FINANCIAL STATEMENTS Income Statement Income Statement Coca-Cola Pepsi 2003 2004
ID: 2628029 • Letter: F
Question
FINANCIAL STATEMENTS Income Statement Income Statement Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ( in $ millions) ( in $ millions) Sales 21,044 21,962 23,104 24,088 28,857 31,944 30,990 35,119 46,542 48,017 26,971 29,261 32,562 35,137 39,474 43,251 43,232 57,838 66,504 65,492 Cost of Revenue 7,762 7,638 8,195 8,164 10,406 11,374 11,088 12,693 18,216 19,052 12,379 13,406 14,176 15,762 18,038 20,351 20,099 26,575 31,593 31,291 Gross Profit 13,282 14,324 14,909 15,924 18,451 20,570 19,902 22,426 28,326 28,965 14,592 15,855 18,386 19,375 21,436 22,900 23,133 31,263 34,911 34,201 Selling, General and Admn Exp 8,061 8,626 8,824 9,616 11,199 12,124 11,671 13,977 18,172 18,185 9,666 10,449 12,314 12,774 14,208 15,901 15,026 22,814 25,145 24,970 Depreciation 0 0 0 0 0 0 0 0 0 0 145 147 150 162 58 64 63 117 133 119 Operating Profit 5,221 5,698 6,085 6,308 7,252 8,446 8,231 8,449 10,154 10,780 4,781 5,259 5,922 6,439 7,170 6,935 8,044 8,332 9,633 9,112 Other Income 452 720 845 490 1,077 -569 1,070 6,527 1,702 1,426 374 492 716 789 685 415 432 803 57 91 EBIT 5,673 6,418 6,930 6,798 8,329 7,877 9,301 14,976 11,856 12,206 5,155 5,751 6,638 7,228 7,855 7,350 8,476 9,135 9,690 9,203 Interest 178 196 240 220 456 438 355 733 417 397 163 167 256 239 224 329 397 903 856 899 EBT 5,495 6,222 6,690 6,578 7,873 7,439 8,946 14,243 11,439 11,809 4,992 5,584 6,382 6,989 7,631 7,021 8,079 8,232 8,834 8,304 Taxes 1,148 1,375 1,818 1,498 1,892 1,632 2,122 1,409 2,177 2,723 1,424 1,372 2,304 1,347 1,973 1,879 2,133 1,177 2,391 2,126 Net Income 4,347 4,847 4,872 5,080 5,981 5,807 6,824 12,834 9,262 9,086 3,568 4,212 4,078 5,642 5,658 5,142 5,946 7,055 6,443 6,178 Balance Sheet Balance Sheet Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Assets ( in $ millions) ( in $ millions) Cash and Cash Equivalents 3,362 6,707 4,701 2,440 4,093 4,701 6,959 8,379 12,803 8,442 820 1280 1716 1651 910 2064 3,943 5,943 4067 6297 Short-term Investments 120 61 66 150 215 278 2,192 2,820 1,232 8,109 1181 2165 3166 1171 1571 213 192 426 358 322 Accounts Receivables 2,091 2,171 2,281 2,704 3,317 3,090 3,758 4,430 4,920 4,759 2830 2999 3261 3725 4389 4683 4,624 6,323 6912 7041 Inventory 1,252 1,420 1,424 1,641 2,220 2,187 2,354 2,650 3,092 3,264 1412 1541 1693 1926 2290 2522 2,618 3,372 3827 3581 Other Current Assets 1,571 1,735 1,778 1,506 2,260 1,920 2,226 3,162 3,450 5,754 687 654 618 657 991 1324 1,194 1,505 2277 1479 Total Current Assets 8,396 12,094 10,250 8441 12,105 12,176 17,489 21,441 25,497 30,328 6930 8639 10454 9130 10151 10806 12,571 17,569 17441 18720 Net Fixed Assets 18,946 19,233 19,177 21,522 31,164 28,343 31,182 50,380 54,477 55,846 18397 19348 21273 20800 24477 25188 27,277 50,584 55441 55918 Total Assets 27,342 31,327 29,427 29,963 43,269 40,519 48,671 71,821 79,974 86,174 25327 27987 31727 29930 34628 35994 39,848 68,153 72882 74638 Liab + Equity ( in $ millions) ( in $ millions) Accounts Payable 4,980 4,751 5,290 5,622 7,173 6,152 6,921 9,132 9,371 9,151 5824 4594 5357 