The Coca-Cola Company and PepsiCo, Inc. Instructions Go to the KWW website and use information found there
Question:
The Coca-Cola Company and PepsiCo, Inc.
Instructions Go to the KWW website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc.
(a) Compute the debt to total assets ratio and the times interest earned ratio for these two companies.
Comment on the quality of these two ratios for both Coca-Cola and PepsiCo.
(b) What is the difference between the fair value and the historical cost (carrying amount) of each company’s debt at year-end 2004? Why might a difference exist in these two amounts?
(c) Both companies have debt issued in foreign countries. Speculate as to why these companies may use foreign debt to finance their operations. What risks are involved in this strategy, and how might they adjust for this risk?
Step by Step Answer:
Intermediate Accounting
ISBN: 9780471448969
11th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield