Exercise 115 [Financial]

Write a report analyzing the most recent financial aspects of a publicly traded company of your choice (Coca-Cola 2016 and Pepsico 2015&2016). Include an analysis of (1) liquidity, (2) profitability, (3) productivity, and (4) debt management. Compare the Y2016 balance sheet of Coca-Cola & Pepsico, and Y2015 & Y2016 balance sheet of Coca-Cola through the financial ratio below. If your analysis uncovers any problems, include recommendations on how they may be overcome.

Assume you are preparing the report for Cindy Baer, the president of the company you are analyzing. Ms. Baer is knowledgeable about business and her companys industry but does not have a strong background in accounting.

Liquidity Ratio

Current Ratio

Quick Ratio

Cash Ratio

Productivity Ratio

Inventory Turnover

Inventory Period (Days)

Account Receivable Turnover

Debt Management Ratio

Debt to Total Assets Ratio

Debt to Equity ratio

Equity Multiplier

Long-Term Debt to Assets Ratio

Long-Term Debt to Equity Ratio

Times interest earned (TIE) Ratio

Cash Coverage Ratio

Price to Book Value

Profitability Ratio

ROA

ROE

ROI

THE COCA COLA COMPANY AND SUBSIDLARIES CONSOLIDATED BALANCE SHEETS December 3 In millions except par value) ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Marketable securities Trade accounts receivable, less allowances of $466 and $352, respectively Inventories Prepaid expenses and other assets Assets held for sale TOTAL CURRENT ASSETS EQUITY METHOD INVESTMENTS OTHER INVESTMENTS OTHER ASSETS PROPERTY, PLANT AND net TRADEMARKS WITH INDEFINITE LIVES BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES GOODWILL OTHER INTANGIBLE ASSETS TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses Loans and notes payable Current maturities of long-term debt Accrued income taxes. Liabilities held for sale TOTAL CURRENT LIABILITIES LONG- TERM DEBT OTHER LIABILITIES DE stock, $0.25 par value: Authorized 11,200 shares Common Issued 7,040 and 7,040 shares, respectively Capital surplus Reinvested earnings Accumulated other comprehensive income (oss) Treasury stock, at cost 2,752 and 2,716 shares, respectively EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS TOTAL EQUITY TOTAL LIABILITIES AND EQUITY Refer to Notes to Consolidated Financial Statements. 2016 2015 8,555 7,309 9,595 8,322 18,150 15.631 4,051 4.269 3,856 3.941 2,675 2,902 2,481 2,752 2.797 3.900 34,010 33,395 16,260 12.318 989 3,470 4,248 4,110 10,635 12,571 6.097 5.989 3.676 6.000 10,629 11.289 726 854 87,270 89.996 9,490 9.660 12,498 13.129 3,527 2,676 307 331 710 1.133 26,532 26,929 29,684 28.311 4,081 4,30 3,753 4.69 1.760 1.760 14,993 14,016 65,502 65,018 (10,174) (11,205) (45,066) (47,988) 23,062 25.554 158 210 23,220 25,764 87,270 89.996