5271 6209 6494 8,292 10,994 11949 12274 Short-term debt 2,906 6,021 4,546 3,268 6,052 6,531 6,800 9,376 14,912 17,874 591 1054 2889 274 0 369 464 4,898 6205 4815 Other Current Liabilities 0 199 0 0 0 305 0 0 0 796 0 1104 1160 1315 1544 1924 0 0 0 0 Total Current Liabilities 7,886 10,971 9,836 8890 13225 12,988 13,721 18,508 24,283 27,821 6415 6752 9406 6860 7753 8787 8,756 15,892 18,154 17,089 Long-term Debt 5,366 4,421 3,236 4153 8,300 7,059 10,151 23,410 24,056 25,563 7038 7663 8001 7623 9641 15101 14,288 31,097 34140 35255 Total Liabilities 13,252 15,392 13,072 13,043 21,525 20,047 23,872 41,918 48,339 53,384 13453 14415 17407 14483 17394 23888 23,044 46,989 52294 52344 Common Stock 874 875 877 878 880 880 880 880 880 1,760 30 30 30 30 30 30 31 26 26 26 Retained Earnings and Capital Surplus 13,216 15,060 15,478 16,042 20,864 19,592 23,919 29,023 30,755 31,030 11844 13542 14290 15417 17204 12076 16,773 21,138 20562 22268 Total Stockholder Equity 14,090 15,935 16,355 16,920 21,744 20,472 24,799 29,903 31,635 32,790 11874 13572 14320 15447 17234 12106 16,804 21,164 20588 22294 Total Liab + Total SH Equity 27,342 31,327 29,427 29963 43,269 40,519 48,671 71,821 79,974 86,174 25327 27987 31727 29930 34628 35994 39,848 68,153 72882 74638 ASSIGNMENT # 7: FINANCIAL ANALYSIS OF COCA COLA AND PEPSI RATIO ANALYSIS 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Liquidity Ratios Current Ratio 1.06 1.10 1.04 0.95 0.92 0.94 1.27 1.16 1.05 ? 1.08 1.28 1.11 1.33 1.31 1.23 1.44 1.11 0.96 ? Quick Ratio 0.91 0.97 0.90 0.76 0.75 0.77 1.10 1.02 0.92 ? 0.86 1.05 0.93 1.05 1.01 0.94 1.14 0.89 0.75 ? Asset Management Ratios Inventory Turnover 16.81 15.47 16.22 14.68 13.00 14.61 13.16 13.25 15.05 ? 19.10 18.99 19.23 18.24 17.24 17.15 16.51 17.15 17.38 ? Days Sales Outstanding 36.27 36.08 36.04 40.97 41.96 35.31 44.26 46.04 38.58 ? 38.30 37.41 36.55 38.69 40.58 39.52 39.04 39.90 37.94 ? Fixed Assets Turnover 1.11 1.14 1.20 1.12 0.93 1.13 0.99 0.70 0.85 ? 1.47 1.51 1.53 1.69 1.61 1.72 1.58 1.14 1.20 ? Total Assets Turnover 0.77 0.70 0.79 0.80 0.67 0.79 0.64 0.49 0.58 ? 1.06 1.05 1.03 1.17 1.14 1.20 1.08 0.85 0.91 ? Debt Ratios Debt Ratio/Leverage 0.48 0.49 0.44 0.44 0.50 0.49 0.49 0.58 0.60 ? 0.53 0.52 0.55 0.48 0.50 0.66 0.58 0.69 0.72 ? Times Interest Earned 31.87 32.74 28.88 30.90 18.27 17.98 26.20 20.43 28.43 ? 31.63 34.44 25.93 30.24 35.07 22.34 21.35 10.12 11.32 ? Profitability Ratios Profit Margin 0.21 0.22 0.21 0.21 0.21 0.18 0.22 0.37 0.20 ? 0.13 0.14 0.13 0.16 0.14 0.12 0.14 0.12 0.10 ? Basic Earning Power 0.21 0.20 0.24 0.23 0.19 0.19 0.19 0.21 0.15 ? 0.20 0.21 0.21 0.24 0.23 0.20 0.21 0.13 0.13 ? Return-on-Assets 0.16 0.15 0.17 0.17 0.14 0.14 0.14 0.18 0.12 ? 0.14 0.15 0.13 0.19 0.16 0.14 0.15 0.10 0.09 ? Return-on-Equity 0.31 0.30 0.30 0.30 0.28 0.28 0.28 0.43 0.29 ? 0.30 0.31 0.28 0.37 0.33 0.42 0.35 0.33 0.31 ? Market Value Ratios Year end Share Price $23.20 $19.65 $20 $24.13 $30.69 $22.64 $28.50 $32.89 $34.99 $35.88 $46.11 $50.00 $58.69 $62.55 $75.90 $54.77 $60.80 $65.33 $66.35 $67.78 No. of shares (millions) 4924 4858 4786 4700 4662 4672 4610 4580 4520 4430 1,739 1,729 1,669 1,689 1,659 1,602 1,653 1,580 1,560 1,540 Earnings per share 0.88 1.00 1.02 1.08 1.28 1.24 1.48 5.60 2.05 ? 