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Interpreting Financial Statements

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Interpreting Financial Statements BYP13-4 The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Selected data from the 2004 consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc., are presented here (in millions). Coca-Cola PepsiCo Total current assets $ 12,094 $ 8,639 Total current liabilities $ 10,971 $ 6,752 Net sales $ 21,962 $ 29,261 Cost of goods sold $ 7,638 $ 13,406 Net income $ 4,847 $ 4,212 Average (net) receivables for the year $ 2,131 $ 2,915 Average inventories for the year $ 1,336 $ 1,477 Average total assets $ 29,335 $ 26,657 Average common stockholders’ equity $ 15,013 $ 12,734 Average current liabilities $ 9,429 $ 6,584 Average total liabilities $ 14,322 $ 27,917 Total assets $ 31,327 $27,987 Total liabilities $ 15,392 $ 14,464 Income taxes $ 1,375 $ 1,372 Interest expense $ 196 $ 167 Cash provided by operating activities $ 5,968 $ 5,054 Capital expenditures $ 755 $ 1,387 Cash dividends $ 2,429 $ 1,329 Instructions (a) Compute the following liquidity ratios for 2004 for Coca-Cola and for PepsiCo and comment on the relative liquidity of the two competitors. (1) Current ratio. (4) Inventory turnover. (2) Receivables turnover. (5) Days in inventory. (3) Average collection period. (6) Current cash debt coverage. • Complete comparison and contrast of a 200-300 summary, describing the liquidity ratio of Coca-Cola versus Pepsi Co. based upon items in section a 1, 2, and 3 after the computation has been completed. • • . Write an Executive Summary • o The executive summary will rarely be more than one page in length, and should not contain subheadings, direct quotes or unnecessary descriptive information. It should also be single-line spaced. It should contain a brief statement of the following:  the purpose (objectives) and scope of the report  the type of analysis conducted (and methods used)  the most important and significant findings, in summary form  the most important and significant recommendations. o It should be a ‘stand-alone’ document that encompasses the important points of the report it accompanies. Table 4.1 provides a guide to the approximate length of the executive summary. (200-300) words Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help

Interpreting Financial Statements

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