Visit the website of your favorite U.S. company. Find the company’s financial statements in the section of the website for investors. You are looking for the full annual report- also called a 10-K. It may be listed under SEC Filings. Make sure it is the most current published year. Post a link to the statements. What did you find interesting about each of the four financial statements, which include balance sheets, income statements, statements of cash flows, and statements of owners’ equity and notes? How could the information in those statements be useful to an investor and to a manager?

PepsiCo Inc

Introduction

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Visit the website of your favorite U.S. company. Find the company’s financial statements in the section of the website for investors. You are looking for the full annual report- also called a 10-K. It may be listed under SEC Filings. Make sure it is the most current published year. Post a link to the statements. What did you find interesting about each of the four financial statements, which include balance sheets, income statements, statements of cash flows, and statements of owners’ equity and notes? How could the information in those statements be useful to an investor and to a manager?
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Financial statements are very vital in any profit-driven organization. They give a summary of the company’s operations, net worth, profits and debts. Financial statements also give investors and potential investors the ability to analyze whether their investment will be profitable or will sink into loses. Financial statements also help the company to summarize data used for decision making in any financial year. In this paper, we shall look into the financial statements for PepsiCo Inc for the period ended 30th December 2017. This is the most current report. The financial statements of in this analysis are: The balance sheet, income statement, statement of cashflows and notes.

Discussion

The balance sheet presents the company’s summary of assets and liabilities. All the figures in this analysis are presented in millions. From the balance sheet, we can note at a glance that the total assets for the company increased from $73,490 in 2016 to 79,804 in 2017. This represents a 8.59% increase in the total assets within the 2017 financial year.  The total assets comprised of $31,027 current assets and 27,314 fixed assets. The company’s goodwill also increased from $14,430 to $14,744.

The company’s current assets were 20,502, a drop from the preceding year which stood at $21,135. Long term debt obligations for the company stood at $33,796 for the year 2017, representing an increase from the previous year which had a long term debt obligations standing at $30,053. The analysis presents the total liabilities at a value of $68,823 for 2017, which is an increase from the current year which recorded total liabilities of $62,291. From this analysis, we can clearly see that the total assets exceeded the total liabilities and hence the company is preliminarily doing good. The preferred stock value remained unchanged for the two comparative periods which stood at 41. The total equity for the company is $10,981. This was a drop from the previous year which had a total equity of $11,199.

Knowing about these details, as earlier stated, gives an investor an understanding of the company’s profitability and therefore makes it possible to make an informed decision on whether to invest in the company or not. The information also helps the investor to know the price of stocks so that they can be able estimate the number of stocks to purchase from that company. To the manager, this information helps to evaluate the performance of the company. After the evaluation, the management is able to identify weak areas and make a decision to improve performance.

In analyzing the income statements, we are looking at the profitability of the company. At a glance, the net revenue for the company in the year 2017 stood at $63,525, which represents a shallow increase from the previous year which had a net revenue of $62,799. The gross profit for the year was $34,740 which represents a very slight increase from the previous year of 2016, which had a gross profit of $34,590. The operating profit for the company is $10,509 for 2017 while for 2016 it was $ 9,785. After all deductions and expenses, the net income attributable to PepsiCo Inc is $4,857 for the accounting year, which represents a significant decrease from $6,329 in the previous year. This shows that although some of the assets have increased in value, there is a general decrease in the net income.

The consolidated statement of cash flows show how incomes and expenses were distributed across the year. It shows the flow of income to and from the company. The cash flows are a detailed report of both the balance sheet and income statement, as data from this document is used to prepare these other documents. Hence, we note that there was a general trend in the operating income making it to increase from the preceding year. The rise in prices led to high production costs and hence caused a decline in the net income attributable to the company.

 

References.

https://www.pepsico.com/docs/album/annual-reports/pepsico-inc-2017-annual-report.pdf?sfvrsn=1f19b18d_4

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