2.05 2.44 2.44 3.34 3.41 3.21 3.60 4.47 4.13 ? Price-to-earnings 26.27 19.69 19.65 22.32 23.92 18.21 19.25 11.74 17.07 ? 22.47 20.52 24.02 18.73 22.25 17.06 16.90 14.63 16.06 ? Price-to-cash flow 26.27 19.69 19.65 22.32 23.92 18.21 19.25 11.74 17.07 ? 21.60 19.83 23.17 18.20 22.03 16.85 16.73 14.39 15.74 ? Market-to-Book 8.11 5.99 5.85 6.70 6.58 5.17 5.30 5.04 5.00 ? 6.75 6.37 6.84 6.84 7.31 7.25 5.98 4.88 5.03 ? Du Pont System PM 0.21 0.22 0.21 0.21 0.21 0.18 0.22 0.37 0.20 ? 0.13 0.14 0.13 0.16 0.14 0.12 0.14 0.12 0.10 ? * TA turnover 0.77 0.70 0.79 0.80 0.67 0.79 0.64 0.49 0.58 ? 1.06 1.05 1.03 1.17 1.14 1.20 1.08 0.85 0.91 ? * Equity Multiplier 1.94 1.97 1.80 1.77 1.99 1.98 1.96 2.40 2.53 ? 2.13 2.06 2.22 1.94 2.01 2.97 2.37 3.22 3.54 ? = ROE 0.31 0.30 0.30 0.30 0.28 0.28 0.28 0.43 0.29 ? 0.30 0.31 0.28 0.37 0.33 0.42 0.35 0.33 0.31 ? ASSIGNMENT # 7: FINANCIAL ANALYSIS OF COCA COLA AND PEPSI COMMON SIZE STATEMENTS Income Statement Income Statement Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Cost of Revenue 36.88% 34.78% 35.47% 33.89% 36.06% 35.61% 35.78% 36.14% 39.14% ? 45.90% 45.82% 43.54% 44.86% 45.70% 47.05% 46.49% 45.95% 47.51% ? Gross Profit 63.12% 65.22% 64.53% 66.11% 63.94% 64.39% 64.22% 63.86% 60.86% ? 54.10% 54.18% 56.46% 55.14% 54.30% 52.95% 53.51% 54.05% 52.49% ? Operating Expenses 38.31% 39.28% 38.19% 39.92% 38.81% 37.95% 37.66% 39.80% 39.04% ? 35.84% 35.71% 37.82% 36.35% 35.99% 36.76% 34.76% 39.65% 38.01% ? Operating Profit 24.81% 25.94% 26.34% 26.19% 25.13% 26.44% 26.56% 24.06% 21.82% ? 17.73% 17.97% 18.19% 18.33% 18.16% 16.03% 18.61% 14.41% 14.48% ? Other Income 2.15% 3.28% 3.66% 2.03% 3.73% -1.78% 3.45% 18.59% 3.66% ? 1.39% 1.68% 2.20% 2.25% 1.74% 0.96% 1.00% 1.39% 0.09% ? EBIT 26.96% 29.22% 29.99% 28.22% 28.86% 24.66% 30.01% 42.64% 25.47% ? 19.11% 19.65% 20.39% 20.57% 19.90% 16.99% 19.61% 15.79% 14.57% ? Interest 0.85% 0.89% 1.04% 0.91% 1.58% 1.37% 1.15% 2.09% 0.90% ? 0.60% 0.57% 0.79% 0.68% 0.57% 0.76% 0.92% 1.56% 1.29% ? EBT 26.11% 28.33% 28.96% 27.31% 27.28% 23.29% 28.87% 40.56% 24.58% ? 18.51% 19.08% 19.60% 19.89% 19.33% 16.23% 18.69% 14.23% 13.28% ? Taxes 5.46% 6.26% 7.87% 6.22% 6.56% 5.11% 6.85% 4.01% 4.68% ? 5.28% 4.69% 7.08% 3.83% 5.00% 4.34% 4.93% 2.03% 3.60% ? Net Income 20.66% 22.07% 21.09% 21.09% 20.73% 18.18% 22.02% 36.54% 19.90% ? 13.23% 14.39% 12.52% 16.06% 14.33% 11.89% 13.75% 12.20% 9.69% ? Balance Sheet Balance Sheet Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Assets Cash and Cash Equivalents 12.30% 21.41% 15.98% 8.14% 9.46% 11.60% 14.30% 11.67% 16.01% ? 3.24% 4.57% 5.41% 5.52% 2.63% 5.73% 9.90% 8.72% 5.58% ? Short-term Investments 0.44% 0.19% 0.22% 0.50% 0.50% 0.69% 4.50% 3.93% 1.54% ? 4.66% 7.74% 9.98% 3.91% 4.54% 0.59% 0.48% 0.63% 0.49% ? Accounts Receivables 7.65% 6.93% 7.75% 9.02% 7.67% 7.63% 7.72% 6.17% 6.15% ? 11.17% 10.72% 10.28% 12.45% 12.67% 13.01% 11.60% 9.28% 9.48% ? Inventory 4.58% 4.53% 4.84% 5.48% 5.13% 5.40% 4.84% 3.69% 3.87% ? 