Provide a summary of the issue that Coca-Cola face

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Provide a summary of the issue that Coca-Cola face. Prepare a 3-5-page report that analyzes the financial condition of Coca-Cola. Included in the memo should be a section describing the company’s liquidity. Make sure that you include the heading of each section in your report. Also include the following financial exhibits in excel: o Vertical (common size) analysis of income statement and balance sheet o Horizontal (percent-change) analysis of income statement and balance sheet company’s liquidity, I need analysis of the following: Vertical (common size) analysis of income statement and balance sheet Horizontal (percent-change) analysis of income statement and balance sheet And the company's liquidity.
 

The Financial Statement Analysis

Vertical (common size) analysis of income statement and balance sheet

Vertical analysis (also known as common-size analysis) is a popular form of financial statement analysis that displays each item on a statement as a percentage of the statement's base number.

Our company's vertical analysis of income statement research reveals that our net income was 18 percent in 2018, 24 percent in 2019, and the same net income percentage in 2020.

While a vertical analysis of our balance sheet reveals that our total current assets for the year 2018 are 30 percent, they are 24 percent in 2019 and just 6 percent in 2020.

Horizontal (percent-change) analysis of income statement and balance sheet

Horizontal analysis is a method of analyzing financial statements that compares particular financial information from one accounting period to information from prior periods.

Our company's horizontal income statement analysis indicates that we had a 39 percent loss from 2018 to 2019, however we had a 14 percent profit from 2019 to 2020.

Company liquidity ratio analysis

1.            Current Ratio:

A ratio higher than 1.0 shows that a company can at least satisfy its current obligations with its current assets. A decent current to current ratio is between 1.2 and 2. In our case, it is about 1.107, indicating that they have more current assets than current liabilities.

2.            Quick Ratio:

The quick ratio assesses a company's capacity to satisfy its short-term commitments using its most liquid assets and is an indication of its short-term liquidity situation.

A quick ratio of 1 or above is regarded satisfactory. In our situation, it is about 0.626, indicating that the company's capacity to service its short-term loans is deteriorating and that action to increase liquidity is required.