ACCOUNTING ANALYTICS 20 % points towards final grade COMPARING COCA COLA AND PEPSICOLA On the 10-k, describe the business of Coca Cola (4 points) On the 10-k Describe the business of Pepsicola. (4 points) On the 10-k, who is the independent auditor of Coca Cola? (2 points) On the 10-k, who is the independent auditor of Pepsicola? (2 points) How do you calculate the following ratios (actually write the down the ratio): For example: Current Ratio = Current Liabilities divided by Current Assets measuring liquidity. (10 points) a. Inventory turnover b. Days in inventory c. Accounts Receivable turnover d. Days in collection (days sales outstanding) e. Return on Assets f. Return on Equity g. Debt to Equity h. Percentage of Net Income / (loss) i. Asset Turnover Using Morningstar (http://www.morningstar.com), collect the above ratios for last five years. (2014, 2015, 2016,2017, & 2018) COCAL COLA-SYMBOL KO (9 Points) 2014 2015 2016 2017 2018 Inventory turnover Days in Inventory Accounts Receivable Days in collection Return on Assets Return on Equity Debt to Equity Percentage of Net Income/loss) Asset Turnover PEPSICOLA - SYMBOL PEP (9 Points) 2014 2015 2016 2017 2018 Inventory turnover Days in Inventory Accounts Receivable Days in collection Return on Assets Return on Equity Debt to Equity Percentage of Net Income / (loss) Asset Turnover THE ANALYSIS OF THE DATA IS WORTH 61 POINTS !!! ANALYZE EACH OF THE RATIOS (there are 9 different ratios) FOR EACH COMPANY AND THEN COMPARE THEM. THE ANALYSIS IS BASED UPON YOUR ANALYSIS From the data collected, analyze the results. For example, look at the changes in each company separately, increasing or decreasing; then compare them to each other. Which is company is doing better? 2014 2015 2016 2017 2018 Current Ratio 1.02 1.24 1.28 1.34 1.05 Coca Cola Current Ratio 1.14 1.31 1.28 1.51 0.99 Pepsi Cola From the data collected, analyze the results. For example, look at the changes in each company separately, increasing or decreasing; then compare them to each other. Which is company is doing better? 2014 2015 2016 2017 2018 Current Ratio 1.02 1.24 1.28 1.34 1.05 Coca Cola Current Ratio 1.14 1.31 1.28 1.51 0.99 Pepsi Cola What happened? Did the current ratio for Coca Cola improve or not? Is the liquidity getting better or worse? Did the current ratio of Pepsi Cola improve or not? Is the liquidity getting better or worse? Use the data to talk about what is happened. Which company has better liquidity? Using how to calculate the ratio and what the ratio measures; write something about the liquidity of the companies. Suggestion: Refer to the financial statements: income statement and balance sheet in the 10-K for the current year. You should be able to see the changes in the financial statements supporting your ratios. You may want to use EXCEL to graph the data for each of the ratios for each company. It will give use a "visual view" of the changes year to year. For inventory turnover: define what inventory turnover measures, then graph the data using EXCEL for Coca Cola and Pepsicola to see the changes, and describe the changes; compare and contrast. From your observations, additional reading, etc, add any additional information about the companies from the point of view of a consultant; would you recommend the company as an investment? Use Microsoft to write your analysis. RATIO ANALYSIS USING DATA ON MORNINGSTAR.COM 1. Type: Morningstar 2. Click: Morningstar Independent Investment Research 3. Click: Directly to Morningstar (on the upper right side of the page) 4. On the top of the page, you should see MORNINGSTARE and below type in the stock symbol of _ _and Click 5. On the page you see information the company. On your Left - Side of the page, find QUOTE and next KEY RATIOS. CLICK on KEY RATIOS 6. Right below ROA (Return on Assets) and ROE (Return on Equity), Click: FULL RATIO DATA 7. Locate the "Key Ratios" - You should see the following tabs: Profitability Growth Cash Flow Financial Health Efficiency Ratios Here is where you collect your data for the two companies. From the data, write a report on how well the companies are performing. Which company is performing better and why? Dashboard Calendar To Do Notifications Inbox Coca Cola 4/7/2020 Price 2015 2017 Pepsi Cola 47720 2015 (in million cxcept FPS) Operating Revenge i millions except EPS Operating Revme 58661 $31.56 SI.SI 15.410 50.29 41,863 SI.SI S35500 $3.40 Share outstanding Net Inc attrib to CS $6,434 S1248 56,527 Sharestanding Net Incanib tocs SI515 $3396 9.02 AR Tumeve 57000 17 $2655 40.45 Days in Collection 75% ROA Total Assets Current Liabilities LT Debe 53216 $2923 $25 364 587.896 $27,194 $31.1K2 Total Aucts Current Ladies LT Debt 579 Shes S1 LTD E Common Stock 25 par 11200 Auth7040 $1,760 $1,760 Treasury St 2772, 2781 $51.719346667 14 Equity to controlling Comm Stock Equity to non-controlling Total Equity S10 Trey Stock 458 446 Equity to controlling Comm Stock Equity t o trolling Total Equity $16.91 $2.077 $19.058 $17,072 $1.90 SIR 977 $14500 S1981 Total & Equity Total Liabilities & Equity 520223 $27.194 SIIN 520 2.00 S300 564,158 $63045.00 SR 23.00 Retained Earings Capital Surplus Accumulated Compechene Inc Treasury Stock $16.520 -512814 551,719 51.760 S16,981 56430 $15.864 S10305 36677 51.760 $17,072 PS Repurchased Retained Farming Capital Surplus Accumulated Comprehensivene Treasury Stock Como Stock 145 Long-Term Date 16844 Long-Term Debt US Dollar Notes des 2019.2095 US Dollar Dentures de 2020-2098 Euro Notes 2019-2036 Swiss Franc 2020 2028 13619 1300 2019 2020 3.9-3.15 2013.12 2022 22 5333 SU SO Other S3257 53 $1270 $16.161 Total Current LT Debt 2034472993 25364 311 $33.3 533516 52195 held Qui ric "Coca Cola is the world's largest on-alcoholic beverage company We own or license more than 500 ne-alcoholic beverage brands. We make our branded products available to consumers thropout the world through our network of independent bonding partners, distributors wholesale and retailers, as well as company weder controlled bottling and distribution operations." There are operating segments 2018. Net Operating Revenue EU, ME & Africa Pepsi Cola is a global food and b e Frine Lay Ganade. Pesi-Cola O d There are reportable operating samt Frito Lay US NA and Canada Quaker USA Canada NABY US Ganda Bev Food & Sery-La America Bev Food & Serv - Europe and Sub San Bev Food & Sery-AsiaMiddle East and include produces cereal, rice and past 2015-Net Operating Raven SI 46 52.465 512154 Africa (ESSA) Africa Asia Pacific Rolling Imustment $11.765 55,197 53,175 S01 ACCOUNTING ANALYTICS 20 % points towards final grade COMPARING COCA COLA AND PEPSICOLA On the 10-k, describe the business of Coca Cola (4 points) On the 10-k Describe the business of Pepsicola. (4 points) On the 10-k, who is the independent auditor of Coca Cola? (2 points) On the 10-k, who is the independent auditor of Pepsicola? (2 points) How do you calculate the following ratios (actually write the down the ratio): For example: Current Ratio = Current Liabilities divided by Current Assets measuring liquidity. (10 points) a. Inventory turnover b. Days in inventory c. Accounts Receivable turnover d. Days in collection (days sales outstanding) e. Return on Assets f. Return on Equity g. Debt to Equity h. Percentage of Net Income / (loss) i. Asset Turnover Using Morningstar (http://www.morningstar.com), collect the above ratios for last five years. (2014, 2015, 2016,2017, & 2018) COCAL COLA-SYMBOL KO (9 Points) 2014 2015 2016 2017 2018 Inventory turnover Days in Inventory Accounts Receivable Days in collection Return on Assets Return on Equity Debt to Equity Percentage of Net Income/loss) Asset Turnover PEPSICOLA - SYMBOL PEP (9 Points) 2014 2015 2016 2017 2018 Inventory turnover Days in Inventory Accounts Receivable Days in collection Return on Assets Return on Equity Debt to Equity Percentage of Net Income / (loss) Asset Turnover THE ANALYSIS OF THE DATA IS WORTH 61 POINTS !!! ANALYZE EACH OF THE RATIOS (there are 9 different ratios) FOR EACH COMPANY AND THEN COMPARE THEM. THE ANALYSIS IS BASED UPON YOUR ANALYSIS From the data collected, analyze the results. For example, look at the changes in each company separately, increasing or decreasing; then compare them to each other. Which is company is doing better? 2014 2015 2016 2017 2018 Current Ratio 1.02 1.24 1.28 1.34 1.05 Coca Cola Current Ratio 1.14 1.31 1.28 1.51 0.99 Pepsi Cola From the data collected, analyze the results. For example, look at the changes in each company separately, increasing or decreasing; then compare them to each other. Which is company is doing better? 