You will assume the role of a financial analyst and be creating a full analysis between Coca-Cola

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You will assume the role of a financial analyst and be creating a full analysis between Coca-Cola and PepsiCo. Ensure that you fully explain all calculations and that you answer each and every question thoroughly. Click below to download the annual reports for 2016.

Coca Cola Financial Statement 2016

http://www.coca-colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/unknown/unknown/form_10K_2016.pdf

PepsiCo Financial Statement 2016

https://www.pepsico.com/docs/album/annual-reports/PEP_AR11_2016_Annual_Report.pdf

What are the primary lines of business of these two companies as shown in their notes to the financial statement?

Which company has the dominant position in beverage sales?

What are the gross profits, net income, EBIT, EBITDA and free cash flow (FCF) for these two companies?

Compute both companies'

Current ratio

Quick ratio

Total debt ratio

Debt-equity ratio

Total asset turnover

Inventory turnover

Day’s sales in inventory

Profit margin on sales

Return on assets

Return on equity fully explain what each ratio is telling you.

Specifically, after calculating the ratios, explain what the ratio is telling you about the company and compare/contrast with the other company. For example, when discussing the day’s sales in inventory and inventory turnover, indicate why there might be a significant difference between the two companies.

What ratios do each of these companies use in the Management's Discussion and Analysis section of the annual report to explain their financial condition related to debt financing?

Below is what i have, is there any way to get more detail into the analysis? I need to stretch this out with multiple pages. Can i get an explanation of the charts? Someone gave me this answer already twice, i just need help with more explanation please!!

Primary lines of Business

Coca Cola- Primary line of business of Coca Cola is to license and market non-alcoholic beverages mainly sparkling water and some sparkling water as well as still drinks like juices and mineral waters.

Pepsi - Primary line of business is to sell salty, convenient and sweet and grain based snacks along with non-alcoholic beverages, dairy products and other food products.

Dominant position in beverages

Coca Cola has dominant position in beverage sales as mentioned in their annual report. The sell four out of top five beverages in the world.

Profits for companies

$M	COCA COLA	PEPSI
GROSS PROFIT	$ 28,236	$34,911
EBITDA	$10,796	$9,766
EBIT	$10,154	$9,633
NET PROFIT	$8,634	$6443
FCF	$8,555	$8,834

Ratios for the company

	Coca Cola	Pepsi
Current Ratio (CA/Cl)	1.05	0.96
Quick ratio (Ca-Cash/CL)	0.48	0.74
Total Debt Ratio (TD/Equity)	19.6%	37%
Debt to Equity (TD/Equity)	0.49	1.28
Total Asset turnover (Total Asset/Sales)	1.72	1.10
Inventory turnover (Sales/Inventory)	15.1	17.4
Days sales Inventory (Inventory / COGS* 365)	62	44
Profit Margin on Sales (NI/Sales)	18.4%	9.7%
Return on Assets (NI/Total Assets)	10.7%	8.9%
Return on Equity (NI/Equity)	26.9%	31%

Current Ratio tells us about the level of current assets funded by current liabilities. IF the current assets exceed current liabilities to a large extent then it may lead to lock in of the capital whereas if the ratio is very low due to high current liabilities which may show that company might face problems in meeting its short term liabilities.

Current ratio of Coca Cola is greater than 1 while for Pepsi the ratio is marginally lower than 1. Thus none of the company has a lot of capital stuck in working capital or will face problems in meeting its short term requirements.

Quick ratio is a ratio similar to the current ratio deducting cash from the current assets. IT tell us about the liquidity position of the company. For Pepsi the ratio is higher than coca cola which is an indication that coca cola has more of cash as part of current assets while Pepsi has less of cash as part of current assets.

Total debt /Total Assets is an indicator of the part of the assets funded by interest bearing debt. It shows the leverage level of the company. In this case Pepsi has a larger portion of its assets funded by debt as compared to Coca Cola.

Debt to Equity is a ratio which indicates the leverage of the company i.e. funding structure of the company i.e. debt or equity. In case of Pepsi the Debt to equity ratio is 1.28 while for Coca Cola it is 0.49. Thus Pepsi has more leverage on its balance sheet as compared to Coca Cola.

Total Asset Turnover is the ratio which shows the capability of the company to utilize its asset to produce sales. Coca Cola has a higher ratio which means that for each dollar of asset used Coca Cola can generate more revenue.

Inventory turnover is similar to the asset turnover i.e. the capability of the company to turn Inventory into revenue which is higher for Pepsi i.e. Pepsi can convert the inventory into sales at levels better than Coca Cola.

Day sales inventory is an indicator of how many days the product remains in inventory. For Coca Cola it takes 62 days to get the product out of inventory while for Pepsi 44 days.

Return on equity for the company is an indicator of the return on the equity invested. Pepsi has a higher return on equity than Coca Cola so an equity investor in Pepsi earns more than in Coca Cola.

Profit Margin for Coca Cola is double that of Pepsi which means for each dollar of revenue Coca Cola can earn double of what Pepsi can earn on the dollar.