5.58% 5.51% 5.34% 6.44% 6.61% 7.01% 6.57% 4.95% 5.25% ? Other Current Assets 5.75% 5.54% 6.04% 5.03% 5.22% 4.74% 4.57% 4.40% 4.31% ? 2.71% 2.34% 1.95% 2.20% 2.86% 3.68% 3.00% 2.21% 3.12% ? Total Current Assets 30.71% 38.61% 34.83% 28.17% 27.98% 30.05% 35.93% 29.85% 31.88% ? 27.36% 30.87% 32.95% 30.50% 29.31% 30.02% 31.55% 25.78% 23.93% ? Net Fixed Assets 69.29% 61.39% 65.17% 71.83% 72.02% 69.95% 64.07% 70.15% 68.12% ? 72.64% 69.13% 67.05% 69.50% 70.69% 69.98% 68.45% 74.22% 76.07% ? Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? Liab + Equity Accounts Payable 18.21% 15.17% 17.98% 18.76% 16.58% 15.18% 14.22% 12.71% 11.72% ? 23.00% 16.41% 16.88% 17.61% 17.93% 18.04% 20.81% 16.13% 16.39% ? Short-term debt 10.63% 19.22% 15.45% 10.91% 13.99% 16.12% 13.97% 13.05% 18.65% ? 2.33% 3.77% 9.11% 0.92% 0.00% 1.03% 1.16% 7.19% 8.51% ? Other Current Liabilities 0.00% 0.64% 0.00% 0.00% 0.00% 0.75% 0.00% 0.00% 0.00% ? 0.00% 3.94% 3.66% 4.39% 4.46% 5.35% 0.00% 0.00% 0.00% ? Total Current Liabilities 28.84% 35.02% 33.43% 29.67% 30.56% 32.05% 28.19% 25.77% 30.36% ? 25.33% 24.13% 29.65% 22.92% 22.39% 24.41% 21.97% 23.32% 24.91% ? Long-term Debt 19.63% 14.11% 11.00% 13.86% 19.18% 17.42% 20.86% 32.59% 30.08% ? 27.79% 27.38% 25.22% 25.47% 27.84% 41.95% 35.86% 45.63% 46.84% ? Total Liabilities 48.47% 49.13% 44.42% 43.53% 49.75% 49.48% 49.05% 58.36% 60.44% ? 53.12% 51.51% 54.86% 48.39% 50.23% 66.37% 57.83% 68.95% 71.75% ? Common Stock 3.20% 2.79% 2.98% 2.93% 2.03% 2.17% 1.81% 1.23% 1.10% ? 0.12% 0.11% 0.09% 0.10% 0.09% 0.08% 0.08% 0.05% 0.04% ? Retained Earnings and Capital Surplus 48.34% 48.07% 52.60% 53.54% 48.22% 48.35% 49.14% 40.41% 38.46% ? 46.76% 48.39% 45.04% 51.51% 49.68% 33.55% 42.09% 31.01% 28.21% ? Total Stockholder Equity 51.53% 50.87% 55.58% 56.47% 50.25% 50.52% 50.95% 41.64% 39.56% ? 46.88% 48.49% 45.14% 51.61% 49.77% 33.63% 42.17% 31.05% 28.25% ? Total Liab + Total SH Equity 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? FINANCIAL STATEMENTS Income Statement Income Statement Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ( in $ millions) ( in $ millions) Sales 21,044 21,962 23,104 24,088 28,857 31,944 30,990 35,119 46,542 48,017 26,971 29,261 32,562 35,137 39,474 43,251 43,232 57,838 66,504 65,492 Cost of Revenue 7,762 7,638 8,195 8,164 10,406 11,374 11,088 12,693 18,216 19,052 12,379 13,406 14,176 15,762 18,038 20,351 20,099 26,575 31,593 31,291 Gross Profit 13,282 14,324 14,909 15,924 18,451 20,570 19,902 22,426 28,326 28,965 14,592 15,855 18,386 19,375 21,436 22,900 23,133 31,263 34,911 34,201 Selling, General and Admn Exp 8,061 8,626 8,824 9,616 11,199 12,124 11,671 13,977 18,172 18,185 9,666 10,449 12,314 12,774 14,208 15,901 15,026 22,814 25,145 24,970 Depreciation 0 0 0 0 0 0 0 0 0 0 145 147 150 162 58 64 63 117 133 119 Operating Profit 5,221 5,698 6,085 6,308 7,252 8,446 8,231 8,449 10,154 10,780 4,781 5,259 5,922 6,439 7,170 6,935 8,044 8,332 9,633 9,112 Other Income 452 720 845 490 1,077 -569 1,070 6,527 1,702 1,426 374 492 716 789 685 415 432 803 57 91 EBIT 5,673 6,418 6,930 6,798 8,329 7,877 9,301 14,976 11,856 12,206 5,155 5,751 6,638 7,228 7,855 7,350 8,476 9,135 9,690 9,203 Interest 178 196 