2014 2015 2016 2017 2018 Current Ratio 1.02 1.24 1.28 1.34 1.05 Coca Cola Current Ratio 1.14 1.31 1.28 1.51 0.99 Pepsi Cola What happened? Did the current ratio for Coca Cola improve or not? Is the liquidity getting better or worse? Did the current ratio of Pepsi Cola improve or not? Is the liquidity getting better or worse? Use the data to talk about what is happened. Which company has better liquidity? Using how to calculate the ratio and what the ratio measures; write something about the liquidity of the companies. Suggestion: Refer to the financial statements: income statement and balance sheet in the 10-K for the current year. You should be able to see the changes in the financial statements supporting your ratios. You may want to use EXCEL to graph the data for each of the ratios for each company. It will give use a "visual view" of the changes year to year. For inventory turnover: define what inventory turnover measures, then graph the data using EXCEL for Coca Cola and Pepsicola to see the changes, and describe the changes; compare and contrast. From your observations, additional reading, etc, add any additional information about the companies from the point of view of a consultant; would you recommend the company as an investment? Use Microsoft to write your analysis. RATIO ANALYSIS USING DATA ON MORNINGSTAR.COM 1. Type: Morningstar 2. Click: Morningstar Independent Investment Research 3. Click: Directly to Morningstar (on the upper right side of the page) 4. On the top of the page, you should see MORNINGSTARE and below type in the stock symbol of _ _and Click 5. On the page you see information the company. On your Left - Side of the page, find QUOTE and next KEY RATIOS. CLICK on KEY RATIOS 6. Right below ROA (Return on Assets) and ROE (Return on Equity), Click: FULL RATIO DATA 7. Locate the "Key Ratios" - You should see the following tabs: Profitability Growth Cash Flow Financial Health Efficiency Ratios Here is where you collect your data for the two companies. From the data, write a report on how well the companies are performing. Which company is performing better and why? Dashboard Calendar To Do Notifications Inbox Coca Cola 4/7/2020 Price 2015 2017 Pepsi Cola 47720 2015 (in million cxcept FPS) Operating Revenge i millions except EPS Operating Revme 58661 $31.56 SI.SI 15.410 50.29 41,863 SI.SI S35500 $3.40 Share outstanding Net Inc attrib to CS $6,434 S1248 56,527 Sharestanding Net Incanib tocs SI515 $3396 9.02 AR Tumeve 57000 17 $2655 40.45 Days in Collection 75% ROA Total Assets Current Liabilities LT Debe 53216 $2923 $25 364 587.896 $27,194 $31.1K2 Total Aucts Current Ladies LT Debt 579 Shes S1 LTD E Common Stock 25 par 11200 Auth7040 $1,760 $1,760 Treasury St 2772, 2781 $51.719346667 14 Equity to controlling Comm Stock Equity to non-controlling Total Equity S10 Trey Stock 458 446 Equity to controlling Comm Stock Equity t o trolling Total Equity $16.91 $2.077 $19.058 $17,072 $1.90 SIR 977 $14500 S1981 Total & Equity Total Liabilities & Equity 520223 $27.194 SIIN 520 2.00 S300 564,158 $63045.00 SR 23.00 Retained Earings Capital Surplus Accumulated Compechene Inc Treasury Stock $16.520 -512814 551,719 51.760 S16,981 56430 $15.864 S10305 36677 51.760 $17,072 PS Repurchased Retained Farming Capital Surplus Accumulated Comprehensivene Treasury Stock Como Stock 145 Long-Term Date 16844 Long-Term Debt US Dollar Notes des 2019.2095 US Dollar Dentures de 2020-2098 Euro Notes 2019-2036 Swiss Franc 2020 2028 13619 1300 2019 2020 3.9-3.15 2013.12 2022 22 5333 SU SO Other S3257 53 $1270 $16.161 Total Current LT Debt 2034472993 25364 311 $33.3 533516 52195 held Qui ric "Coca Cola is the world's largest on-alcoholic beverage company We own or license more than 500 ne-alcoholic beverage brands. We make our branded products available to consumers thropout the world through our network of independent bonding partners, distributors wholesale and retailers, as well as company weder controlled bottling and distribution operations." There are operating segments 2018. Net Operating Revenue EU, ME & Africa Pepsi Cola is a global food and b e Frine Lay Ganade. Pesi-Cola O d There are reportable operating samt Frito Lay US NA and Canada Quaker USA Canada NABY US Ganda Bev Food & Sery-La America Bev Food & Serv - Europe and Sub San Bev Food & Sery-AsiaMiddle East and include produces cereal, rice and past 2015-Net Operating Raven SI 46 52.465 512154 Africa (ESSA) Africa Asia Pacific Rolling Imustment $11.765 55,197 53,175 S01