Coca vs Pepsi

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Dear Professor Triplett Further to your request, we hereby attach our report analyzing the Coca-Cola Company and PepsiCo, Inc. As outlined in your request, we have paid particular attention in our analysis to the ratios and commentaries derived from the ratios, useful information outside the annual report for investors, which company is more profitable, and preferable company stock. This report provides detailed financial ratios for Coca-Cola Company and PepsiCo, Inc. in addition to our observations of such ratios. Our analysis reveals PepsiCo, Inc is more liquid but uses a higher percentage of debt financing than The Coca-Cola Company. Therefore, The Coca-Cola Company proves more solvent than PepsiCo. However, PepsiCo uses assets more efficiently and the return on stockholders’ equity is higher than Coca-Cola. We thank you for affording us the opportunity to work with you on this project. We will be glad to discuss any questions you may have at our meeting next week. Sincerely Learning Team A A REPORT OF COCA-COLA COMPANY AND PEPSICO, INC. Submitted: May 27, 2014 Prepared by: L. BELFORT R. ARNOLD E. WATSON V. ROBINSON Executive Summary Assigned to the task of comparing financial analysis of two companies; The Coca-Cola Company and PepsiCo, Inc., team A calculated three sets of ratios to test and compare liquidity, solvency, and profitability. The ratios used to analyze liquidity: current ratio, receivables turnover, average collection period, inventory turnover, days in inventory, and current cash debt coverage. Solvency ratios include debt to total assets, times interest earned, cash debt coverage ratio, and free cash flow. To compare the profitability of the two companies the report includes the following ratios: profit margin, asset turnover, return on assets, and return on common stockholder’s equity. Significant

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