The financial performance of a company is important to different stakeholders such as investors, employees, and creditors. Understanding the financial statements and how to evaluate them is important to make good financial decisions. Financial ratios are used to determine the health of a company. Ratios are a tool used to analyze the finances of the company using the balance sheet, income statement, and cash flow statement.

Select two of the four companies shown below. Use the SEC Edgar website for your research.

Companies:

Ford
General Motors
Pepsi
Coca-Cola
Compare the firms’ profits for the past two years.
Compute the working capital for each firm.
Determine the price-earnings (P/E) ratio.
Calculate the debt-to-equity ratio.
Explain what each calculation tells you about the firm. Are they a good investment? Compare the two companies and explain which is the better investment and why. What other types of ratios would be helpful in this analysis? Explain.

Answer rating: 100% (QA)

For this analysis we will compare the profits of Ford and Pepsi for the past two years Profit Comparison Ford In 2019 Ford reported a net income of 368 billion compared to 76 billion in 2018 Pepsi In ... View the full answer