Also a measure of short term liquidity.

*Current ratio has improved due to increase in current assets.

** Compared to this, Pepsiamerica has a negative current ratio.

3. Quick Ratio = Current Assets less Inventories/ Current Liabilities 0.90:1 0.71:1 n/a

A measure of extreme short-term liquidity.

*Quick Ratio has improved over the period.

** By comparison, Pepsi’s Quick Ratio was 0.65:1 in 2003.

Leverage Ratios:

4. Total Debt to Total Assets = Total Liabilities/ Total Assets 0.48:1 0.51:1 n/a

Shows the debt-asset mix of the business.

*Total debt which was just over 50% of total assets in 2002, has decreased
Slightly to 48% of total assets in 2003. An improvement.

** As against this, Pepsi’s total debt to assets was 0.56:1 in 2003.

5. Times Interest Earned = Operating Income / Interest Expense 29.33 27.42 18.51
times times times
Shows the ability of the company to meet its interest obligations
From its own operating income. Also called Interest Cover ratio.

*Interest coverage ratio has improved steadily over the period, from
18 to 27 to 29 times the operating income.

** Pepsi’s figure was 4.54 times for 2003.

Efficiency Ratios:

6. Average Collection Period = (Trade A/cs Rec/ Net Op Rev.) x 360 35 days 38 days n/a

Shows the average time taken to collect cash against credit sales.
Indicator of collection efficiency of the business.

* Avg. Collection period has decreased by 3 days over the year.
An improvement.

** Pepsi’s collection period was 30 days in 2003.

7. Inventory Turnover = Net Op Rev./ Inventory 16.80 15.11 n/a
times times
Shows the number of times inventory converted into sales in a year.
Measure of sales efficiency or move-ability of merchandise.

* Inventory Turnover has gone up from 15 to 16 times; an improvement.
Average Days in Inventory (360/ Inv. Turnover) has decreased from
23 days in 2002 to 21 days in 2003.

** Pepsi’s inventory turnover was 19 times in 2003.

8. Total Asset Turnover = Net Op Rev/ Total Assets 0.77 0.80 n/a
times times
Measures the efficiency of the firm in using its assets to generate sales.

* The asset turnover has dropped slightly, from 0.80 to 0.77 times.

** Pepsi’s asset turnover was 0.90 times in 2003.

Profitability Ratios:

9. Gross Profit Margin = (Gross Profit/ Net Op Rev) x 100 63.11% 63.68% 65.55%

Indicates firm’s control over sales and cost of sales.

* Decreasing slightly from 65% in 2001 to 63% in 2002 and 2003,
The Gross profit ratio has been steady over the last 2 years.

** Pepsico had a Gross Margin of 42.02% in 2003.

10. Net Profit Margin = [Net Inc.(after Acc.Change)/ Net Op. Rev.] x 100 20.65% 15.59% 22.62%

Indicates net profitability of the business; figures selected after accounting change.

* Profit margin has improved from 15 to 20 percent over the period.

** Pepsico had a Net Margin of 4.86% in 2003.

11. Return on Total Assets = (Net Income / Total Assets) x 100 15.89% 12.49% n/a

Shows the productivity of the firm’s assets.

* ROA has increased from 12.49 to 15.89% over the year, showing
Greater productivity in using the firm’s assets.

** Pepsico’s ROA was 4.40% in 2003.

Equity Ratios:

12. Book Value per Share = Total Stockholders Equity/ Total Ord. Shs. $5.76 $4.77 n/a

Measures the book value per share of ordinary stock

* Book value has increased from $4.77 to $5.76 over the period.

** Pepsico’s Book Value was $4.79 in 2003.

N/A = not available
* = Analysis of ratio for the company
** = Comparison with competitor Pepsi.