240 220 456 438 355 733 417 397 163 167 256 239 224 329 397 903 856 899 EBT 5,495 6,222 6,690 6,578 7,873 7,439 8,946 14,243 11,439 11,809 4,992 5,584 6,382 6,989 7,631 7,021 8,079 8,232 8,834 8,304 Taxes 1,148 1,375 1,818 1,498 1,892 1,632 2,122 1,409 2,177 2,723 1,424 1,372 2,304 1,347 1,973 1,879 2,133 1,177 2,391 2,126 Net Income 4,347 4,847 4,872 5,080 5,981 5,807 6,824 12,834 9,262 9,086 3,568 4,212 4,078 5,642 5,658 5,142 5,946 7,055 6,443 6,178 Balance Sheet Balance Sheet Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Assets ( in $ millions) ( in $ millions) Cash and Cash Equivalents 3,362 6,707 4,701 2,440 4,093 4,701 6,959 8,379 12,803 8,442 820 1280 1716 1651 910 2064 3,943 5,943 4067 6297 Short-term Investments 120 61 66 150 215 278 2,192 2,820 1,232 8,109 1181 2165 3166 1171 1571 213 192 426 358 322 Accounts Receivables 2,091 2,171 2,281 2,704 3,317 3,090 3,758 4,430 4,920 4,759 2830 2999 3261 3725 4389 4683 4,624 6,323 6912 7041 Inventory 1,252 1,420 1,424 1,641 2,220 2,187 2,354 2,650 3,092 3,264 1412 1541 1693 1926 2290 2522 2,618 3,372 3827 3581 Other Current Assets 1,571 1,735 1,778 1,506 2,260 1,920 2,226 3,162 3,450 5,754 687 654 618 657 991 1324 1,194 1,505 2277 1479 Total Current Assets 8,396 12,094 10,250 8441 12,105 12,176 17,489 21,441 25,497 30,328 6930 8639 10454 9130 10151 10806 12,571 17,569 17441 18720 Net Fixed Assets 18,946 19,233 19,177 21,522 31,164 28,343 31,182 50,380 54,477 55,846 18397 19348 21273 20800 24477 25188 27,277 50,584 55441 55918 Total Assets 27,342 31,327 29,427 29,963 43,269 40,519 48,671 71,821 79,974 86,174 25327 27987 31727 29930 34628 35994 39,848 68,153 72882 74638 Liab + Equity ( in $ millions) ( in $ millions) Accounts Payable 4,980 4,751 5,290 5,622 7,173 6,152 6,921 9,132 9,371 9,151 5824 4594 5357 5271 6209 6494 8,292 10,994 11949 12274 Short-term debt 2,906 6,021 4,546 3,268 6,052 6,531 6,800 9,376 14,912 17,874 591 1054 2889 274 0 369 464 4,898 6205 4815 Other Current Liabilities 0 199 0 0 0 305 0 0 0 796 0 1104 1160 1315 1544 1924 0 0 0 0 Total Current Liabilities 7,886 10,971 9,836 8890 13225 12,988 13,721 18,508 24,283 27,821 6415 6752 9406 6860 7753 8787 8,756 15,892 18,154 17,089 Long-term Debt 5,366 4,421 3,236 4153 8,300 7,059 10,151 23,410 24,056 25,563 7038 7663 8001 7623 9641 15101 14,288 31,097 34140 35255 Total Liabilities 13,252 15,392 13,072 13,043 21,525 20,047 23,872 41,918 48,339 53,384 13453 14415 17407 14483 17394 23888 23,044 46,989 52294 52344 Common Stock 874 875 877 878 880 880 880 880 880 1,760 30 30 30 30 30 30 31 26 26 26 Retained Earnings and Capital Surplus 13,216 15,060 15,478 16,042 20,864 19,592 23,919 29,023 30,755 31,030 11844 13542 14290 15417 17204 12076 16,773 21,138 20562 22268 Total Stockholder Equity 14,090 15,935 16,355 16,920 21,744 20,472 24,799 29,903 31,635 32,790 11874 13572 14320 15447 17234 12106 16,804 21,164 20588 22294 Total Liab + Total SH Equity 27,342 31,327 29,427 29963 43,269 40,519 48,671 71,821 79,974 86,174 25327 27987 31727 29930 34628 35994 39,848 68,153 72882 74638 ASSIGNMENT # 7: FINANCIAL ANALYSIS OF COCA COLA AND PEPSI RATIO ANALYSIS 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Liquidity Ratios Current Ratio 1.06 1.10 1.04 0.95 0.92 0.94 1.27 1.16 1.05 ? 