This weeks Discussion topic comes from CT 11.2 in your textbook. PepsiCo, Inc. financial statements are in Appendix C, and Coca-Cola Company financial statements are in Appendix C. Use their financials to answer the following questions:
(a) At December 26, 2015, what was PepsiCos largest current liability account? What were its total current liabilities? At December 31, 2015, what was Coca-Colas largest current liability account? What were its total current liabilities?
(b) Based on information contained in those financial statements, compute the following 2015 values for each company:
(1) working capital
(2) current ratio
(c) What conclusions concerning the relative liquidity of these companies can be drawn from these data?
Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013 (in millions except per share amounts) Net Revenue Cost of sales Gross profit Selling, general and administrative expenses Venezuela impairment charges Amortization of intangible assets Operating Profit Interest expense Interest income and other Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interests Net Income Attributable to PepsiCo Net Income Attributable to PepsiCo per Common Share Basic Diluted Weighted average common shares outstanding Basic Diluted Cash dividends declared per common share 2015 2014 2013 $ 63,056 $ 66,683 $ 66,415 28,384 30.884 31,243 34,672 35.799 35,172 24,885 26,126 25,357 1,359 75 92 110 8,353 9,581 9,705 (970) (909) (911) 59 85 97 7,442 8,757 8,891 1,941 2.199 2,104 5,501 6,558 6,787 49 45 47 S 5,452 $ 6,513 S 6,740 S S 3.71 $ 3.67 $ 4.31 $ 4.27 S 4.37 4.32 1,469 1,509 1,485 1,527 S 2.7625 $ 2.5325 S 1,541 1.560 2.24 See accompanying notes to the consolidated financial statements. Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 26, 2015 and December 27, 2014 (in millions except per share amounts) 2015 2014 S ASSETS Current Assets Cash and cash equivalents Short-term investments Accounts and notes receivable, net Inventories Prepaid expenses and other current assets Total Current Assets Property, plant and Equipment, net Amortizable Intangible Assets, net Goodwill Other nonamortizable intangible assets Nonamortizable Intangible Assets Investments in Noncontrolled Affiliates Other Assets Total Assets 9,096 S 2,913 6,437 2,720 1.865 23,031 16,317 1.270 14.177 11.811 25,988 2.311 750 69,667 S 6,134 2.592 6,651 3,143 2,143 20,663 17,244 1,449 14,965 12,639 27,604 2,689 860 70,509 S S 4,071 13,507 17,578 29.213 5,887 4,959 57,637 5,076 13,016 18,092 23.821 5.744 5,304 52.961 41 LIABILITIES AND EQUITY Current Liabilities Short-term obligations Accounts payable and other current liabilities Total Current Liabilities Long-Term Debt Obligations Other Liabilities Deferred Income Taxes Total Liabilities Commitments and contingencies Preferred Stock, no par value Repurchased Preferred Stock PepsiCo Common Shareholders' Equity Common stock, par value is per share (authorized 3.600 shares, issued, net of repurchased common stock at par value: 1,448 and 1,488 shares, respectively) Capital in excess of par value Retained earnings Accumulated other comprehensive loss Repurchased common stock, in excess of par value (418 and 378 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity 41 (181) (186) 24 4,076 50,472 (13,319) (29,185) 12,068 107 12,030 69,667 S 25 4.115 49,092 (10,669) (24.985) 17,578 110 17,548 70,509 S See accompanying notes to the consolidated financial statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 2015 2014 $ 7,309 8,322 15,631 4,269 3,941 2,902 2,752 3,900 33,395 12,318 3,470 4,207 12,571 5,989 6,000 11,289 854 $ 8,958 9,052 18,010 3,665 4,466 3,100 3,066 679 32,986 9,947 3,678 4,407 14,633 6,533 6,689 12,100 1,050 $ 92,023 $ 90,093 December 31, (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 $352 and $331, respectively Inventories Prepaid expenses and other assets Assets held for sale TOTAL CURRENT ASSETS EQUITY METHOD INVESTMENTS OTHER INVESTMENTS OTHER ASSETS PROPERTY, PLANT AND EQUIPMENT 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 DEFERRED INCOME TAXES THE COCA-COLA COMPANY SHAREOWNERS' EQUITY Common stock, $0.25 par value; Authorized 11,200 shares; Issued 7,040 and 7,040 shares, respectively Capital surplus Reinvested earnings Accumulated other comprehensive income (loss) Treasury stock, at cost 2,716 and 2,674 shares, respectively EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS TOTAL EQUITY TOTAL LIABILITIES AND EQUITY $ 9,660 13,129 2,677 331 1,133 26,930 28,407 4,301 4,691 $ 9,234 19,130 3,552 400 58 32,374 19,063 4,389 5,636 1,760 14,016 65,018 (10,174) (45,066) 25,554 210 25,764 $ 90,093 1,760 13,154 63,408 (5,777) (42.225 30,320 241 30,561 $ 92,023 Refer to Notes to Consolidated Financial Statements
