Common Size Statements Pepsi and Coca-Cola and their Financial Ratios. -On a spreadsheet enter the income statement data and the balance sheet data for Pepsi and Coca-Cola for the past three years (2007 through 2009). Ignore Minority Interest for this exercise. Compare the two companies using common size statements for each of the three years. Assume the total current assets are correct. Then calculate the financial ratios for Pepsi and Coca-Cola for the years 2007 through 2009 and complete the key ratios for the next three years, 2007 through 2009. For Coca-Cola use 2,310,000 common shares outstanding for all three years. Pepsi uses 1,610,000 common shares outstanding for all three years. Which ratios have changed the most over the years?

 

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Income Statements Coca-Cola Pepsi 2007 2008 2009 2007 2008 2009 31,944,000 $ 11,374,000$ 43,318,000 S 39,474,000 $ 18,038,000 $ 57,512,000S Total Revenue 28,857,000$ 30,990,000 $ 43,251,000 $ 43,232,000 Operating Expenses Gross Profit Operating Expenses 10,406,000S 18,451,000S 11,088,000 $ 42,078,000 $ 20,351,000 $ 20,099,000 63,602,000 S 63,331,000 SG&A $ 11,199,000$ 11,744,000S 11,671,000 $ 14,208,000 $ 15,901,000S 15,026,000 Non Recurring 350,000 58.000 $ 43,246,000 S Other %24 64,000 $ 63,000 31,224,000 S 305.000 S 30,407,000 $ 289,000 $ 30,696,000 $ 355,000 $ 30,341,000 $ 2,040,000 $ 28,301,000 $ Inc. From Cont. Ops 7,252,000 $ 47,637,000 $ 48,242,000 67,000 Other Inc./Exp. (Net) 1,077,000 S 8,329,000 $ 456,000 $ 7,873,000 S 685,000 S 41,000 $ 43,931,000 $ 47,678,000 $ 31,529,000 $ 438,000 $ 31,091,000 S 1,632,000 $ EBIT 48,309,000 224,000 $ 43,707,000 $ 1,973,000 $ Interest Expense 329,000 S 397,000 47,912,000 47,349,000 S 1,879,000 $ 45,470,000 S Income Before Taxes Income Taxes 24 1,892,000 $ 2,100,000 Net Income 5,981,000 S 29,459,000 |S 41,734,000$ 45,812,000 Balance Sheets Assets Current Assets 4,093,000 S 215,000 S 910.000 $ 1,571,000 $ 2,064,000 $ 3,943,000 192,000 2$ 4,701,000 Ś 278,000 $ 3,090,000 $ 6,959,000 $ 2,192,000 $ 3,758,000 $ 2,354,000 $ 2,288,000 $ Cash and Equivalents Short Term Investments 213,000 $ $ 4,389,000 $ 2,290,000 S 991,000 $ 10,151,000 $ 4,475,000 | $ 11,228,000 $ Net Receivables 3,317,000 S 2,220,000 $ 4,683,000 $ 4,624,000 2,187,000 S 1,920,000 $ Inventories 2,522,000 S 2,618,000 Other Current Assets 2,260,000 S 1,324,000 S 1,194,000 12,176,000 S 5,779,000 S 8,326,000 $ 17,551,000 $ 6,755,000 $ TOTAL Current Assets 12,105,000 $ 10,806,000 $ 12,571,000 Long-term Investments 7,777,000 $ 3,998,000 S 4,484,000 Plant, Prop. & Equip. (NET) 8,493,000 S 9,561,000 $ 11,663,000 $ 12,671,000 Goodwill 4,256,000 $ 4,029,000 $ 4,224,000 $ 5,169,000 $ 5,124,000 S 6,534,000 Intangible Assets 7,963,000 | $ 