing specific ratios and comparative numbers as appropriate.
– Discuss the overall financial performance of your company in relation to industry averages and a specific competitor. Explain whether the company performed better or worse than the competition using specific numbers and providing an explanation of what the numbers illustrate.
– Recommend whether the potential investor should purchase stock in your company and justify your recommendation based upon your research and analysis of the company ratios and industry competition.
**** YOU WILL NEED TO CALL ME TO CALCULATE THE PRICE FOR THE EXCEL SHEET. THIS IS WHAT I DID LAST TIME SINCE THERE IS NO OPTION. PLEASE USE THE DOCUMENTED LINKS BELOW THIS MESSAGE FOR THE STUDY. THANK YOU.******
PEPSI CO 10-K FORM:
https://www.sec.gov/Archives/edgar/data/77476/000007747620000015/0000077476-20-000015-index.htm
COKE 10-K FORM (COMPETITOR COMPANY):
https://www.sec.gov/Archives/edgar/data/317540/000156459020006432/0001564590-20-006432-index.htm
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