1.08 1.28 1.11 1.33 1.31 1.23 1.44 1.11 0.96 ? Quick Ratio 0.91 0.97 0.90 0.76 0.75 0.77 1.10 1.02 0.92 ? 0.86 1.05 0.93 1.05 1.01 0.94 1.14 0.89 0.75 ? Asset Management Ratios Inventory Turnover 16.81 15.47 16.22 14.68 13.00 14.61 13.16 13.25 15.05 ? 19.10 18.99 19.23 18.24 17.24 17.15 16.51 17.15 17.38 ? Days Sales Outstanding 36.27 36.08 36.04 40.97 41.96 35.31 44.26 46.04 38.58 ? 38.30 37.41 36.55 38.69 40.58 39.52 39.04 39.90 37.94 ? Fixed Assets Turnover 1.11 1.14 1.20 1.12 0.93 1.13 0.99 0.70 0.85 ? 1.47 1.51 1.53 1.69 1.61 1.72 1.58 1.14 1.20 ? Total Assets Turnover 0.77 0.70 0.79 0.80 0.67 0.79 0.64 0.49 0.58 ? 1.06 1.05 1.03 1.17 1.14 1.20 1.08 0.85 0.91 ? Debt Ratios Debt Ratio/Leverage 0.48 0.49 0.44 0.44 0.50 0.49 0.49 0.58 0.60 ? 0.53 0.52 0.55 0.48 0.50 0.66 0.58 0.69 0.72 ? Times Interest Earned 31.87 32.74 28.88 30.90 18.27 17.98 26.20 20.43 28.43 ? 31.63 34.44 25.93 30.24 35.07 22.34 21.35 10.12 11.32 ? Profitability Ratios Profit Margin 0.21 0.22 0.21 0.21 0.21 0.18 0.22 0.37 0.20 ? 0.13 0.14 0.13 0.16 0.14 0.12 0.14 0.12 0.10 ? Basic Earning Power 0.21 0.20 0.24 0.23 0.19 0.19 0.19 0.21 0.15 ? 0.20 0.21 0.21 0.24 0.23 0.20 0.21 0.13 0.13 ? Return-on-Assets 0.16 0.15 0.17 0.17 0.14 0.14 0.14 0.18 0.12 ? 0.14 0.15 0.13 0.19 0.16 0.14 0.15 0.10 0.09 ? Return-on-Equity 0.31 0.30 0.30 0.30 0.28 0.28 0.28 0.43 0.29 ? 0.30 0.31 0.28 0.37 0.33 0.42 0.35 0.33 0.31 ? Market Value Ratios Year end Share Price $23.20 $19.65 $20 $24.13 $30.69 $22.64 $28.50 $32.89 $34.99 $35.88 $46.11 $50.00 $58.69 $62.55 $75.90 $54.77 $60.80 $65.33 $66.35 $67.78 No. of shares (millions) 4924 4858 4786 4700 4662 4672 4610 4580 4520 4430 1,739 1,729 1,669 1,689 1,659 1,602 1,653 1,580 1,560 1,540 Earnings per share 0.88 1.00 1.02 1.08 1.28 1.24 1.48 5.60 2.05 ? 2.05 2.44 2.44 3.34 3.41 3.21 3.60 4.47 4.13 ? Price-to-earnings 26.27 19.69 19.65 22.32 23.92 18.21 19.25 11.74 17.07 ? 22.47 20.52 24.02 18.73 22.25 17.06 16.90 14.63 16.06 ? Price-to-cash flow 26.27 19.69 19.65 22.32 23.92 18.21 19.25 11.74 17.07 ? 21.60 19.83 23.17 18.20 22.03 16.85 16.73 14.39 15.74 ? Market-to-Book 8.11 5.99 5.85 6.70 6.58 5.17 5.30 5.04 5.00 ? 6.75 6.37 6.84 6.84 7.31 7.25 5.98 4.88 5.03 ? Du Pont System PM 0.21 0.22 0.21 0.21 0.21 0.18 0.22 0.37 0.20 ? 0.13 0.14 0.13 0.16 0.14 0.12 0.14 0.12 0.10 ? * TA turnover 0.77 0.70 0.79 0.80 0.67 0.79 0.64 0.49 0.58 ? 1.06 1.05 1.03 1.17 1.14 1.20 1.08 0.85 0.91 ? * Equity Multiplier 1.94 1.97 1.80 1.77 1.99 1.98 1.96 2.40 2.53 ? 2.13 2.06 2.22 1.94 2.01 2.97 2.37 3.22 3.54 ? = ROE 0.31 0.30 0.30 0.30 0.28 0.28 0.28 0.43 0.29 ? 0.30 0.31 0.28 0.37 0.33 0.42 0.35 0.33 0.31 ? ASSIGNMENT # 7: FINANCIAL ANALYSIS OF COCA COLA AND PEPSI COMMON SIZE STATEMENTS Income Statement Income Statement Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Cost of Revenue 36.88% 34.78% 35.47% 33.89% 36.06% 35.61% 35.78% 36.14% 39.14% ? 45.90% 45.82% 43.54% 44.86% 45.70% 47.05% 46.49% 45.95% 47.51% ? Gross Profit 63.12% 65.22% 64.53% 66.11% 63.94% 64.39% 64.22% 63.86% 60.86% ? 