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QUESTION

View the 2013 Annual Reports for the Coca-Cola Company and PepsiCo, Inc., both linked here as well as on the Course Information page. Using these reports, answer the following questions:

View the 2013 Annual Reports for the Coca-Cola Company and PepsiCo, Inc., both linked here as well as on the Course Information page. Using these reports, answer the following questions:

  1. What are the primary lines of business of these two companies, as shown in their notes to the financial statements?

  2. Which company has the dominant position in beverage sales?

  3. Which company had the greater percentage increase in total assets from 2012 to 2013?

  4. Which company had more depreciation and amortization expense for 2013? Provide a rationale as to why there is a difference in these amounts between the two companies.

  5. What type of income format(s) do these two companies use? Identify any differences in income statement formats between these two companies.

  6. What are the gross profits, operating profits, and net incomes for these two companies over the 3-year period from 2011 to 2013? Which company had better financial results over this period?

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

  8. How much working capital did each company have at the end of 2013? Speculate as to their rationale for the amount of working capital they maintain.

  9. What is the most significant difference in the asset structure of the two companies? What causes this difference?

  10. What were the two companies’ trends in net cash provided by operating activities over the period from 2011 to 2013?

  11. What were the cash and cash equivalents reported by Coca-Cola and PepsiCo at the end of 2013? What does each company classify as cash equivalents?

  12. What were the accounts receivable (net) for Coca-Cola and PepsiCo at the end of 2013? Which company reported the greater allowance for doubtful accounts receivable (amount and percentage of gross receivable) at the end of 2013?

  13. What is the amount of inventory reported by Coca-Cola at December 31, 2013, and by PepsiCo at December 28, 2013? What percent of total assets does each company invest in inventory?

  14. What inventory costing methods do Coca-Cola and PepsiCo use? How does each company value its inventories?

  15. Compute and compare the inventory turnover ratios and days to sell inventory for Coca-Cola and PepsiCo for 2013. Indicate why there might be a significant difference between the two companies.

  16. What amount is reported in the balance sheets as property, plant, and equipment (net) for Coca-Cola at December 31, 2013, and for PepsiCo at December 28, 2013? What percentage of total assets does each company invest in property, plant, and equipment?

  17. What depreciation methods do Coca-Cola and PepsiCo use for property, plant, and equipment? How much depreciation did each company report in 2013, 2012, and 2011?

  18. Compute and compare the following ratios for Coca-Cola and PepsiCo for 2013: Asset turnover, profit margin on sales, and rate of return on assets.

  19. What amounts for intangible assets did Coca-Cola and PepsiCo report in their respective balance sheets? What percentage of total assets is each of these reported amounts?

  20. On what basis and over what periods of time did Coca-Cola and PepsiCo amortize their intangible assets?

  21. What were Coca-Cola’s and PepsiCo’s net revenues (sales) for the year 2013? Which company increased its revenues more (dollars and percentage) from 2012 to 2013?

  22. Are the revenue recognition policies of Coca-Cola and PepsiCo similar? Explain.

Present your assignment in a Microsoft Word document and clearly identify each lettered item to which you are responding. Part of your grade will be based on the organization of your project. Show all supporting calculations related to your responses, particularly for items c, f, h, l, m, o, p, r, s, and u. In order to clearly show quantitative responses with calculations, insert a table(s) in Word so that your completed assignment is well organized and composed of only one document for submission.

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