The Coca- Cola Company and PepsiCo, Inc., are fierce competitors in the beverage and snack markets. A perennial question among consumers is “Coke or Pepsi”? In this case, we will be looking at the financial positions of both companies to answer the question of which company is in a stronger financial position, Coke or Pepsi.

Following is a table of various financial data and ratios for both Coca- Cola and PepsiCo. The data are arranged in alphabetic order.

Requirements
1. Rearrange the data and ratios into a report format that groups similar data and ratios together, to make it easier to analyze the data.
2. Using the given 2010– 2012 financial data for The Coca- Cola Company, discuss the company’s:
a. Ability to pay current liabilities;
b. Ability to sell inventory and collect receivables;
c. Ability to pay long- term debt; and
d. Profitability.
3. Using the given 2010– 2012 financial data for PepsiCo, Inc., discuss the company’s:
a. Ability to pay current liabilities;
b. Ability to sell inventory and collect receivables;
c. Ability to pay long- term debt; and
d. Profitability.
4. Now compare Coca-Cola’s financial position to PepsiCo’s financial position. How do the two companies compare in the following areas?
a. Ability to pay current liabilities
b. Ability to sell inventory and collect receivables
c. Ability to pay long- term debt
d. Profitability
5. What conclusions can you draw from your analysis of the two companies? Which company do you think is in a stronger financialposition?

Transcribed Image Text:

The Coca-Cola Company Selected finandal data For years ended December 31 PepsiCo, Inc. Selected financial data For years ended December 31 2010 2011 2012 2010 2011 2012 1.17 253 S 185 197S 3.91 3.92 8.45 9,0196,320 S 6,446,178 9.43% 10.10 9 Eamings per share 10 Inventory turnover 11 Net income ($in millions) 12 Rate of return on sales 13 Recevables turnover 14 Return on assets 15 Return on equity 16 Revenues (in millions 17 Times-nterest-earned ratio 18 Workng capital (S in millions) 4.03 8.78 6.00 18.75% | 10.86% 4654215-48,017- 3 11,809 33.63% 8,572 S 18.42818.78 10.93% 9.96 19.42% 42.32% 35119 15 11.70% 33.23% 11.21% 9.14% 2 8.00% 57,838 66504 11.32 28.69% 65,492 10.24 B 28.43 30.75 10.12 3071S 1214 2507S 1,677