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Financial Measure Pepsi Co and Coca-Cola




(a) Based on the information contained in these financial statements, determine each of the following for each company. 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 below (show the work within the table). Leave the numbers rounded as they appear in the financials, and round results to one decimal place when necessary;Financial Measure PepsiCo Coca-Cola;Profit margin;Net income/Net sales;xxxx/xxxx = xx% xxxx/xxxx = xx%;1) Current ratio at the end of 2008.;2) Acid-Test Ratio at the end of 2008.;3) Accounts receivable turnover for 2008.;4) Average Collection Period (aka days sales in receivable) for 2008.;5) Inventory turnover for 2008.;6) Days inventory on hand for 2008.;7) Profit margin expressed as a % of net sales for 2008.;8) Asset turnover ratio at the end of 2008.;9) Return on assets for 2008.;10) Return on common stockholders? equity at the end of 2008.;11) Earnings per share (EPS) for 2008.;12) Debt (excluding ?deferred income taxes?) to total assets at the end of 2008.;13) Times interest earned for 2008. [(Net income + income tax expense + interest expense)/interest exp.];14) Book value per common share (aka equity per common share) at the end of 2008. (Hint: Use the value reported for ?common shareholders? equity? as the numerator for PepsiCo.);15) In reference to #?s 14 above, define book value per common share and market value per common share, and explain at least two of the factors attributing to their differences.;(c) What conclusions concerning the relative profitability, liquidity, long-run solvency, and the efficiency of assets can be drawn from your analysis above (compare and contrast the two;competitors using specific financial measures from the analysis above)? I am expecting at least one paragraph on each financial measure. (12 points);(d) Using information from your analysis (state which parts of the analysis are being used), would the group recommend purchasing the stock of PepsiCo or Coca-Cola? (3 points)


Paper#81495 | Written in 18-Jul-2015

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