HELP!!!!!! Research and Analysis on FINANCIAL STATEMENT for Accounting 101 class?..... best answer=10pts?

Question

My Accounting 101 professor wants us to analyze a corportation's performance using ratio, trend, and historical analysis, etc.

Lets say I choose to research COCA-COLA.

Where do I get their financial info?
Should I be looking at their stock charts?
What kinds of things do I need to know in order to reach a conclusion?

Anyone have websites?
Anyone have SAMPLE financial statement analysis?


Keep in mind this is a 101 accounting class.

Thank you.

Answer 1

1. Get their financial statements at Yahoo! finance. Get a quote and on the left side of the screen you will have options to select for financial statements.

2. Do not look at stock charts. Stock price is the market perception of company performance, not neccesarily reflective of actual performance.

3. You should know something about the company's business model. This will help understand what ratios are most important. For example in a retial business inventory and gross profit is very important. For a financial company these items are not important at all.

My suggestion would be to use a retail company as their business model is easy to understand. Take a look at Wal-Mart (WMT). Their business model is high volume and low prices. What we would expect to see from ratio analysis is high inventory turnover (this would show high volume), low gross profit margins (this is evidence of low prices), and high asset turnover (this is evidence of high volume).

Next look at the sales trend and the gross profit margin trend. Increased sales at lower margin indicates the business is expanding but meeting tough competition and thus is losing pricing power. Expanding sales with increasing gross margin % indicates growth with stronger pricing power (every business' dream).

Lastly look at operating income as a % of gross profit. This indicates the companies operating expenses (other than cost of goods). If this is increasing they are getting more efficient. If it is decreasing they are getting less efficient.

Like the last answer I would suggest you stay away from Coke since they are more of a materials company (they make syrup) and kind of a difficult business model. Wal-Mart, Target, or McDonalds would be much easier to understand.

Answer 2

To start with, I think I would find a smaller, less complicated f/s to work with than a multi-national Fortune 500 company, unless you're required to choose a large company like that.

Anyway, in order to do a full analysis, you can go to a website like http://www.bigcharts.com. Enter the ticker symbol of the company you choose (there's a symbol lookup option if you don't know the symbol). Then, you'll find a ton of ratios, trend charts, etc. that should help you analyze a corporation's performance not only in the most general sense, but in comparison to other companies of the same size in the same industry (like comparing Coke vs. Pepsi, Home Depot vs Lowes, Target vs WalMart, etc.).

In order to judge a company's performance, generally judging it against its peers is one way. A more subjective measure has more to do with looking forward-does this company have some new product or service in the near future that can give it an edge over its competitors, or is this company losing a competitive edge it had in the past (very common with pharmaceuticals, with drugs in the pipeline or big selling drugs going off patent).

It's not easy to analyze a company. That's why financial analysts get paid the big bucks at the top brokerage companies! Lots of research, lots of legwork!

Good luck on your assignment.

Answer 3

Actually, most large Corporations always have a " Profit & Loss " section of their corporate standing. You might call your nearest Coca-Cola Corpoate Office and ask. Or you might try a Stock Brokerage Company that may help you out. Good Luck !!

Answer 4

You could go to stockmarket websites that have this information. You could also check out the site of the company. Sometimes they have financial information on the site. Check out MSNBC, or other reputable sites that list stockmarket info for corporations.

Answer 5

Click on the financials link on the yahoo homepage. Then you can search for Coke and get financial statements and ratios from there.