Overview
The statement of cash flows is one of the primary financial
statements that a company must prepare each year and involves the
company’s operating, investing, or financing activities. The statement
of cash flows can be analyzed and leveraged in making decisions
pertaining to lending and investing.
Directions
This assignment will use the statement of cash flows of The Coca-Cola
Company and PepsiCo, Inc. presented in Appendices C and D,
respectively, which are linked in the Supporting Materials Section. The
companies’ complete annual reports, including the notes to the financial
statements, are also available online and linked in the Supporting
Material section. You will use each company’s statement of cash flows to
perform calculations and explain your rationale behind these
calculations. Remember, you will need to look at both sets of financials
for each company and address the rubric criteria for both companies.
Specifically, you must address the following rubric criteria:
Operating Activities
Identify the method of computing net cash provided by operating activities for each company.
Calculate the amounts of cash provided by operating activities reported each company in 2020.
Explain the two companies’ trends in net cash provided by operating activities over the period 2018 to 2020 for each company.
Investing Activities
Identify the most significant item in the investing activities section reported by each company in 2020.
Financing Activities
Identify the most significant item in the financing activities section reported by each company in 2020.
Depreciation and Amortization
Identify what activity would depreciation and amortization be reported on in each company’s statement of cash flow using the indirect method.
Explain why each company reported on depreciation and amortization where they did in their statement of cash flows.
Identify the amount of depreciation and amortization for each company.
Statement of Cash Flows and Ratios
Compute the current cash debt coverage for each company.
Compute the cash debt coverage for each company.
Explain what conclusions can be drawn from the
current cash debt coverage ratio and the cash debt coverage ratio for
each company. Address the following questions in your response:
What conclusions can be drawn from the current cash debt coverage ratio?
What conclusions can be drawn from the cash debt coverage ratio
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