Comparative Analysis Case The Coca-Cola Company and PepsiCo. Inc Instructions: G

Question

Comparative Analysis Case
The Coca-Cola Company and PepsiCo. Inc
Instructions: Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo. Inc,
(a) What format(s) did these companies use to present their balance sheets?
(b) How much working capital did each of these companies have at the end of 2009? Speculate as to their rationale for the amount of working capital they maintain.
(c) What is the most significant difference in the asset structure of the two companies? What causes this difference?
(d) What are the companies’ annual and 5-years (2005-2009) growth rates in total assets and long-term debt?
(e) What was these two companies’ trends in net cash provided by operating activities over the period 2007 to 2009?
(f) Compute both companies’ (1) current cash debt coverage ratio. (2) cash debt coverage ratio, and (3) free cash flow. What do these ratios indicate about the financial condition of the two companies?

Explanation / Answer

Coca-Cola Company Consolidated Balance Sheet - January 31, 2001 Current Assets Dec. 31, 2001 Dec. 31, 1999 Cash & Equivalents $1,819,000,000 $1,611,000,000 Short Term Investments $73,000,000 $201,000,000 Receivables $1,757,000,000 $1,798,000,000 Inventories $1,066,000,000 $1,076,000,000 Pre-Paid Expenses $1,905,000,000 $1,794,000,000 Total Current Assets $6,620,000,000 $6,480,000,000 Long Term Assets $8,129,000,000 $8,916,000,000 Property, Plant, & Equipment $4,168,000,000 $4,267,000,000 Goodwill $1,917,000,000 $1,960,000,000 Total Assets $20,834,000,000 21,623,000,000 Current Liabilities Accounts Payable $9,300,000,000 $4,483,000,000 Short Term Debt $21,000,000 $5,373,000,000 Total Current Liabilities $9,321,000,000 $9,856,000,000 Long-Term Liabilities Long-Term Debt $835,000,000 $854,000,000 Other Liabilities $1,004,000,000 $902,000,000 Deferred Long Term Liability Charges $358,000,000 $498,000,000 Total Liabilities $11,518,000,000 $12,110,000,000 Shareholders' Equity Common Stock $870,000,000 $867,000,000 Retained Earnings $21,265,000,000 $20,773,000,000 Treasury Stock ($13,293,000,000) ($13,160,000,000) Capital Surplus $3,196,000,000 $2,584,000,000 Other Stockholder Equity ($2,722,000,000) ($1,551,000,000) Total Stockholder Equity $9,316,000,000 $9,513,000,000 pepsico inc. Period Ending 25-Dec-2010 26-Dec-2009 27-Dec-2008 Assets Current Assets Cash And Cash Equivalents 5,943,000 3,943,000 2,064,000 Short Term Investments 426,000 192,000 213,000 Net Receivables 6,323,000 4,624,000 4,683,000 Inventory 3,372,000 2,618,000 2,522,000 Other Current Assets 1,505,000 1,194,000 1,324,000 Total Current Assets 17,569,000 12,571,000 10,806,000 Long Term Investments 1,368,000 4,484,000 3,998,000 Property Plant and Equipment 19,058,000 12,671,000 11,663,000 Goodwill 14,661,000 6,534,000 5,124,000 Intangible Assets 13,808,000 2,623,000 1,860,000 Accumulated Amortization - - - Other Assets 1,689,000 965,000 2,324,000 Deferred Long Term Asset Charges - - 219,000 Total Assets 68,153,000 39,848,000 35,994,000 Liabilities Current Liabilities Accounts Payable 10,994,000 8,292,000 6,494,000 Short/Current Long Term Debt 4,898,000 464,000 369,000 Other Current Liabilities - - 1,924,000 Total Current Liabilities 15,892,000 8,756,000 8,787,000 Long Term Debt 19,999,000 7,400,000 7,858,000 Other Liabilities 6,729,000 5,591,000 7,017,000 Deferred Long Term Liability Charges 4,057,000 659,000 226,000 Minority Interest 312,000 638,000 - Negative Goodwill - - - Total Liabilities 46,989,000 23,044,000 23,888,000 Stockholders' Equity Misc Stocks Options Warrants (109,000) (104,000) - Redeemable Preferred Stock - - (97,000) Preferred Stock - - - Common Stock 31,000 30,000 30,000 Retained Earnings 37,090,000 33,805,000 30,638,000 Treasury Stock (16,745,000) (13,383,000) (14,122,000) Capital Surplus 4,527,000 250,000 351,000 Other Stockholder Equity (3,630,000) (3,794,000) (4,694,000) Total Stockholder Equity 21,273,000 16,908,000 12,203,000 Net Tangible Assets (7,196,000) 7,751,000 5,219,000 Currency in USD.

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