Financial Analysis Mindy Joy Mayer XACC/280 04/28/2013 Mark Detka Financial Analysis I am going to do a comparison on PepsiCo and see whether they have growth or losses to their revenues. I will also be doing a Coca-Cola comparison and show the difference from PepsiCo and Coca-Cola. There are three different ratios that will explain the financial out look for these companies and it will show if investments made are making money. The first ratio is Liquidity Ratio, which measures the short-term ability for the company to pay and to meet unexpected needs for cash. The second ratio is Profitability Ratio, which measures the income or operating success for a period of time.
Comparative Analysis Case Coca-Cola Company and PepsiCo, Inc. By Intermediate Accounting, fall 2013 Instructor: Chapter2 (a) What are the primary lines of business of these two companies as shown in their notes to the financial statements? (b) Which company has the dominant position in beverage sales? (c) How are inventories for these two companies valued? What cost allocation method is used to report inventory? How does their accounting for inventories affect comparability between the two companies?
Pepsi and Coke case: REVENUE 1a. What are the key revenue cycle accounts for Pepsi? What accounts involve “critical accounting estimates”? The Key Revenue Cycle accounts for Pepsi include: Cash and cash equivalents, Accounts and notes receivable, Net Revenue, allowance (doubtful accounts, net amounts charged for expense, deduction, others), Sales incentive (sales discounts) and other marketing spending, Distribution cost, Software cost, Commitments and contingencies, Research and development, Commitments and contingencies, and bad debt expense. Among them, critical accounting estimates includes: Sales revenue, Receivables, and sales incentive, and bad debt expense.
The company is also operating more effectively than its competitors based on management procedures, including a continuously improving quality and internal controls system. Whole Foods is also educating consumers about healthy eating and the benefits of natural and organic products. This strategy is accompanied by the company’s goals of reducing prices and costs while growing its own brand. The company’s effective strategies resulted in 2012 being the best year in the company’s 32 year history and a very positive market view on the company. Based on the complete financial statement analysis of the company, it is a reasonable prediction that Whole Foods Market, Inc. is going to remain in the position of a market leader
In addition, we used a multi-stage dividend discount model, and determined the stock’s intrinsic value to be $56.83. PepsiCo’s current price of $42.65 is lower than both our target price and its intrinsic value. This confirmed our belief that the stock was undervalued. We also analyzed the company’s management strategies, financial data, products, performance in its markets, as well as other business indicators of the health of a company. After conducting a complete analysis of the stock, we recommended: 1.
The Coca-Cola Company and PepsiCo, Inc. Comparative Analysis Case (a) What formats did these companies use to present their balance sheets? PepsiCo presents its balance sheet in its annual report as a consolidated balance sheet. Coke’s 2011 annual report only presents their balance sheet data in a small section titled “Balance Sheet Data,” in which they only include total assets and long-term debt. (b) How much working capital did each of these companies have at the end of 2011?
Executive Summary Ashley Gould, Sabrina Mcmiller, Rick Lopez, Letitia Miller ACC/280 September 13, 2011 Aaron Mitchell Executive Summary Introduction An executive summary is based upon organization of information provided from data gained in a company. PepsiCo is the company chosen to summarize. The data gathered is from the most recent annual reports found within the 2011 year. This data was broken down into 14 different parts where we identified much of the most important information gathered in different sheets used in the accounting departments. The basis from our information comes from the balance sheet, income statement sheet, and the cash flow statement sheet.
Debt to total assets, also known as simply debt ratio, is calculated by taking the total liabilities for the company divided by the total assets for the company; this information is found on the company’s balance sheet. This ratio determines the portion of debts a company has that are paid and financed through its debt. For Huffman Trucking the calculation would look like this for 2011: ($90,283+$71,365)/$267,265 = $161,648/$267,265 = 0.6048 or 60.48% (Huffman Trucking, 2013). Time interest earned, also known as interest coverage ratio, is calculated by taking the earnings before interest and tax and dividing it by interest expense; this information is found on the company’s income statement. This ratio determines the rate and ability in which the company is able to pay its debts off.
So, after business is operating, you will need to compare your actual performance (from your current financial statements) against your planned performance (from your pro forma financial statements). This financial statement analysis should be performed line item by line item. If lemonade stand had fewer sales than planned … I should know or find out why. If any costs were greater than planned again, I should know or find out why. Ever dollar received, and every dollar spent shows up on financial statements, and every dollar that is different than what you planned should be analyzed.
Sustainability Team A: ECO/415 DR. Guthlac Anyalezu University of Phoenix February 27, 2012 Sustainability Introduction: Economic Sustainability is the ability of an economy, or in the case of this paper, PepsiCo, Inc. to support a defined level of economic production indefinitely (NA, 2011). Team A will define sustainability and explain why it is important for the financial success of PepsiCo. Team A will evaluate PepsiCo and identify the company’s financial stakeholders. Team A will also describe economic and non-economic business decisions that may negatively or positively affect stakeholders. This paper will explain how these decisions may affect PepsiCo’s profits when stakeholder reactions are taken into account and identify