Search Yahoo Finance or any other credible source to find the most recent income
ID: 2813684 • Letter: S
Question
Search Yahoo Finance or any other credible source to find the most recent income statement and balance sheet of a major corporation. Provide these statements in the appropriate format. Perform a vertical analysis and comment on your finding. Perform a financial analysis incorporating debt ratio, debt to equity ratio, return on assets, return on equity, current ratio, quick ratio, inventory turnover, days in inventory, accounts receivable turnover, accounts receivable cycle in days, accounts payable turnover, accounts payable cycle in days, earnings per share (EPS), and price to earnings ratio (P/E). Comment on your finding. Present your work in detail and explain. Provide references for content.
Explanation / Answer
Company: Pepsico Inc.
Income Statement ($ millions)
2017
2016
Net Revenue
63,525
62,799
Cost of sales
28,785
28,209
Gross profit
34,740
34,590
Selling, general and administrative expenses
24,231
24,805
Venezuela impairment charges
Operating Profit
10,509
9,785
Interest expense
-1,151
-1,342
Interest income and other
244
110
Income before income taxes
9,602
8,553
Provision for income taxes (See Note 5)
4,694
2,174
Net income
4,908
6,379
Less: Net income attributable to noncontrolling interests
51
50
Net Income Attributable to PepsiCo
4,857
6,329
Net Income Attributable to PepsiCo per Common Share
Basic
3.4
4.39
Diluted
3.38
4.36
Weighted-average common shares outstanding
Basic
1,425
1,439
Diluted
1,438
1,452
Cash dividends declared per common share
3.1675
2.96
Balance Sheet ($ millions)
2017
2016
ASSETS
Current Assets
Cash and cash equivalents
10,610
9,158
Short-term investments
8,900
6,967
Accounts and notes receivable, net
7,024
6,694
Inventories
2,947
2,723
Prepaid expenses and other current assets
1,546
908
Total Current Assets
31,027
26,450
Property, Plant and Equipment, net
17,240
16,591
Amortizable Intangible Assets, net
1,268
1,237
Goodwill
14,744
14,430
Other nonamortizable intangible assets
12,570
12,196
Nonamortizable Intangible Assets
27,314
26,626
Investments in Noncontrolled Affiliates
2,042
1,950
Other Assets
913
636
Total Assets
79,804
73,490
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations
5,485
6,892
Accounts payable and other current liabilities
15,017
14,243
Total Current Liabilities
20,502
21,135
Long-Term Debt Obligations
33,796
30,053
Other Liabilities
11,283
6,669
Deferred Income Taxes
3,242
4,434
Total Liabilities
68,823
62,291
Commitments and contingencies
Preferred Stock, no par value
41
41
Repurchased Preferred Stock
-197
-192
PepsiCo Common Shareholders’ Equity
Common stock, par value
24
24
Capital in excess of par value
3,996
4,091
Retained earnings
52,839
52,518
Accumulated other comprehensive loss
-13,057
-13,919
Repurchased common stock, in excess of par value (446 and 438 shares, respectively)
-32,757
-31,468
Total PepsiCo Common Shareholders’ Equity
11,045
11,246
Noncontrolling interests
92
104
Total Equity
10,981
11,199
Total Liabilities and Equity
79,804
73,490
Cash Flow Statement ($ millions)
2017
2016
Operating Activities
Net income
4,908
6,379
Depreciation and amortization
2,369
2,368
Share-based compensation expense
292
284
Restructuring and impairment charges
295
160
Cash payments for restructuring charges
-113
-125
Charges related to the transaction with Tingyi
373
Venezuela impairment charges
Pension and retiree medical plan expenses
221
501
Pension and retiree medical plan contributions
-220
-695
Deferred income taxes and other tax charges and credits
619
452
Provisional net tax expense related to the TCJ Act
2451
Change in assets and liabilities:
Accounts and notes receivable
-202
-349
Inventories
-168
-75
Prepaid expenses and other current assets
20
10
Accounts payable and other current liabilities
201
997
Income taxes payable
-338
329
Other, net
-341
64
Net Cash Provided by Operating Activities
9,994
10,673