8,476,000 | S 8,604,000 | $ 2,044,000 $ 1,860,000 S 2,623,000 Accumulated Amortization 1,356,000 $ 205,000 $ 34,628,000 $ Other Assets 2,675,000 $ 1,733,000 $ 1,976,000 $ 2,324,000 $ 965,000 Deferred Long-term assets 219,000 TOTAL ASSETS 43,269,000 $ 40,519,000 $ 48,671,000 $ 35,994,000 $ 39,848,000 Liabilities Current Liabilities 6,152,000 $ 6,921,000 $ 6,800,000 2$ Accounts Payable 7,173,000 $ 6,209,000 $ 6,494,000 $ 8,292,000 Short/Current Debt 6,052,000 S 6,531,000 S 369,000 $ 464,000 1,544,000 $ 7,753,000 $ 4,203,000 $ 1,924,000 $ 8,787,000 S Other Current Liab. 305,000 12,988,000 S 2.781.000 S 13,225,000 S 3,277,000 S 3,133,000 $ 1,890,000 S 13,721,000 $ 5,059,000 S 2,965,000 $ 1,580,000 | $ Total Current Liab. 8,756,000 Long-Term Debt 7.858,000 S 7,400,000 3,401,000 $ 877,000 $ 4,792,000 $ 646,000 $ Other Liabilities 7,017,000 S 5,591,000 659,000 638,000 Deferred Long-Term Debt 24 226,000 $ 547,000 23,872,000$ Minority Interests 21,525,000 $ 20,047,000 $ 17,394,000 $ 23,888,000$ TOTAL LIABILITIES 23,044,000 Stockholder's Equity Misc. Options (104,000) Redemmable PS (97,000) Preferred Stock 41,000 30,000 $ 30,638,000 $ (14,122,000) S 351,000 $ (4,694,000) $ 12,106,000 S 35,994,000 $ ৪80,000 |s 30,000 $ 28,184,000 $ (10,519,000) S 450,000 $ Common Stock 880,000 $ 38,513,000 Ś (24,213,000) s 7,966,000 $ (2,674,000) $ 20,472,000 S 40,519,000 Ş 880,000 $ 30,000 33,805,000 Retained Earnings 36,235,000 $ 41,537,000 $ Treasury Stock Capital Surplus Other Stock. Equity (23,375,000) S 7,378,000 $ 626,000 $ (25,398,000) $ 8,537,000 | $ (13,383,000) 250,000 (952,000) $ 17,234,000 S 34,628,000 $ (757,000) $ (3,794,000) TOTAL STOCKHOLDER'S EQU. 21,744,000 S 24,799,000 $ 16,804,000 TOTAL LIAB. & ST. EQUITY 43,269,000S 48,671,000 $ 39,848,000 Income Statements Coca-Cola Pepsi 2007 2008 2009 2007 2008 2009 31,944,000 $ 11,374,000$ 43,318,000 S 39,474,000 $ 18,038,000 $ 57,512,000S Total Revenue 28,857,000$ 30,990,000 $ 43,251,000 $ 43,232,000 Operating Expenses Gross Profit Operating Expenses 10,406,000S 18,451,000S 11,088,000 $ 42,078,000 $ 20,351,000 $ 20,099,000 63,602,000 S 63,331,000 SG&A $ 11,199,000$ 11,744,000S 11,671,000 $ 14,208,000 $ 15,901,000S 15,026,000 Non Recurring 350,000 58.000 $ 43,246,000 S Other %24 64,000 $ 63,000 31,224,000 S 305.000 S 30,407,000 $ 289,000 $ 30,696,000 $ 355,000 $ 30,341,000 $ 2,040,000 $ 28,301,000 $ Inc. From Cont. Ops 7,252,000 $ 47,637,000 $ 48,242,000 67,000 Other Inc./Exp. (Net) 1,077,000 S 8,329,000 $ 456,000 $ 7,873,000 S 685,000 S 41,000 $ 43,931,000 $ 47,678,000 $ 31,529,000 $ 438,000 $ 31,091,000 S 1,632,000 $ EBIT 48,309,000 224,000 $ 43,707,000 $ 1,973,000 $ Interest Expense 329,000 S 397,000 47,912,000 47,349,000 S 1,879,000 $ 45,470,000 S Income Before Taxes Income Taxes 24 