Description
Instructions
Financial Analysis
For this assignment, you will apply what you have learned thus far from the unit lessons and required unit resources.
You will conduct a financial analysis of the Coca-Cola Company and PepsiCo. Write a five-page paper that evaluates each firm, and provide your findings and recommendation for investment or employment.
Your paper should consist of the components listed below.
- Provide a company overview for both companies, which should be one page in length.
- Include a comparison of three accounting methods (i.e., receivables, depreciation, and inventory valuation), which should be one page in length (formatted either as a table or an outline).
- Provide four ratio calculations (i.e., one ratio each for liquidity, solvency, profitability, and market) as well as an analysis, which should be two pages in length.
- Include your recommendations and conclusions, which should be one page in length.
You are encouraged to utilize the resources below to support your findings.
PepsiCo. (2019). 2018 PepsiCo annual report. https://www.pepsico.com/docs/album/annual-reports/...
U.S. Securities and Exchange Commission. (2019). Form 10-K: The Coca-ColaCompany (Commission File No. 001-02217). https://www.coca-colacompany.com/content/dam/journey/us/en/policies/pdf/shareowner-services/2018-annual-report-on-form-10-K.pdf
You may submit an appendix with any research you conducted—beyond the companies’ most recent 10-Ks—to support your analyses and recommendations. Your paper should include appropriate reference citations.
Write your responses in a Word document, and include at least two resources to support your findings. Adhere to APA Style when creating citations and references for this assignment.
Explanation & Answer
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Running Head: FINANCIAL ANALYSIS
Financial Analysis
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FINANCIAL ANALYSIS
Financial Analysis
Overview of the Two Companies
The two companies in focus include the Coca-Cola Company and PepsiCo. Coca-Cola
Company is a U.S based Multinational Corporation headquartered in Atlanta, Georgia. The
company manufactures, retails, markets and distributes nonalcoholic beverages, syrups and
concentrates. The organization's primary product has been Coca-Cola, which was invented by
John Stitch Pemberton, a practicing pharmacist in Atlanta, Georgia, around 1886. To date, The
Coca-Cola Company has over 500 brands under its ownership, together with over 3500
beverages globally. Over the years, the Atlanta based company has grown and currently ranks
as100th in the list of fortune 500 by total revenue. One major success factor of the company has
been its market penetration ability. The company's products can be traced to virtually every
village in the world. According to the SEC 10-k Report of 2019, the organization did financially
well in the period covering 2017 to 2019. This saw it close with an annual net profit of $3.26
billion, which marked an increase from its previous yearly net profit of $2.59 billion (U.S.
Securities and Exchange Commission, 2019). It trades in NYSE as KO.
In this article, we also consider a brief overview of PepsiCo. The company specializes in
beverages, food, and snacks. Since its formation in 1965, the organization has grown
tremendously and expanded. It currently provides direct employment opportunities to over 270
000 individuals across the globe. As of 2019, PepsiCo ranked 48th in the Fortune 500, with total
revenue of $ 66 billion. The corporation enjoys a wide range of product diversification (food,
snacks, and beverages) compared to some of its immediate competitors such as Coca Cola, Red
Bull GmbH, DPSG, Monster Beverage Corporation, and The Kraft Heinz among others. Like
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FINANCIAL ANALYSIS
Coca Cola, PepsiCo has penetrated villages with its low priced products, thus explaining its
popularity among low-income households (PepsiCo., 2018).
Accounting Methods
Through accounting methods such as receivables, depreciation, and inventory valuation,
the following table compares the financial position of Coca Cola Company and PepsiCo at the
end of 2018.
Coca Cola & PepsiCo Accounts Receivables 2018 (amounts in millions)
Allowance for
Allowance for
Net A/R
Doubtful Accounts
Doubtful Debts %
PepsiCo
$ 286
9.24%
$ 6,...
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