Compare and analyze ratios of
the two companies. The two companies are in the same industry.
Homework Answers
Fixed asset turnover
The fixed asset turnover ratio is an efficiency ratio that measures a companies return on their investment in property, plant, and equipment by comparing net sales with fixed assets. In other words, it calculates how efficiently a company is a producing sales with its machines and equipment.
A high turn over indicates that assets are being utilized efficiently and large amount of sales are generated using a small amount of assets.
A low turn over, on the other hand, indicates that the company isn’t using its assets to their fullest extent.
Therefore Pepsi (3.7)uses its fixed assets better than coca-cola (3.5)
Formula = Net sales / (Fixed Assets-Accumulated Depreciation)
Account Receivable Turnover Ratio
Accounts receivable turnover is the number of times per year that a business collects its average accounts receivable. The ratio is used to evaluate the ability of a company to efficiently issue credit to its customers and collect funds from them in a timely manner.
A high turnover ratio indicates a combination of a conservative credit policy and an aggressive collections department, as well as a number of high-quality customers.
A low turnover ratio represents an opportunity to collect excessively old accounts receivable that are unnecessarily tying up working capital.
Therefore company A has conservative credit policy (8.39) against company B which is only (8.26)
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Compare and analyze ratios of
the two companies. The two companies are in the same industry....
Accountancy
Coca Cola vs Pepsi ColaThe above chart reflects the inventory turnover for Coca Cola (in blue) and Pepsi Cola (in red) for 2014 through 2018. The inventory turnover is calculated by dividing the cost of goods sold (or sales) by the average inventory. It is a measure of the speed at which inventory is sold. The ratio for Coca Cola fell between 5.61 in 2014 and 4.34 in 2018. The average inventory turnover value for Coca Cola over the five-year...
PA13-5 Interpreting Profitability, Liquidity, Solvency, and P/E Ratlos [LO4, L05] Coke and Pepsi are well-known international...
PA13-5 Interpreting Profitability, Liquidity, Solvency, and P/E Ratlos [LO4, L05] Coke and Pepsi are well-known international brands. Coca-Cola sells more than $35 billion worth of beverages each year while annual sales of Pepsi products exceed $43 billion. Compare the two companies as a potential investment based on the following ratios: Coca PepsiCo Cola Pepsico Ratio Gross profit percentage Net profit margin Return on equity EPS Receivables turnover ratio Inventory turnover ratio Current ratio Debt-to-assets P/E ratio 63.9% 33.6% 37.7% $5.06...
Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the pr...
Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Coca-Cola Fiscal Year Ended: 2015 2014 2013 Net Sales $44,300 $46,000 $46,800 Accounts Receivable 4,290 4800 4,930 Allowance for Doubtful Accounts 350 330 60 Accounts Receivable, Net of Allowance...
analysis each line for the two companies and the industry figures 21 to 26 RATIOS ANALYSIS...
analysis each line for the two companies and the industry figures 21 to 26 RATIOS ANALYSIS 21) Payout Ratio 0.02% 0 12.60% 22) Revenue/Employee 475.72K 389.29K 775.43K 23)Net Income/Employee 83.17K 18.45K 138.86K 24) Receivable Turnover 23.22 17.42 14.08 25) Inventory Turnover 9.12 8.86 0 26) Asset Turnover 1.49 1.55 0.48
1. Pick two publicly traded companies in the same industry. 2. Calculate the ratios from your...
1. Pick two publicly
traded companies in the same industry.
2. Calculate the
ratios from your textbook or any other ratios you deem necessary
for each company for two years. Some examples are working capital,
current ratio, current cash debt coverage ratio, inventory turnover
ratio, days in inventory, receivables turnover ratio, average
collection period, debt to asset ratio, cash debt coverage ratio,
times interest earned ratio, free cash flow, earnings per share,
price earnings ratio, gross profit rate, profit margin...
Pick two publicly traded companies in the same industry. Apple Inc. and Microsoft 2. Calculate the...
