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# Competitor Financial Statement Analysis Compare The Coca Cola Company (ticker symbol-KO) and PepsiCo, Inc. (ticker symbol-PEP) for the 2018–2020 years using the financial statement information...

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Competitor Financial Statement Analysis
Compare The Coca Cola Company (ticker symbol-KO) and PepsiCo, Inc. (ticker symbol-PEP) for the 2018–2020 years using the financial statement information provided in their annual 10-k reports which can be found through the U.S. Securities and Exchange Commission using their respective ticker symbols.
Part I
Calculate the listed trends and ratios, showing your work and formulas.
A. Calculate the dollar and percentage changes from 2018 to 2019 and 2019 to 2020 for cash, total assets, net sales, and net income (loss).
B. Prepare trend analysis for cash, total assets, net sales, and net income (loss) for 2018 (base year), 2019, and 2020.
C. Calculate the following ratios for 2020 and 2019 (show your formulas and calculations).
a. Working Capital
. Cu
ent Ratio
c. Quick Ratio
d. Debt Ratio
e. Return on Assets
f. Return on Equity
g. Accounts Receivable Turnover and Days Sales Outstanding
h. Inventory Turnover and Days Inventory Outstanding
i. Gross Profit (Margin) Percentage
j. Net Income as a Percentage of Sales
k. P/E Ratio—you will need to find the stock price as of the balance sheet dates
Part II: Decision-Making
Use the information from Part I as well as any other relevant information to answer the two scenarios and prepare a detailed explanation for your decision-making and rationale.
1. Assume that you are the credit manager for a national bank. Both companies are seeking a significant loan (10% of total assets). Prepare a detailed memo (minimum two pages) assessing which company would you consider to be the safer credit risk and why. Fully explain the ratios used and why they are important in your assessment.
2. Assume that you are an investment
oker seeking to purchase 10% of the outstanding stock for one of the two companies. Prepare a detailed memo (minimum two pages) assessing which company’s stock would you purchase and why. Fully explain the ratios used and why they are important in your assessment.
Three pages word docments ,APA FORMAT .
Answered 1 days After Apr 02, 2023

## Solution

Khushboo answered on Apr 03 2023
Part 1
Dollar and percentage change and trend analysis
Coco Cola Inc.
Particulars
2018
2019
\$ Change
% Change
Cash
9,077
6,480
-2,597
-28.61%
Total assets
83,216
86,381
3,165
3.80%
Net Sales
34,300
37,266
2,966
8.65%
Net income
6,476
8,985
2,509
38.74%
Particulars
2019
2020
\$ Change
% Change
Cash
6,480
6,795
315
4.86%
Total assets
86,381
87,296
915
1.06%
Net Sales
37,266
33,014
-4,252
-11.41%
Net income
8,985
7,768
-1,217
-13.54%
Pepsico Inc
Particulars
2019
2019
\$ Change
% Change
Cash
8,721
5,509
-3,212
-36.83%
Total assets
77,648
78,547
899
1.16%
Net Sales
64,661
67,161
2,500
3.87%
Net income
12,559
7,353
-5,206
-41.45%
Particulars
2019
2020
\$ Change
% Change
Cash
5,509
8,185
2,676
48.58%
Total assets
78,547
92,918
14,371
18.30%
Net Sales
67,161
70,372
3,211
4.78%
Net income
7,353
7,175
-178
-2.42%
Ratio analysis
Coco Cola Inc
Ratio Name
Formula
2020
2019

Figures
Ratio
Figures
Ratio
Working capital
Cu
ent assets
19,240
4639
20,411
-6562

Cu
ent liabilities
14,601

26,973

Cu
ent ratio
Cu
ent assets
19,240
1.32
20,411
0.76

Cu
ent liabilities
14,601

26,973

Quick ratio
Liquid assets
14,058
0.96
15,146
0.56

Cu
ent liabilities
14,601

26,973

Debt ratio
Total liabilities
66,012
75.62%
65,283
75.58%

Total assets
87,296

86,381

Return on assets
Net income
7,768
8.95%
8,985
10.60%

Average total assets
86,839

84,799

Return on equity
Net income
7,768
36.66%
8,985
44.75%

Average equity
21,191

20,078

Accounts receivable turnove
Net sales
33,014
9.28
37,266
9.74

Average receivable
3,558

3,828

Days sales outstanding
365
365
39.33
365
37.49

Accounts receivable turnove
9

10

Inventory turnove
COGS
13,433
4.04
14,619
4.53

Average inventory
3,323

3,225

Days inventory outstanding
365
365
90.28
365
80.52

Inventory turnove
4

5

Gross profit margin
Gross profit
19,581
59.31%
22,647
60.77%

Net revenue
33,014

37,266

Net income margin
Net income
7,768
23.53%
...
SOLUTION.PDF