Question

I need help with research and comparing two companies’ financial statements.

I need to complete the following steps:

Download Coca-Cola and PepsiCo financial statements for the year 2019.

Based on the information in the financial statements and what you have found through doing research about the company, determine the following for both companies:

• Growth

• Profitability

• Financial health

• Price ratios

• Management effectiveness

In a report, provide an evaluation of the following:

• Liquidity

• Solvency

• Profitability

for each company, relative to each other and to industry averages.

Answer 1

Comparison Consolidated PNL-Coca-Cola Company
Year 2019- 3 Months Ended	Dec312018	Dec312019
Source - Audited Financial Statement
Net Revenue	7,806	9,068
Cost of Sales	3,102	3,566
Gross Profit	4,704	5,502
Gross Profit %	60%	61%
Selling & General and Admin cost	2,716	3,224
other Operating charges	163	114
Operating Profit	1,825	2,164
Operating Profit %	23%	24%
Interest Expenses	253	235
Interest Income	179	135
Consolidated Net Profit	927	2,420

Analysis 0f Coca Cola Financial health – 31^st Dec 2019 Quarter revenue growth established 16% as compared with 31^st Dec 2018 . Operating Income also increase by 19% in 31^st Dec 2019 vs 31^st Dec 2018 . Another good pijnt is 4^th Quarter EPS growth improved by 134%

Cash flow from Operation full year $ 10.5 Billion u by 37% Full year Free cash flow $ 8.4 Billion

From Cash flow point – Company is keep on Purchasing of Investment as well as sale of Investment to maintain cash inflow and outflow under control . Company on Yearly basis paying divided of good amount . Company keep on Investing money relates to Acquisition of business entity Plus capex so secure future revenue growth and maintain Operating Margin around 24%+ and Net Margin also at high level

Couple of major Point to highlight in current Quarter Dec’19 – from Impact analysis , Gross Margin expanded by 220 bps driven by positive segment Mix . Acquisition of lower margin finished goods business off Costa and CHI impacted Gross Margin .The structural impact was primarily due to teh purchase of Philippine bottling Operation

With good revenue growth , well managed cost and maintain Operating margin with lot of acquisition of business and maintain Free Cash flow . Company at present maintain solvency ratio,maintain EPS growth is fantastic

Pepsi co Quarterly analysis –

As compared with 30^th Sep 2019 , current Quarter Q4 ’19 revenue has increased . Company maintain Gross Margin at 54%+ which is almost in consistent on Quarter Over Quarter basis . In the current Quarter , Operating margin is slightly drop approx 3% as compared with last Quarter . Same implied in case of EBIT margin . Bit Good point to note that company constantly maintain EBIT margin on QoQ basis approx 12% +

Definitely Net Profit margin dropped by 4% . This Quarter company established Single digit net Profit margin growth . This is little concern for Pepsi co , which they need to improve in near future

Company keep on maintaining good leverage in relates to ROA ( 2,22636 ) in the current Quarter + ROI 4.0394

Another excellent part is that Company is keep on paying Dividend ( $4 to $ 5 billion )

Company reduced significantly “ Net Long term debt “ in the current Quarter , which is really excellent . Company overall well managing Cash flow on QoQ basis

Overall level Pepsi is one of the giant company with String and healthy balance sheet with high Asset and maintain Working capital Management , maintain robust Free cash flow ,