Financial Analysis Report of the Pepsico（百事可乐的财务分析作业）

(By Conley) Teamwork Of Accounting Course

BALANCE SHEET OF PEPSICO2007ASSETSCurrent AssetCash and cash equivalentshort-term investmentAccounts and notes receviable,netInventoriesPrepaid expenses and other current asset Total current AssetsProperty,Plant and Equipment,netAmortizable Intangible Asset,netGoodwillOther nonamortizable intangible assets Nonamortizable Intangibe assetsInvestment in Noncontrollled AffiliatesOther Assets Total AssetsCommon-size percentages(%)200620072006910157143892290991101511122879651691248641743541682346281651117137251926657913096876374594121258063690980299302.6279311544.53679103612.67471416.6131454312.86184590529.3144276332.424627472.29871780114.927226523.60401986818.5312463912.573639834.857340881005.5162044773.91246241212.445706656.4350150352.19512195130.5045105232.365519552.12829936515.349148014.04944871419.3985967312.328767123.274306716100 ii)

Common-sized percentages in Income statement of Pepsi

20053256214176122521505984495-256159638223044078$2.43$2.39Common-size percentages(%)20072006200510010010045.695901144.8586959643.5354093735.9933120536.1755414537.626681410.1469321580.4610524520.46065966518.1638546918.5047101318.377249551.4186553171.5738395421.520176893-0.56746213-0.68019467-0.786192490.3166641330.4923584830.48829924519.3317120119.8907134919.59953324.9982266813.8335657577.07573244914.3334853316.0571477412.52380075INCOME STATEMENT OF PEPSICOIn millions(dollars)20072006Net Revenue3947435137Cost of sales1803815762SG&A expenses1420812711Amortization of intangible expenses58162Operation profit71706502Bottling equity income560553Interest expense-224-239interest income125173Income before Income Taxes76316989Provision for Income Taces19731347Net Income56585642Net Income per Common Shares Bsaic Diluted$3.48$3.41$3.42$3.34

Ratios

Along with dollar and percentages changes, trend percentages, and common-sized percentages, ratios can be used to compare past performance and other companies to our company. Some ratios of Pepsi are calculated here to analyze.

Profitability

We will use the information as follow to calculate the profitability ratio for Pepsi in 2007 and some results are calculated in the table.

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(By Conley) Teamwork Of Accounting Course

Pepsico Inc. 2007Liquidity

Ending market price per share30Number of common shares outstanding all of 20071782Net sales39474Operation profit7170Net income5658Total shareholders' equity Beginning of year15447 End of year17325Revenues39474Cost of sales18038Total assets Beginning of year34628 End of year29930Some Result calculated as followProfit Margin0.143334853Average of Assets32279Return on Assets0.22212584Average of Equity 16386Return on Equity0.345294764Earning per share3.175084175 Profitability Ratios calculation:

Profit Margin=Net IncomeNet Sales?565839474?0.143

Rerurn on Assets=Operating IncomeAverage total Assets?717032279?0.222

Resurn on Equity=Net IncomeAverage Total Equity?565816386?0.345

Earning per Share=Net Income5658Average Shares of Capital Stock Outstanding?1782?3.175Price?Earning Ratio=Current Market Price of one share of stock30Earning Per Share?3.175?9.449Profit Margin describes the ability to earn net income from each sales dollar, from

the calculated result we know the ability of it is not very well, and we can inform that the Pepsi earn income mainly by a great amounts of sales. ROA with 0.222 is a good signal that the Pepsi has a good profitability. The ROE, EPS, and PE all show that the Pepsi is a good profitable company.

We will use the information as follow to calculate the liquidity ratio for Pepsi in 2007 and some results are calculated in the table.

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(By Conley) Teamwork Of Accounting Course

Pepsico Inc. 2007CashAccounts receivable,net Beginning of year End of year Inventory Beginning of year End of year Total current assetsTotal current liabilitiesToral liabilitiesTotal assets Beginning of year End of year Some Results of the RatiosWorking CapitalCurrent RatioQuick AssetsQuick RatioCash+short-tern investment+current receviableAcid-Test Ratio23981.30929962652990.68347736468700.886108603c 9103725438919262290101517753173942993034628Liquidity Ratios calculation:

eentts L-Tiaobtai lli ties Working Capital=Total Current Ass =10151-7753=2398Curre nAtssets Curre nRtatio=?10151 ?1.309Curre nLtiabilities7753Quick Assets5299Quick Ratio=??0.683Current Liabilities7753 Cash?Shortterm Investment+current receivableAcid?Test Ratio=Current Liabilities6870 =?0.8867753 The Pepsi has positive working capital which means that the current assets excesses

current liabilities. Besides, current ratio, quick ratio, and acid-test ratio all have big value, so the Pepsi has a good liquidity.

Solvency

We will use the information as follow to calculate the solvency ratio for Pepsi in 2007 and some results are calculated in the table.

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(By Conley) Teamwork Of Accounting Course

Debit and Equity RatiosAmountRatio Total Liabilitis173940.502310269 Total Equity172340.497689731 Total Liabilities and Shareholders' Equity346281Other Ratios of Solvency1.009283974Debt-to-Equity Ratio7855Income before interest and taxes224Interest expense35.06696429times interest earnedFrom the ratios we can see debt-to-equity ratio is small, so the company has more

opportunity to expand through of debt financing.

Efficiency

We will use the information as follow to calculate the solvency ratio for efficiency in 2007 and some results are calculated in the excel.

Information that will be used in ratios calculationNet sales39474Average Total Assets32279Average Total Accounts Receivable40574389Accounts Receivable,netCost of sales18038Average Inventory2108Ending Inventory2290Ratios of EfficiencyTotal Asset Turnover1.222900338Accounts Recceivable turnover rate9.729849643Days' sales uncollected 0.111187111Inventory turnover rate8.556925996Days' sales In Inventory 46.33828584

Total asset turnover=Net sales39474??1.2223Average total assets32279Net sales39474Accounts receivable turnover rate=??9.730Average Accounts receivable4057

Accounts receivable,net43889Day's sales uncollected=??0.111Net sales39474Cost of goods sales18038Inventory turnover=??8.557Average Inventory2108Ending Inventory2290Day's sales in inventory=?365??46.338Cost of goods sales18038Total asset turnover with 1.2223 shows that the Pepsi has a degree ability to use its assets to

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