Coca-Cola & Pepsi Financial Statement Analysis

Topics: Asset, Financial ratios, Balance sheet, Financial ratio, Generally Accepted Accounting Principles, Investment / Pages: 2 (357 words) / Published: Sep 26th, 2013
Coca-Cola & Pepsi
Financial Statement
Analysis

Team A
Frances Sanchez, Herbie Merced, and
Javier Urbina
ACC 400 Accounting for Decision Making
August 22, 2013

Introduction
• Comparison of Coca-Cola and Pepsi
• Financials from 2004
• Review financial ratios
▫ Liquidity
▫ Solvency
▫ Profitability

• Discuss profitability of each company
• Which company is the best investment opportunity

Coca-Cola & Pepsi Ratios Comparison
Liquidity Ratios
Current Ratio (Current Assets/Current Liabilities)

Coca-Cola

Pepsi-Cola

1.10

1.27

($12,094/$10,971)

($8,639/$6,752)

Current Cash Debt Coverage Ratio (Cash Provided By

.63

.76

Operations/Average Current Liabilities)

($5,968/$9,429)

($5,054/$6,584)

Inventory Turnover Ratio (Cost of Goods Sold/Average Inventory)

5.71

9.07

($7,638/$1,336)

($13,406/$1,477)

63.92

40.24

(365/5.71)

(365/9.07)

Receivables Turnover Ratio (Net Credit Sales/Average Net

10.30 times

10.03 times

Receivables)

($21,962/$2,131)

($29,261/$2,915)

Average Collection Period (365 days/Receivables Turnover Ratio)

35.43 days

36.39 days

(365/10.30)

(365 ÷ 9.7)

Days In Inventory (365 days/Inventory Turnover Ratio)

Coca-Cola & Pepsi Ratios Comparison
Solvency Ratios
Debt to Total Assets Ratio (Total Liabilities/Total Assets)

Coca-Cola

Pepsi-Cola

49%

51%

($15,392/$31,327)

($14,464/$27,987)

Cash Debt Coverage Ratio (Cash Provided By

.41

.18

Operations/Average Total Liabilities)

($5,968/$14,322)

($5,054/$27,917)

Times Interest Earned Ratio (Net Income + Interest Expense +

32.74%

34.43%

Tax Expense/Interest Expense)

($4,847 + $196 +

($4,212 + $167 +

$1,375/$196)

$1,372/$167)

Free Cash Flow (Cash Provided By Operations – Capital

$2,784,000

$2,338,000

Expenditures – Cash Dividends)

($5,968 - $755 - $2,429)

($5,054 - $1,387 - $1,329)

Profitability Ratios
Profitability



References: Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2007). Financial accounting: Tools for business decision making (4th ed.). Hoboken, NJ: John Wiley & Sons.

You May Also Find These Documents Helpful

  • Financial Report Analysis Coca-Cola & Pepsi
  • Coca-cola and Pepsi
  • Coca-cola and Pepsi
  • Coca-Cola Co: Financial Statement Analysis
  • Coca-Cola Financial Analysis
  • Financial Analysis Coca-Cola
  • Coca-Cola and Pepsi Pension
  • Case: Coca-cola and Pepsi Cola
  • Financial Statement Analysis of Coca Cola Company
  • Finals Project - Financial Analysis of Pepsi Co. and Coca-Cola