This week’s Discussion topic comes from CT 11.2 in your textbook. PepsiCo, Inc. financial statements are in Appendix C, and Coca-Cola Company financial statements are in Appendix C. Use their financials to answer the following questions:

(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?

  
 

Transcribed Image Text:

Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013 (in millions except per share amounts) 2015 2014 2013 Net Revenue S 63,056 S 66,683 S 66,415 Cost of sales 28,384 30,884 31,243 34,672 35,172 Gross profit Selling, general and administrative expenses Venezuela impairment charges Amortization of intangible assets Operating Profit Interest expense 35,799 24,885 26,126 25,357 1,359 75 92 110 8,353 9.581 9,705 (970) (909) (911) Interest income and other 59 85 97 Income before income taxes 7,442 8,757 8,891 Provision for income taxes 1,941 2,199 6,558 2,104 Net income 5,501 6,787 Less: Net income attributable to noncontrolling interests Net Income Attributable to PepsiCo Net Income Attributable to PepsiCo per Common Share 49 45 47 5,452 $ 6,513 $ 6,740 Basic 3.71 S 4.31 S 4.37 Diluted 3.67 S 4.27 S 4.32 Weighted-average common shares outstanding Basic 1,469 1,509 1,541 Diluted 1,485 1,527 1,560 Cash dividends declared per common share 2.7625 $ 2.5325 S 2.24 See accompanying notes to the consolidated financial statements. Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013 (in millions except per share amounts) 2015 2014 2013 Net Revenue S 63,056 S 66,683 S 66,415 Cost of sales 28,384 30,884 31,243 34,672 35,172 Gross profit Selling, general and administrative expenses Venezuela impairment charges Amortization of intangible assets Operating Profit Interest expense 35,799 24,885 26,126 25,357 1,359 75 92 110 8,353 9.581 9,705 (970) (909) (911) Interest income and other 59 85 97 Income before income taxes 7,442 8,757 8,891 Provision for income taxes 1,941 2,199 6,558 2,104 Net income 5,501 6,787 Less: Net income attributable to noncontrolling interests Net Income Attributable to PepsiCo Net Income Attributable to PepsiCo per Common Share 49 45 47 5,452 $ 6,513 $ 6,740 Basic 3.71 S 4.31 S 4.37 Diluted 3.67 S 4.27 S 4.32 Weighted-average common shares outstanding Basic 1,469 1,509 1,541 Diluted 1,485 1,527 1,560 Cash dividends declared per common share 2.7625 $ 2.5325 S 2.24 See accompanying notes to the consolidated financial statements.

Answer rating: 100% (QA)

Ans a Pepsico 2015 Largest current liability Accounts payable other current liabil... View the full answer