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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
28 Votes
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%
     ...
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