Pepsi Coke Case

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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? What causes this difference? Working capital = current assets – current liabilities. The book’s companion website does not provide all of the balance sheet information for Coca-Cola, so the following information is from the Coca-Cola’s annual report found on their website. At the end of 2011, PepsiCo’s working capital was ($713) million, while Coca-Cola’s working capital was $1,214 million. This indicates that Coca-Cola had enough short-term assets to cover its short-term debt, while PepsiCo did not. PepsiCo is not working as efficiently as Coca-Cola is, causing slower collection. (c) What is the most significant difference in the asset structure of the two companies? What causes this difference? The most significant different in the asset structure of these two companies is the percentage that their current assets are of their total assets. Coca-Cola’s 2011 current assets total to $25,497 million and their total assets total to $79,974 million. Their current assets are about 32% of their total assets. On the other hand, PepsiCo’s 2011 current assets total to $17,441 million and their total assets total to $72,882. Their current assets are only about 23% of their total assets. While their total assets are about equal, PepsiCo has significantly less current assets than Coca-Cola that they plan to convert to cash, sell, or consume in their operating cycle. (d) What are

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