54.10% 54.18% 56.46% 55.14% 54.30% 52.95% 53.51% 54.05% 52.49% ? Operating Expenses 38.31% 39.28% 38.19% 39.92% 38.81% 37.95% 37.66% 39.80% 39.04% ? 35.84% 35.71% 37.82% 36.35% 35.99% 36.76% 34.76% 39.65% 38.01% ? Operating Profit 24.81% 25.94% 26.34% 26.19% 25.13% 26.44% 26.56% 24.06% 21.82% ? 17.73% 17.97% 18.19% 18.33% 18.16% 16.03% 18.61% 14.41% 14.48% ? Other Income 2.15% 3.28% 3.66% 2.03% 3.73% -1.78% 3.45% 18.59% 3.66% ? 1.39% 1.68% 2.20% 2.25% 1.74% 0.96% 1.00% 1.39% 0.09% ? EBIT 26.96% 29.22% 29.99% 28.22% 28.86% 24.66% 30.01% 42.64% 25.47% ? 19.11% 19.65% 20.39% 20.57% 19.90% 16.99% 19.61% 15.79% 14.57% ? Interest 0.85% 0.89% 1.04% 0.91% 1.58% 1.37% 1.15% 2.09% 0.90% ? 0.60% 0.57% 0.79% 0.68% 0.57% 0.76% 0.92% 1.56% 1.29% ? EBT 26.11% 28.33% 28.96% 27.31% 27.28% 23.29% 28.87% 40.56% 24.58% ? 18.51% 19.08% 19.60% 19.89% 19.33% 16.23% 18.69% 14.23% 13.28% ? Taxes 5.46% 6.26% 7.87% 6.22% 6.56% 5.11% 6.85% 4.01% 4.68% ? 5.28% 4.69% 7.08% 3.83% 5.00% 4.34% 4.93% 2.03% 3.60% ? Net Income 20.66% 22.07% 21.09% 21.09% 20.73% 18.18% 22.02% 36.54% 19.90% ? 13.23% 14.39% 12.52% 16.06% 14.33% 11.89% 13.75% 12.20% 9.69% ? Balance Sheet Balance Sheet Coca-Cola Pepsi 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Assets Cash and Cash Equivalents 12.30% 21.41% 15.98% 8.14% 9.46% 11.60% 14.30% 11.67% 16.01% ? 3.24% 4.57% 5.41% 5.52% 2.63% 5.73% 9.90% 8.72% 5.58% ? Short-term Investments 0.44% 0.19% 0.22% 0.50% 0.50% 0.69% 4.50% 3.93% 1.54% ? 4.66% 7.74% 9.98% 3.91% 4.54% 0.59% 0.48% 0.63% 0.49% ? Accounts Receivables 7.65% 6.93% 7.75% 9.02% 7.67% 7.63% 7.72% 6.17% 6.15% ? 11.17% 10.72% 10.28% 12.45% 12.67% 13.01% 11.60% 9.28% 9.48% ? Inventory 4.58% 4.53% 4.84% 5.48% 5.13% 5.40% 4.84% 3.69% 3.87% ? 5.58% 5.51% 5.34% 6.44% 6.61% 7.01% 6.57% 4.95% 5.25% ? Other Current Assets 5.75% 5.54% 6.04% 5.03% 5.22% 4.74% 4.57% 4.40% 4.31% ? 2.71% 2.34% 1.95% 2.20% 2.86% 3.68% 3.00% 2.21% 3.12% ? Total Current Assets 30.71% 38.61% 34.83% 28.17% 27.98% 30.05% 35.93% 29.85% 31.88% ? 27.36% 30.87% 32.95% 30.50% 29.31% 30.02% 31.55% 25.78% 23.93% ? Net Fixed Assets 69.29% 61.39% 65.17% 71.83% 72.02% 69.95% 64.07% 70.15% 68.12% ? 72.64% 69.13% 67.05% 69.50% 70.69% 69.98% 68.45% 74.22% 76.07% ? Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? Liab + Equity Accounts Payable 18.21% 15.17% 17.98% 18.76% 16.58% 15.18% 14.22% 12.71% 11.72% ? 23.00% 16.41% 16.88% 17.61% 17.93% 18.04% 20.81% 16.13% 16.39% ? Short-term debt 10.63% 19.22% 15.45% 10.91% 13.99% 16.12% 13.97% 13.05% 18.65% ? 2.33% 3.77% 9.11% 0.92% 0.00% 1.03% 1.16% 7.19% 8.51% ? Other Current Liabilities 0.00% 0.64% 0.00% 0.00% 0.00% 0.75% 0.00% 0.00% 0.00% ? 0.00% 3.94% 3.66% 4.39% 4.46% 5.35% 0.00% 0.00% 0.00% ? Total Current Liabilities 28.84% 35.02% 33.43% 29.67% 30.56% 32.05% 28.19% 25.77% 30.36% ? 25.33% 24.13% 29.65% 22.92% 22.39% 24.41% 21.97% 23.32% 24.91% ? Long-term Debt 19.63% 14.11% 11.00% 13.86% 19.18% 17.42% 20.86% 32.59% 30.08% ? 27.79% 27.38% 25.22% 25.47% 27.84% 41.95% 35.86% 45.63% 46.84% ? Total Liabilities 48.47% 49.13% 44.42% 43.53% 49.75% 49.48% 49.05% 58.36% 60.44% ? 