Comparative Analysis Case: The Coca$-$Cola Company and PepsiCo, Inc.

Obtain the $2020$ financial statements of Coca$-$Cola and PepsiCo. 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.

What specific items does Coca$-$Cola discuss in its Note $1-$Accounting Policies? $($Prepare a list of the headings only.$)$

What specific items does PepsiCo discuss in its Note $2-$Our Summary of Significant Accounting Policies?

$($Prepare a list of the headings only.$)$

For what lines of business or segments do Coca$-$Cola and PepsiCo present segment information?

Note and comment on the similarities and differences between the auditors' reports submitted by the independent auditors of Coca$-$Cola and PepsiCo for the year $2020.$

Calculate the current ratio, acid$-$test ratio, Times interest earned, profit margin on sales, Asset turnover, and Inventory turnover for the two companies.

Explain the analytical use of each of the six ratios, describing what investors can learn about the companies' financial stability and operating efficiency.

Identify two limitations of your ratio analysis.