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CheckPoint Ratio, Vertical, and Horizontal Analyses The

Resolved Question:

Examine PepsiCo, Inc.’s Consolidated Balance Sheet on p. A6 in Appendix A of Financial Accounting, especially its Current Assets, Current Liabilities, and Total Assets for years 2005 and 2004. ·

Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

December 31, 2005 and December 25, 2004

(in millions except per share amounts) 2005 2004

ASSETS

Current Assets

Cash and cash equivalents.................................................................................................................................. $ 1,716 $ 1,280

Short-term investments ....................................................................................................................................... 3,166 2,165

4,882 3,445

Accounts and notes receivable, net....................................................................................................................... 3,261 2,999

Inventories............................................................................................................................................................ 1,693 1,541

Prepaid expenses and other current assets........................................................................................................... 618 654

Total Current Assets ...................................................................................................................................... 10,454 8,639

Property, Plant and Equipment, net .................................................................................................................... 8,681 8,149

Amortizable Intangible Assets, net...................................................................................................................... 530 598

Goodwill................................................................................................................................................................ 4,088 3,909

Other nonamortizable intangible assets................................................................................................................ 1,086 933

Nonamortizable Intangible Assets.................................................................................................................. 5,174 4,842

Investments in Noncontrolled Affiliates .............................................................................................................. 3,485 3,284

Other Assets ........................................................................................................................................................ 3,403 2,475

Total Assets............................................................................................................................................... $31,727 $27,987

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Short-term obligations ......................................................................................................................................... $ 2,889 $ 1,054

Accounts payable and other current liabilities...................................................................................................... 5,971 5,599

Income taxes payable........................................................................................................................................... 546 99

Total Current Liabilities ................................................................................................................................. 9,406 6,752

Long-Term Debt Obligations................................................................................................................................ 2,313 2,397

Other Liabilities ................................................................................................................................................... 4,323 4,099

Deferred Income Taxes....................................................................................................................................... 1,434 1,216

Total Liabilities............................................................................................................................................... 17,476 14,464

Commitments and Contingencies

Preferred Stock, no par value ............................................................................................................................. 41 41

Repurchased Preferred Stock............................................................................................................................ (110) (90)

Common Shareholders' Equity

Common stock, par value 1 2/3¢ per share (issued 1,782 shares)....................................................................... 30 30

Capital in excess of par value.............................................................................................................................. 614 618

Retained earnings ................................................................................................................................................ 21,116 18,730

Accumulated other comprehensive loss ................................................................................................................ (1,053) (886)

20,707 18,492

Less: repurchased common stock, at cost (126 and 103 shares, respectively) ................................................... (6,387) (4,920)

Total Common Shareholders' Equity .............................................................................................................. 14,320 13,572

Total Liabilities and Shareholders' Equity ................................................................................................ $31,727 $27,987

See accompanying notes to consolidated financial statements.

Calculate the following for PepsiCo, Inc. and show your work:

o The Current Ratio for 2005 o The Current Ratio for 2004

o Two measures of vertical analysis—for example, compute the current assets divided by total assets for each year, and express your result as a percentage

o Two measures of horizontal analysis—for example, compute the total change in assets by percentage, by dividing current assets in 2005 by current assets in 2004.

Examine The Coca-Cola Company's Consolidated Balance sheet on p. B2 in Appendix B of Financial Accounting, especially its Current Assets, Current Liabilities, and Total Assets for years 2005 and 2004.

B2 Appendix B Specimen Financial Statements: The Coca-Cola Company

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

December 31, 2005 2004

(In millions except par value)

ASSETS

CURRENT ASSETS

 

Cash and cash equivalents $ 4,701 $ 6,707

Marketable securities 66 61

Trade accounts receivable, less allowances of $72 and $69, respectively 2,281 2,244

Inventories 1,424 1,420

Prepaid expenses and other assets 1,778 1,849

TOTAL CURRENT ASSETS 10,250 12,281

INVESTMENTS

 

Equity method investments:

Coca-Cola Enterprises Inc. 1,731 1,569

Coca-Cola Hellenic Bottling Company S.A. 1,039 1,067

Coca-Cola FEMSA, S.A. de C.V. 982 792

Coca-Cola Amatil Limited 748 736

Other, principally bottling companies 2,062 1,733

Cost method investments, principally bottling companies 360 355

TOTAL INVESTMENTS 6,922 6,252

OTHER ASSETS 2,648 2,981

PROPERTY, PLANT AND EQUIPMENT - net 5,786 6,091

TRADEMARKS WITH INDEFINITE LIVES 1,946 2,037

GOODWILL 1,047 1,097

OTHER INTANGIBLE ASSETS 828 702

TOTAL ASSETS $ 29,427 $ 31,441

LIABILITIES AND SHAREOWNERS' EQUITY

CURRENT LIABILITIES

 

Accounts payable and accrued expenses $ 4,493 $ 4,403

Loans and notes payable 4,518 4,531

Current maturities of long-term debt 28 1,490

Accrued income taxes 797 709

TOTAL CURRENT LIABILITIES 9,836 11,133

LONG-TERM DEBT 1,154 1,157

OTHER LIABILITIES 1,730 2,814

DEFERRED INCOME TAXES 352 402

SHAREOWNERS' EQUITY

 

Common stock, $0.25 par value; Authorized - 5,600 shares;

Issued - 3,507 and 3,500 shares, respectively 877 875

Capital surplus 5,492 4,928

Reinvested earnings 31,299 29,105

Accumulated other comprehensive income (loss) (1,669) (1,348)

Treasury stock, at cost - 1,138 and 1,091 shares, respectively (19,644) (17,625)

TOTAL SHAREOWNERS' EQUITY 16,355 15,935

TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $ 29,427 $ 31,441

  • Calculate the following for Coca-Cola and show your work:

 

o The Current Ratio for 2005

o The Current Ratio for 2004

o Two measures of vertical analysis-for example, compute the current assets divided by total assets for each year, and express your result as a percentage

o Two measures of horizontal analysis-for example, compute the total change in assets by percentage, by dividing current assets in 2005 by current assets in 2004. Compute a similar percentage for current liabilities

 

Submitted: 5 years ago.
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