Instructions

Problem $--$ Common Size Statements Pepsi and Coca$-$Cola and their Financial Ratios

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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. For Pepsi use $1,610,000$ common shares outstanding for all three years. Which ratios have changed the most over the years? For the Income Statement and Balance Sheet, use the information from Yahoo and use only the revenues and expenses from Yahoo and calculate the EBIT and Net Income from the provided numbers. You will have a difference with the reported Net Income in Yahoo. For Inventory, Turnover use the operating expenses as the cost of goods sold.