Application: Communicating Financial Performance
Today's organizations can be very large and complex. As a result, many people within the organization may not have a clear vision of how their role contributes to the overall value of the organization or an understanding of the financial metrics used to measure their performance and that of their department. As a manager, you must be able to communicate your organization's financial condition in clear language to direct reports and frontline employees.
To prepare for this week's Assignment, imagine that you are the manager of a bottling distribution center for Pepsi and your department subordinates have been asking you about Pepsi's financial condition and competitive position. In order to answer their questions, complete the following steps:
- PepsiCo is a firm that provides comprehensive financial statements. Go tohttp://finance.yahoo.com/. In the search box type in the symbol for PepsiCo, PEP, into the box and click the "Search Finance" button.
- When the page loads, scroll all the way down to "Financials" in the menu bar and click on "Income Statement." Then, compute the annual percentage change among the three years shown for the following:
- Total Revenue
- Net Income Applicable to Common Shares
- Next, click on "Balance Sheet," which is also under "Financials," and compute the annual percentage change among the three years for the following:
- Total Assets
- Total Liabilities
With the information you collected from the website, write a brief script to explain Pepsi's financial situation to your subordinates. Be sure to write in a relatable way. Assume that some of the people on your team on the bottling line may not understand financial terms like assets, liabilities, net income, etc.