Comparative Analysis

Comparative Analysis Case

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The Coca-Cola Company and PepsiCo, Inc.

The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online.

Instructions

Use the companies’ financial information to answer the following questions.

(a) What are the primary lines of business of these two companies as shown in their notes to the financial statements?

(b) Which company has the dominant position in beverage sales?

(c) How are inventories for these two companies valued? What cost allocation method is used to report inventory? How does their accounting for inventories affect comparability between the two companies?

(d) What accounting policy changes do the companies discuss?

The Coca-Cola Company and PepsiCo, Inc. The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively.

The companies’ complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies’ financial information to answer the following questions.

(a) Which company had the greater percentage increase in total assets from 2013 to 2014?

(b) Using the Selected Financial Data section of these two companies, determine their 5-year average growth rates related to net sales and income from continuing operations.

(c) Which company had more depreciation and amortization expense for 2014? Provide a rationale as to why there is a difference in these amounts between the two companies.