Financial Statement Comparison of PepsiCo and Coca-Cola

PepsiCo’s financial statements are presented in Appendix A. Financial statements of The Coca-Cola Company are presented in Appendix B.
This is from the appendixes in the 7th edition of financial accounting by Weygandt, kimmel, and kieso.

Instructions:

(a) Based on the information contained in these financial statements, determine each of the following for each company. Please show all numerical equations including numerator and denominator, not just a final number. Present your work in a comparative format using a table as illustrated:
1) Gross profit for 2008 PepsiCo Coca-Cola and Gross profit rate for 2008.

2) Percent change in operating income from 2007 to 2008.

3) Accounts receivable turnover for 2008.

4) Days sales in receivable for 2008.

5) Inventory turnover for 2008.

6) Days inventory on hand for 2008.

7) Increase (decrease) in cash and cash equivalents from 2007 to 2008.

8 ) Asset turnover ratio for 2008.

9) Working capital at the end of 2008.

10) Current ratio at the end of 2008.

11) Debt (excluding “deferred income taxes”) to total assets at the end of 2008.

12) Book value per share at the end of 2008.

(Hint: Use the value reported for “common shareholders’ equity” as the numerator for PepsiCo.)

13) Compare the market value per share for each company to the book value per share at the end of 2008. Assume that the market value of Coca-Cola’s stock was $45.27
14) Why are book value and market value per share different?

15) Return on common stockholders’ equity at the end of 2008.

(b) What conclusions concerning the relative profitability, liquidity, long-run solvency, and the efficiency of assets can be drawn from your analysis above?

(c) Using information from your analysis, would you recommend purchasing the stock of PepsiCo or Coca-Cola

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7 Responses to Financial Statement Comparison of PepsiCo and Coca-Cola

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