PepsiCo, Inc.'s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented

Question:

PepsiCo, Inc.'s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial statements, are available at each company's respective website.

Instructions
a. At December 26, 2015, what was PepsiCo's largest current liability account? What were its total current liabilities? At December 31, 2015, what was Coca-Cola's largest current liability account? What were its total current liabilities?

b. Based on information contained in those financial statements, compute the following 2015 values for each company:

1. Working capital.
2. Current ratio.

c. What conclusions concerning the relative liquidity of these companies can be drawn from these data?

d. Based on the information contained in these financial statements, compute the following 2015 ratios for each company.

1. Debt to assets.
2. Times interest earned.

e. What conclusions concerning the companies' long-run solvency can be drawn from these ratios?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...

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