Write an 8-10 page research paper . The 8-10 page count does not include: the title page, graphs or references. The paper must include an introduction or abstract and a summary conclusion.
Project Assignment Using Coke and Pepsi as an Example:
Long time competitors in the soft drink industry, PepsiCo and Coca-Cola continue efforts to gain additional market share. Which do you prefer, Coke or Pepsi? Let’s take a look at these two companies from a financial perspective rather than our drink preference.
To learn more about PepsiCo and Coca-Cola Enterprises, download the latest PepsiCo 2016 Annual Report and the Coca-Cola 2016 Annual Report. Review the annual reports for general information. Each company’s web site should have these reports available. The SEC website also has these annual reports, known as 10Ks,available in the filings tab on that site: HYPERLINK “http://www.sec.gov” www.sec.gov.
The goal of the report is for the team to identify which of the two firms they feel is the better investment over the next 3-5 years. Assume that you’re recommending an investor invest in one of these stocks today and hold that investment for 3-5 years.
Required:
Read -Understanding the Income Statement at: HYPERLINK “http://www.investopedia.com/articles/04/022504.asp” http://www.investopedia.com/articles/04/022504.asp
2. Read -Reading the Balance Sheet at: HYPERLINK “http://www.investopedia.com/articles/04/031004.asp” http://www.investopedia.com/articles/04/031004.asp
3. Compute- the following financial ratios for both companies and provide as an appendix to the required paper. If you need help understanding the meaning of the ratios or how to they are computed, go to: HYPERLINK “http://www.investopedia.com/university/ratios/” http://www.investopedia.com/university/ratios/
Liquidity measurement ratio: Current ratio
Profitability indicator ratios: Return on assets Return on equity
Debt ratio: Debt ratio
Operating performance ratio: Fixed asset turnover ratio
Cash flow indicator ratio: Dividend payout ratio
Investment valuation ratio: Price / Earnings ratio
For each company and comparing the two, you are to write an eight to ten (8-10) page report that answers the following:
1. Provide a short background on each company, the industry and the market (growing, declining, etc?) in which they operate. (This should be no more than 1- 1.5 pages for both companies in total and can be a part of your introduction.)
2. Using the current ratio and debt ratios, discuss what conclusions you can make about each company’s ability to pay current liabilities (debt). Support your conclusions. Which company is doing better, why or why not?
3. Using the profitability and operating performance ratios, discuss what conclusions you can make about each company’s profits over the past three years. Support your conclusions. Which company is doing better, why or why not?
4. Using the cash flow indicator and investment valuation ratios, discuss which company is more likely to have satisfied stockholders. Support your conclusions. Which company is doing better, why or why not?
5. As an investor, discuss which company you would choose to invest in and provide a rationale for your decision. Support your conclusions, why or why not?
6. After concluding your research about each company and reviewing their annual report, discuss what non-financial criteria you would consider when choosing between these two investment options? Support your conclusions, why or why not?
The format of the report indicated below in “More on the Grading Criteria”.
NOTE: You will be graded on the quality of your answers, the logic/organization of the report, your language skills, and your writing skills.
Also, in a professional paper, one does not use contractions (doesn’t, don’t, etc.) and one does not use the personal you or your. Therefore, use the impersonal as I have done in the sentence immediately above. It is more business-professional than saying, “Also in a professional paper you don’t use contractions.”
2. REFERENCES
Part of the requirements for this research assignment is that you include a list of references used for your research. A minimum of three (3) sources must be included in this list of which a minimum of two (2) of these sources must come from the Online Library databases, other University research libraries and/or material included in this course. (EXCLUDING Wikipedia & the text book as references. These may be used after meeting the minimum # of references.)
3. WORD PROCESSING
Use Microsoft Word – If you do not have Microsoft Word or Openoffice work processing, you can save your paper as a “rich text file” (.rtf) or pdf file.
Use 1″ margins top, bottom, left and right sides.
Use Times New Roman, font size 12.
Use double spacing.
Important Note: For ease of reading, your document must contain appropriate headings and subheadings. Headings and sub-headings are a requirement of this research assignment. Headings and subheadings should be placed at the left margin. The use of headings and subheadings are a terrific way to help you organize your research paper.
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