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Business Anaysis: Assets and Notes Receivable at PesiCo

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Among its current assets, PepsiCo’s accounts and notes receivable to total assets percentage fall down from 9.48% in year 2011 to 7.49% in 2013, due to its receivable period becomes long. In cash cycle, the shorter receivable period, the better. PepsiCo’ inventories to total assets percentage also fall down from 5.25% in year 2011 to 4.40% in year 2013, caused by decreased number of days to sell its inventories. decreased accounts and notes receivable and decreased inventories as percentages of total assets should raise some concerns and thus need to be analyzed further with liquidity ratios and asset utilization ratios to decide whether these are warning signs of the company’s financial health or mostly caused by other current or non-current assets decreasing over those years.

Among its short-term liabilities, PepsiCo’s accounts payable to its total liabilities and shareholders’ equity went up from 5.60% in year 2011 to 6.29% in year 2013, indicating the company could have been extending its accounts payable outstanding period slightly to leverage off the effect of increasing accounts and notes receivable period.
PepsiCo’s property, plant and equipment made up 25.55% of its total assets on average from year 2011 to year 2013, Coca-Cola operated on an even lower average property, plant and equipment percentage, only17.37% to its total assets. It indicate both of them are not capital intensive. also, it can illustrate PepsiCo and Coca-Cola have always contracted out their more capital intensive operations to their affiliate factories.

PepsiCo’s long-term debt obligations to total liabilities and shareholders’ equity percentage was steady from year 2011 to year 2013 with an average of 8.12%. Coca-Cola's average long-term debt is ...

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...rt-term liabilities. In year 2012 and 2013, PepsiCo's average working capital turnover was 25.17 better than Coca-Cola’s 3-year working capital turnover 23.63, it indicated PepsiCo was consistent in generating sales from the funding working capital efficiently.

PepsiCo’s 3-year average price to earnings ratio was 17.70, lower than Coca-Cola’s 19.68. This indicates Coca-Cola’s investors had higher expectations to the company from year 2011 to year 2013, and thus were willing to pay more to buy the company’s stock. Coca-Cola delivered average dividend payout rate of 53.83%, whereas PepsiCo had relatively lower dividend yield rate 52.07% on average. It was definitely an added bonus to Coca-Cola’s investors to get much more dividends out of their investments. But PepsiCo’s dividend yield and payout were good and strong as well, even though Coca-Cola’s were much better.
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