Introduction To Financial Analysis
In today’s scenario, it is necessary for every company to analyze its current position with the help of structured maintained financials. For forecasting the future aspects of a firm, it is necessary for the company to critically evaluate the strategies used for market the products and services to the worldwide customers. It is the return to the investment that attracts future investments in various projects of the company (Aggarwal, Edward and Mellen, 1991). For analyzing the market fluctuation and managing the risk factors, the company needs to evaluate the market trends or the industry trends (Altman, 2012).
Detailed overview of a company
PepsiCo is one of the major and most highlighted companies, which are serving the world by providing world class food and beverages with various tastes. The company is proceeding with the mission to become of the leading company in the food and beverages industry. Along with this, the company is also in process to produce some of the rewards that are financial in nature so that the investors get the better opportunities to grow in the market. The company is providing the best facilities to the employees so that they work effectively and efficiently (Azzone and Maccarrone, 2001).
PepsiCo is committed towards achieving business and financial success while leaving a positive imprint on society. The purpose agenda of the firm consists of human, environmental and talent sustainability (Haka, 1987). The goal of the company is to deliver sustained financial performance.
The firm seeks to provide a safe and inclusive workplace for its employees globally. Its efforts towards talent sustainability consist of hiring, developing and retaining employees from diverse backgrounds. PepsiCo also has a competitive global compensation structure, competitive benefits and ongoing wellness programs (Watts, 1977).
In order to achieve the goal of environment sustainability while growing its businesses in developed countries and expanding in developing and emerging countries, PepsiCo strives to use scientifically proven, socially responsible and economically sound methods and tools (Accounting theories. 2007).
Evaluation of the company’s vulnerability to current financial threats
- As per as the recession is concern, there are some of the major effects that are being seen on the financial performance of the companies equally. Some of the organizations have faced the major decline in their profits and market share.
- The company those are dealing with the products such as soft drinks etc. got effected at the higher level due to recession. The major prints of the recession can be evaluated in case of PepsiCo rather than in Coca-Cola Company. The net profits of the company have reached to the level of 11 percent where as in case of other company it has reached to 14 percent and not below this limit.
- The main reason behind the decline in the growth rate of PepsiCo is the slowdown of the economic valuation. In comparison to the other companies, it has been analyzed that the earning per share of PepsiCo is only 6 percent where as the other companies are having the earning per share as 17 percent.
Financial trends of the company
As per the trends of the company chosen is concern, the ratio shows that the company is the best reflection for the recent position in the market.
Stock analysis for the long period of time
As per the determination of the stock price from the period of 2000 to 2009 is concern, the chart shows the fluctuation in the prices of PepsiCo. As per the keeping in consideration the prices for the year 2020 has been analyzed and evaluated through the method of forecasting.
The technical analysis of the company is the method through which the company can analyze the stock price of the company at every point of time. For the analysis of the stocks the company requires the financial data that is essential available only from the financial statement of the company (Financial ratio and Analysis, 2013). The income statement, balance sheet and the cash flow of the company are essential for determining the actual value of the company in the market and as the value of the firm is defined, the forecasting of the fluctuations in the stock can be determined. As per as the stock of PepsiCo is concern, there are some of the fluctuation that have been measures on the basis of day today observation.
The company will be getting some of the specialist as investor in the market as the trends of the market are changing with the flow of the economy (Unhaenf, 2000). After analyzing the financial condition it is determined that the company will be having the foreign investors more than the domestic investors. Therefore the company needs to control the risk at the future to grow in the market. As the competitors are more therefore it is necessary for the company to manage the risk for better performance in the upcoming years.
Books and journals
- Aggarwal, R. Edward, J. and Mellen, L.E. 1991. Justifying Investments in Flexible Manufacturing Technology: Adding Strategic Analysis to Capital Budgeting Under Uncertainty. Managing Finance. 17(3). pp.77-88.
- Altman, E.I. 2012. Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy. The Journal of Finance. 23(4). pp.589-609.
- Axinn, G.W. and Pearce, D. L., 2006. Mixed Method Data Collection Strategies. Cambridge University Press.
- Azzone, G. and Maccarrone, P. 2001. The Design Of The Investment Post-Audit Process In Large Organizations: Evidence From A Survey. European Journal Of Innovation Management. 4(2). pp.73-87.