Question

address the following questions or issues (Choose any two companies that are in the same industry and listed on the NYSE or any other exchange.)

Select three items from the income statements that you feel would be important to an investor. Analyze and compare your two companies in terms of these items and how they are performing relative to each other and in general.

Select three items from the balance sheet that you feel would be important to an investor. Analyze and compare your two companies in terms of these items and how they are performing relative to each other and in general.

Analyze and compare your two companies in terms of the income statement and balance sheet collectively. How they are performing relative to each other and in general?

Answer 1

Taking into account two leading companies in the Drink Industry

PepsiCo . Inc (PEP)(NASDAQ)

Coca Cola Company(KO) (NASDAQ)

Comparision Income Statement Of the Two Companies:

Fiscal Year Ended December 30,2017

Income statement Items	Pepsico .INC	Coca Cola Company
Sales/Revenue	$ 63,525 million	$ 35410 million
Operating Profit	$10,509 million	$ 7501 million
Net Income	$ 4857 million	$ 1283 million

Comparision Of Consolidated Balance Sheet of Pepsi Co.Inc and Coca Cola Company:

Fiscal Year Ended December 30,2017(-in millions)

Balance Sheet Items	Pepsi co.Inc	Coca Cola Company
Total Assets	$79,804	$87,896
Total Liabilities	$ 68823	$68,919
Total Shareholders Equity	$11045	$18,977

Income Statement is a key financial statement which reports on a company's profitability during a relatively short perio of time such as the past year,month,13 weeks,etc.Understanding an income statement is essential for investors in order to analyze the profitability and future growth of a company,which should play a huge role in deciding whether or not to invest in it.

After comparing the Revenues of both the company which are :

Pepsico.Inc - $ 63,525 million

Coca cola Company-$ 35,410

These are the amounts earned through the sale of goods and the providing of services.Revenues of both the companies indicates that Pepsico.Inc Made a huge sale in the year ended 2017 as compared to Coca Cola Company.

Comparing the Operating Profit of both the companies:

PepsiCo .Inc-$ 10509 million

Coca Cola Company-$ 7501 million

Deducting SG&A(selling,general and Administrative expenses) from a company's gross profit produces operating income.This figure represents a company's earnings from its normal operations before any so-called non-operating income and/or costs such as interest expense,taxes and special items.Income at the operating level,which is viewed as more reliable,is often used by financial analysts and investors as a measure of profitability.

After comparing both the company's operating income we can find out out that pepsiCo.inc is having more operating profit than CocaCola Company.

Comparing Net Income of both the companies:

PepsiCo.Inc-$4857 million

CocaCola Company-$1283 million

Net Income is very important to investors-also on a per share basis(as earning per share)-as it represents the profit for the accounting period attributable to the shareholders.

Comparision of Balance sheet as on Dec 2017-

Total Assets-Total assets are the sum of all current and non-current assets that a company owns.They are reported on the company balance sheet,The investors review the company's total assets before determining whether or not the business has enough existing value to make an investment.

Comparing Total Assets of both companies:

PepsiCo.inc-$79,804 million

CocaCola Company-$87,896 million

Looking at the figures we found that coca cola company is having more assets as compared to Pepsico.Inc whic indicates that coca cola company is having more existig value to make investment than pepsico.Inc.

Comparing Total Liabilities:

pepsico.Inc-$68,823

Coca Cola company-$68,919

This indicates that though total assets of coca cola Company if more but their liabilt is also more as compared to pepsico.co which is not a good sign for profitability.

comparing shareholders equity

pepsico.inc-$11045 million

coca cola company-$18977 million

It is the share capital of the company.It represents the portion of total assets that is left to the stockholders of a corporation after all of its liabilities are paid.Coca cola company is having more share holder equity as compared to pepsico.inc.

Investor should invest in Pepsico if analyzing all the datas present ,taking into account profitability of the company,and comparing sales and net income.