53.12% 51.51% 54.86% 48.39% 50.23% 66.37% 57.83% 68.95% 71.75% ? Common Stock 3.20% 2.79% 2.98% 2.93% 2.03% 2.17% 1.81% 1.23% 1.10% ? 0.12% 0.11% 0.09% 0.10% 0.09% 0.08% 0.08% 0.05% 0.04% ? Retained Earnings and Capital Surplus 48.34% 48.07% 52.60% 53.54% 48.22% 48.35% 49.14% 40.41% 38.46% ? 46.76% 48.39% 45.04% 51.51% 49.68% 33.55% 42.09% 31.01% 28.21% ? Total Stockholder Equity 51.53% 50.87% 55.58% 56.47% 50.25% 50.52% 50.95% 41.64% 39.56% ? 46.88% 48.49% 45.14% 51.61% 49.77% 33.63% 42.17% 31.05% 28.25% ? Total Liab + Total SH Equity 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ? 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% ?Explanation / Answer
Financial statement analysis involves the identification of the following items for a company's financial statements over a series of reporting periods:
Financial statement analysis is an exceptionally powerful tool for a variety of users of financial statements, each having different objectives in learning about the financial circumstances of the entity.
Users of Financial Statement Analysis
There are a number of users of financial statement analysis. They are:
Methods of Financial Statement Analysis
There are two key methods for analyzing financial statements. The first method is the use of horizontal and vertical analysis. Horizontal analysis is the comparison of financial information over a series of reporting periods, while vertical analysis is the proportional analysis of a financial statement, where each line item on a financial statement is listed as a percentage of another item. Typically, this means that every line item on an income statement is stated as a percentage of gross sales, while every line item on a balance sheet is stated as a percentage of total assets. Thus, horizontal analysis is the review of the results of multiple time periods, whiile vertical analysis is the review of the proportion of accounts to each other within a single period. The following links will direct you to more information about horizontal and vertical analyis:
The second method for analyzing financial statements is the use of many kinds of ratios. You use ratios to calculate the relative size of one number in relation to another. After you calculate a ratio, you can then compare it to the same ratio calculated for a prior period, or that is based on an industry average, to see if the company is performing in accordance with expectations. In a typical financial statement analysis, most ratios will be within expectations, while a small number will flag potential problems that will attract the attention of the reviewer.
There are several general categories of ratios, each designed to examine a different aspect of a company's performance. The general groups of ratios are:
Problems with Financial Statement Analysis
While financial statement analysis is an excellent tool, there are several issues to be aware of that can interfere with your interpretation of the analysis results. These issues are:
Similar Terms
Horizontal analysis is also known as trend analysis.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.