1,892,000 $ 2,100,000 Net Income 5,981,000 S 29,459,000 |S 41,734,000$ 45,812,000 Balance Sheets Assets Current Assets 4,093,000 S 215,000 S 910.000 $ 1,571,000 $ 2,064,000 $ 3,943,000 192,000 2$ 4,701,000 Ś 278,000 $ 3,090,000 $ 6,959,000 $ 2,192,000 $ 3,758,000 $ 2,354,000 $ 2,288,000 $ Cash and Equivalents Short Term Investments 213,000 $ $ 4,389,000 $ 2,290,000 S 991,000 $ 10,151,000 $ 4,475,000 | $ 11,228,000 $ Net Receivables 3,317,000 S 2,220,000 $ 4,683,000 $ 4,624,000 2,187,000 S 1,920,000 $ Inventories 2,522,000 S 2,618,000 Other Current Assets 2,260,000 S 1,324,000 S 1,194,000 12,176,000 S 5,779,000 S 8,326,000 $ 17,551,000 $ 6,755,000 $ TOTAL Current Assets 12,105,000 $ 10,806,000 $ 12,571,000 Long-term Investments 7,777,000 $ 3,998,000 S 4,484,000 Plant, Prop. & Equip. (NET) 8,493,000 S 9,561,000 $ 11,663,000 $ 12,671,000 Goodwill 4,256,000 $ 4,029,000 $ 4,224,000 $ 5,169,000 $ 5,124,000 S 6,534,000 Intangible Assets 7,963,000 | $ 8,476,000 | S 8,604,000 | $ 2,044,000 $ 1,860,000 S 2,623,000 Accumulated Amortization 1,356,000 $ 205,000 $ 34,628,000 $ Other Assets 2,675,000 $ 1,733,000 $ 1,976,000 $ 2,324,000 $ 965,000 Deferred Long-term assets 219,000 TOTAL ASSETS 43,269,000 $ 40,519,000 $ 48,671,000 $ 35,994,000 $ 39,848,000 Liabilities Current Liabilities 6,152,000 $ 6,921,000 $ 6,800,000 2$ Accounts Payable 7,173,000 $ 6,209,000 $ 6,494,000 $ 8,292,000 Short/Current Debt 6,052,000 S 6,531,000 S 369,000 $ 464,000 1,544,000 $ 7,753,000 $ 4,203,000 $ 1,924,000 $ 8,787,000 S Other Current Liab. 305,000 12,988,000 S 2.781.000 S 13,225,000 S 3,277,000 S 3,133,000 $ 1,890,000 S 13,721,000 $ 5,059,000 S 2,965,000 $ 1,580,000 | $ Total Current Liab. 8,756,000 Long-Term Debt 7.858,000 S 7,400,000 3,401,000 $ 877,000 $ 4,792,000 $ 646,000 $ Other Liabilities 7,017,000 S 5,591,000 659,000 638,000 Deferred Long-Term Debt 24 226,000 $ 547,000 23,872,000$ Minority Interests 21,525,000 $ 20,047,000 $ 17,394,000 $ 23,888,000$ TOTAL LIABILITIES 23,044,000 Stockholder's Equity Misc. Options (104,000) Redemmable PS (97,000) Preferred Stock 41,000 30,000 $ 30,638,000 $ (14,122,000) S 351,000 $ (4,694,000) $ 12,106,000 S 35,994,000 $ ৪80,000 |s 30,000 $ 28,184,000 $ (10,519,000) S 450,000 $ Common Stock 880,000 $ 38,513,000 Ś (24,213,000) s 7,966,000 $ (2,674,000) $ 20,472,000 S 40,519,000 Ş 880,000 $ 30,000 33,805,000 Retained Earnings 36,235,000 $ 41,537,000 $ Treasury Stock Capital Surplus Other Stock. Equity (23,375,000) S 7,378,000 $ 626,000 $ (25,398,000) $ 8,537,000 | $ (13,383,000) 250,000 (952,000) $ 17,234,000 S 34,628,000 $ (757,000) $ (3,794,000) TOTAL STOCKHOLDER'S EQU. 21,744,000 S 24,799,000 $ 16,804,000 TOTAL LIAB. & ST. EQUITY 43,269,000S 48,671,000 $ 39,848,000

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