Pick two publicly traded companies in the same industry. Apple Inc. and Microsoft 2. Calculate the ratios for 2015 and 2016 that you deem necessary for each company for two years. Some examples are working capital, current ratio, current cash debt coverage ratio, inventory turnover ratio, days in inventory, receivables turnover ratio, average collection period, debt to asset ratio, cash debt coverage ratio, times interest earned ratio, free cash flow, earnings per share, price earnings ratio, gross profit rate, profit...
Compare the two companies based on their ratios. Use the last column in the template to...
Compare the two companies based on their ratios. Use the last column in the template to detail how each company is doing in relation to the ratios. Explain the significance of how the company ratios compare to the industry and each other. RATIOS S&P 500 Ford Motor Co General Motors Co ANALYSIS Profitability Ratios (%) Gross Margin 15.01 17.9 EBITDA Margin 8.66 15.55 Operating Margin 2 3 Pre-Tax Margin 2.71 5.81 Effective Tax Rate 14.96 5.54 Financial Strength Quick Ratio...
3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages...
3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following...
Correctly answer is part of question 3 Aa Aa 3. Asset management ratios Asset management ratios...
Correctly answer is part of question 3
Aa Aa 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio,...
Kimmel, Accounting, 7e Help System Announcements Expand Your Critical Thinking 13-04 The Coca-Cola Company and PepsiCo,...
Kimmel, Accounting, 7e Help System Announcements Expand Your Critical Thinking 13-04 The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the worl IP itical itical 13-01 13-02 13-04 13-05 13-06 13-07 Coca-Cola PepsiCo $16,451 $11,771 12,921 8,256 29,090 40,632 10,388 18,899 6,424 5,546 3,224 4,354 2,171 2,370 35,621 13,656 12,555 8,272 20,660 22,066 45,771 37,448 22,472 21,644 1,920 2,000 335373 7,686 6,396 1,873 2,028 Total current assets Total current liabilities Net sales Cost of goods sold Net...
PA13-5 Interpreting Profitability, Liquidity, Solvency, and P/E Ratlos [LO4, L05] Coke and Pepsi are well-known international brands. Coca-Cola sells more than $35 billion worth of beverages each year while annual sales of Pepsi products exceed $43 billion. Compare the two companies as a potential investment based on the following ratios: Coca PepsiCo Cola Pepsico Ratio Gross profit percentage Net profit margin Return on equity EPS Receivables turnover ratio Inventory turnover ratio Current ratio Debt-to-assets P/E ratio 63.9% 33.6% 37.7% $5.06...
Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Coca-Cola Fiscal Year Ended: 2015 2014 2013 Net Sales $44,300 $46,000 $46,800 Accounts Receivable 4,290 4800 4,930 Allowance for Doubtful Accounts 350 330 60 Accounts Receivable, Net of Allowance...
1. Pick two publicly
traded companies in the same industry.
2. Calculate the
ratios from your textbook or any other ratios you deem necessary
for each company for two years. Some examples are working capital,
current ratio, current cash debt coverage ratio, inventory turnover
ratio, days in inventory, receivables turnover ratio, average
collection period, debt to asset ratio, cash debt coverage ratio,
times interest earned ratio, free cash flow, earnings per share,
price earnings ratio, gross profit rate, profit margin...
Correctly answer is part of question 3
Aa Aa 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio,...
Kimmel, Accounting, 7e Help System Announcements Expand Your Critical Thinking 13-04 The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the worl IP itical itical 13-01 13-02 13-04 13-05 13-06 13-07 Coca-Cola PepsiCo $16,451 $11,771 12,921 8,256 29,090 40,632 10,388 18,899 6,424 5,546 3,224 4,354 2,171 2,370 35,621 13,656 12,555 8,272 20,660 22,066 45,771 37,448 22,472 21,644 1,920 2,000 335373 7,686 6,396 1,873 2,028 Total current assets Total current liabilities Net sales Cost of goods sold Net...
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