Comparing Investment Activities Information is provided below from the 2001 annual reports of PepsiCo, Inc. and The Coca Cola Company.
|
(In millions except per share amounts) |
PepsiCo |
Coca Cola |
|
Current assets |
$5,853 |
$7,171 |
|
Investments and other assets |
4,125 |
8,214 |
|
Plant assets, at cost |
12,180 |
7,105 |
|
Plant assets, net |
6,876 |
4,453 |
|
Intangibles, net |
4,841 |
2,579 |
|
Total assets |
21,695 |
22,417 |
|
Current liabilities |
4,998 |
8,429 |
|
Long term debt |
2,651 |
1,219 |
|
Shareholders’ equity |
8,648 |
11,366 |
|
Net income |
2,662 |
3,969 |
|
Net sales |
26,935 |
20,092 |
|
Interest expense |
219 |
289 |
|
Depreciation and amortization |
1,082 |
803 |
|
Net cash provided by operating activities |
4,201 |
4,110 |
|
Net cash from (used) in investing activities |
2,637 |
1,188 |
|
Net cash from (used) in financing activities |
1,919 |
2,830 |
|
Earnings per share |
1.51 |
1.6 |
|
Market value of equity |
86,475 |
117,226 |
Required Use appropriate accounting ratios discussed in this chapter and any other ratios you think are helpful to compare the investing activities and performances of the two companies for 2001. What important differences exist in the investing and financing activities of the companies? How do these differences affect the risk and return of the companies? How would you expect these differences to affect the market to book value and book value to cash flow from operating activities ratios of the two companies?