The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online.

Instructions

Use the companies’ financial information to answer the following questions.

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 2017? Speculate as to their rationale for the amount of working capital they maintain.

c. What are the companies’ annual and 3-year (2015–2017) growth rates in total assets and long-term debt?

d. What were these two companies’ trends in net cash provided by operating activities over the period 2015–2017?

e. Compute both companies’ (1) current cash debt coverage, (2) cash debt coverage, and (3) free cash flow. What do these ratios indicate about the financial condition of the two companies?