Investing Activities
Capital spending
-2,969
-3,040
Sales of property, plant and equipment
180
99
Acquisitions and investments in noncontrolled affiliates
-61
-212
Reduction of cash due to Venezuela deconsolidation
Divestitures
267
85
Short-term investments, by original maturity:
More than three months - purchases
-18,385
-12,504
More than three months - maturities
15,744
8,399
More than three months - sales
790
Three months or less, net
2
16
Other investing, net
29
9
Net Cash Used for Investing Activities
-4,403
-7,148
Financing Activities
Proceeds from issuances of long-term debt
7,509
7,818
Payments of long-term debt
-4,406
-3,105
Debt redemptions
-2,504
Short-term borrowings, by original maturity:
More than three months - proceeds
91
59
More than three months - payments
-128
-27
Three months or less, net
-1,016
1,505
Cash dividends paid
-4,472
-4,227
Share repurchases - common
-2,000
-3,000
Share repurchases - preferred
-5
-7
Proceeds from exercises of stock options
462
465
Withholding tax payments on RSUs, PSUs and PEPunits converted
-145
-130
Other financing
-76
-58
Net Cash Used for Financing Activities
-4,186
-3,211
Effect of exchange rate changes on cash and cash equivalents
47
-252
Net Increase in Cash and Cash Equivalents
1,452
62
Cash and Cash Equivalents, Beginning of Year
9,158
9,096
Cash and Cash Equivalents, End of Year
10,610
9,158
Parameter
Formula
2017
2016
Comments / % Change
Debt Ratio
Total Liability / Total Assets
0.862
0.848
The debt component used to fund the assets has remained almost same across the 2 years
Debt to Equity Ratio
Total Debt/Total Equity
6.267
5.562
Company is debt oriented and its debt is increasing
Return on Assets
Net Income/Total Assets
0.062
0.087
It has earned less return on its assets in 2017 in comparison to 2016
Retutn on Equity
Net Income/Total Equity
0.447
0.570
It has earned less return on its equity in 2017 in comparison to 2016
Current Ratio
Current Assets/Current Liabilities
1.513
1.251
20.926% increase
Quick Ratio
(Cash+Short term investment+receivables)/Current liablities
1.294
1.080
19.8704% increase
Inventory Turnover
Cost of Goods Sold/Average Inventory
10.153
9.950
In 2017, it has converted its inventory into sales 10 times in a year in comparison to 9 times in 2016
Days in inventory
365 days/Inventory Turnover
35.948
36.682
Number of days taken to convert inventory to sales has decreased in 2017 than 2016, which is better
Accounts receivable turnover
Sales/ Average account Receivables
9.262
9.156
In both the years, it has collected payments for its credit sales for 9 times in a year
Accounts receivable cycle in days
365/Accounts receivable turnover
39.410
39.866
Number of days taken to collect the accounts receivables has remained almost same for the 2 years
Accounts payable turnover
Cost of Goods Sold/Average Payables
1.968
1.928
In both the years, it has paid for its credit purchases for almost 2 times in a year
Accounts payable cycle in days
365/Accounts payable turnover
185.512
189.300
Number of days taken to pay off the accounts payables has remained almost same for the 2 years
Earning Per Share (EPS)
Net Income/ Number of Shares outstanding
44.736
43.977
The EPS has increased in 2017 in comparison to 2016
Price to Earnings ratio
Price per Share/ EPS
2.695
2.495
Price to Earnings Ratio has remained almost same indicating the market is still in similar thoughts about the company
Income Statement ($ millions)
2017
2016
Net Revenue
63,525
62,799
Cost of sales
28,785
28,209
Gross profit
34,740
34,590
Selling, general and administrative expenses
24,231
24,805
Venezuela impairment charges
Operating Profit
10,509
9,785
Interest expense
-1,151
-1,342
Interest income and other
244
110
Income before income taxes
9,602
8,553
Provision for income taxes (See Note 5)
4,694
2,174
Net income
4,908
6,379
Less: Net income attributable to noncontrolling interests
51
50
Net Income Attributable to PepsiCo
4,857
6,329
Net Income Attributable to PepsiCo per Common Share
