University of Phoenix Coca Cola and PepsiCo Financial Reporting Comparative Analysis

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Business Finance

Complete the following deliverables:

  • The Coca-Cola/PepsiCo Comparative Analysis Case Your responses should be approximately one to two sentences for each segment (a, b, c,e).

Comparative Analysis Case

The Coca-Cola Company and PepsiCo, Inc.

The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. 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.

(a) What format(s) did these companies use to present their balance sheets?

(b) How much working capital did each of these companies have at the end of 2014? Speculate as to their rationale for the amount of working capital they maintain.

(c) What are the companies’ annual and 5-year (2010–2014) growth rates in total assets and long-term debt 2012?

(d) What were these two companies’ trends in net cash provided by operating activities over the period 2012–2014?

(e) Compute both companies’ (1) current cash debt coverage, (2) cash debt coverage, and (3) free cash flow. What do these ratios indicate about the financial condition of the two companies?

  • The Financial Reporting Problem, The Procter & Gamble Company Your responses should be approximately one to two sentences for each segment (a, b, c,).

Financial Reporting Problem

The Procter & Gamble Company (P&G)

As stated in the chapter, notes to the financial statements are the means of explaining the items presented in the main body of the statements. Common note disclosures relate to such items as accounting policies, segmented information, and interim reporting. The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online.

Instructions

Refer to P&G’s financial statements and the accompanying notes to answer the following questions.

(a) What specific items does P&G discuss in its Note 1—Summary of Significant Accounting Policies? (List the headings only.)

(b) For what segments did P&G report segmented information? Which segment is the largest? Who is P&G’s largest customer?

(c) What interim information was reported by P&G?