Basic
3.4
4.39
Diluted
3.38
4.36
Weighted-average common shares outstanding
Basic
1,425
1,439
Diluted
1,438
1,452
Cash dividends declared per common share
3.1675
2.96
Balance Sheet ($ millions)
2017
2016
ASSETS
Current Assets
Cash and cash equivalents
10,610
9,158
Short-term investments
8,900
6,967
Accounts and notes receivable, net
7,024
6,694
Inventories
2,947
2,723
Prepaid expenses and other current assets
1,546
908
Total Current Assets
31,027
26,450
Property, Plant and Equipment, net
17,240
16,591
Amortizable Intangible Assets, net
1,268
1,237
Goodwill
14,744
14,430
Other nonamortizable intangible assets
12,570
12,196
Nonamortizable Intangible Assets
27,314
26,626
Investments in Noncontrolled Affiliates
2,042
1,950
Other Assets
913
636
Total Assets
79,804
73,490
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations
5,485
6,892
Accounts payable and other current liabilities
15,017
14,243
Total Current Liabilities
20,502
21,135
Long-Term Debt Obligations
33,796
30,053
Other Liabilities
11,283
6,669
Deferred Income Taxes
3,242
4,434
Total Liabilities
68,823
62,291
Commitments and contingencies
Preferred Stock, no par value
41
41
Repurchased Preferred Stock
-197
-192
PepsiCo Common Shareholders’ Equity
Common stock, par value
24
24
Capital in excess of par value
3,996
4,091
Retained earnings
52,839
52,518
Accumulated other comprehensive loss
-13,057
-13,919
Repurchased common stock, in excess of par value (446 and 438 shares, respectively)
-32,757
-31,468
Total PepsiCo Common Shareholders’ Equity
11,045
11,246
Noncontrolling interests
92
104
Total Equity
10,981
11,199
Total Liabilities and Equity
79,804
73,490
Cash Flow Statement ($ millions)
2017
2016
Operating Activities
Net income
4,908
6,379
Depreciation and amortization
2,369
2,368
Share-based compensation expense
292
284
Restructuring and impairment charges
295
160
Cash payments for restructuring charges
-113
-125
Charges related to the transaction with Tingyi
373
Venezuela impairment charges
Pension and retiree medical plan expenses
221
501
Pension and retiree medical plan contributions
-220
-695
Deferred income taxes and other tax charges and credits
619
452
Provisional net tax expense related to the TCJ Act
2451
Change in assets and liabilities:
Accounts and notes receivable
-202
-349
Inventories
-168
-75
Prepaid expenses and other current assets
20
10
Accounts payable and other current liabilities
201
997
Income taxes payable
-338
329
Other, net
-341
64
Net Cash Provided by Operating Activities
9,994
10,673
Investing Activities
Capital spending
-2,969
-3,040
Sales of property, plant and equipment
180
99
Acquisitions and investments in noncontrolled affiliates
-61
-212
Reduction of cash due to Venezuela deconsolidation
Divestitures
267
85
Short-term investments, by original maturity:
More than three months - purchases
-18,385
-12,504
More than three months - maturities
15,744
8,399
More than three months - sales
790
Three months or less, net
2
16
Other investing, net
29
9
Net Cash Used for Investing Activities
-4,403
-7,148
Financing Activities
Proceeds from issuances of long-term debt
7,509
7,818
Payments of long-term debt
-4,406
-3,105
Debt redemptions
-2,504
Short-term borrowings, by original maturity:
More than three months - proceeds
91
59
More than three months - payments
-128
-27
Three months or less, net
-1,016
1,505
Cash dividends paid
-4,472
-4,227
Share repurchases - common
-2,000
-3,000
Share repurchases - preferred
-5
-7
Proceeds from exercises of stock options
462
465
Withholding tax payments on RSUs, PSUs and PEPunits converted
-145
-130
Other financing
-76
-58
Net Cash Used for Financing Activities
-4,186
-3,211
Effect of exchange rate changes on cash and cash equivalents
47
-252
Net Increase in Cash and Cash Equivalents
1,452
62
Cash and Cash Equivalents, Beginning of Year
9,158
9,096
Cash and Cash Equivalents, End of Year
10,610
9,158
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