FIN254 GROUP 7 Final Report 1

Course Title: Introduction To Financial Management
Course: FIN254, Section: 14, Summer-2023
Financial Analysis
Submitted By (GROUP 7 ) :
Student Name: Student ID :
Muntaha Syead 2031685630
Subhana Bintay Azam 2231443630
Novera Kaiser 2031472630
Irteza Jawad Khan 2012618630
Submitted to:
Iftear Ahmed Chowdhury (IAC)
Department OF Accounting &
Finance
School of Business & Economics, North South University
Date Of Submission : 25th November, 2023
Letter of Transmittal
25th November, 2023
To,
Iftear Ahmed Chowdhury
Lecturer
Department of Accounting and Finance
North South University School of Business and Economics. Subject:
Submission of Financial Analysis Report
Dear Honorable Sir,

With due respect we are the student of your course (Fin254, section 14) beg to state that we would like to
inform you, it is a great pleasure to submit you Project report on “Financial Analysis”. Our final report is based
on data from various financial ratios throughout years of 2018 to 2022. We are very happy to present this
assignment to you as part of our course requirement. The task was completed with the information we
gained from the "Introduction to Financial Management" course.
This (our) 5 years project will help you to know about the ratios of Arla Foods, Kellogg’s, Coca-Cola Pepsi Co
and Nestle. In the end, we analyze the whole report and recommend some important things that
companies should follow.
Thank you for your cordial and honest efforts to create us acquainted with the terms and conditions of
"Ratio Analysis" that help us deliver a good document. Our actions will be appreciated if this study will
serve as a basis for what it is meant for and our assistance will be available for any inquiry
Sincerely,
Yours obedient,
Muntaha Syead 2031685630
Subhana Bintay Azam 2231443630
Novera Kaiser 2031472630
Irteza Jawad Khan 2012618630
Executive Summary
This report is on provides a comprehensive overview of the financial performance of Arla
Foods, PepsiCo, Coca-Cola, Nestlé, and Kellogg's through Ratio analysis. The analysis covers
key financial ratios spanning liquidity, profitability, efficiency, and solvency. The purpose is to
offer stakeholders and investors the insights into the companies' financial health and aid in
informed decision-making. Their constantly striving for innovating superior quality products and
services. All these Five companies are Market giants which grew and expanded rapidly with a
strong reputation for excellence in innovation and entrepreneurship throughout the successful
years.
In this report we have analyzed and interpreted the trend of some financial ratios
throughout the years 2018 to 2022 Using time series analysis. We have then reviewed and giving
an overall broader picture of the strengths and weaknesses of the company based on our findings
of the financial ratios. We have also discussed some of the financial problem faced by the
company and advised some solution to these problems. All these ratio analyses and their
interpretation will help a person know about the financial status of the company during the
period. All the company's financial data was collected from the company’s official website.
These collected data were used in Microsoft Excel to calculate the different ratios and make the
graphs.
The analysis aims to present a balanced view of each company's financial

performance, highlighting strengths and areas for improvement. It enables stakeholders to
compare and contrast the financial positions of Arla Foods, PepsiCo, Coca-Cola, Nestlé, and
Kellogg's, fostering a deeper understanding of their competitive positions within the industry
with the help of Benchmarking.
ARLA FOODS
COMPANY OVERVIEW
Arla Foods is a global dairy cooperative that stands as one of the largest and most renowned
players in the dairy industry. Founded in 2000 through a merger of Swedish Arla and Danish MD
Foods, the cooperative is owned by approximately 9,400 farmers across Europe, making it
unique in its structure and approach. With a mission to secure the highest value for its farmers'
milk while creating tasty, nutritious, and natural dairy products, Arla Foods has positioned itself
as a leading force in the dairy sector.
Ratio analysis
 LIQUIDITY RATIO
i. Current Ratio
Current ratio measure what current assets a firm has for every dollar of current liabilities. This
ratio is important to understand the liquidity for a firm in a specific year.
YEAR 2022 2021 2020 2019 2018

CURRENT RATIO 1.55 1.28 1.22 1.24 1.21
CURRENT RATIO
2.00
1.50
1.00
0.50
0.00
2022 2021 2020 2019 2018
 Time Series Analysis: We can see in the above chart that Arla Foods has been successful
to become more liquid over the past 5 years. Although in 2020, its short-term assets were
low for which liquidity was lower in comparison to 2019 and 2021. 2022’s current ratio
is the highest in the whole 5-year timeline.
ii. Quick Ratio
Quick ratio is also known as Acid- Test ratio which measures the instantaneous liquidity of a
firm. A firm must use this to measure its ability to pay for every single dollar of current liabilities
instantly.
YEAR 2022 2021 2020 2019 2018

QUICK RATIO 0.89 0.77 0.77 0.77 0.77
QUICK RATIO
0.90
0.85
0.80
0.75
0.70
2022 2021 2020 2019 2018
 Time Series Analysis: If we compare Arla Food’s quick ratio from 2018 to 2022, we
can observe that from year 2018 to 2021 the ratio was consistently 0.77 but in 2022 we
observe a change in Arla Food’s quick ratio (0.89). If we refer to the balance sheet for
2022, we can see that the reason behind this change was particularly for the higher
Current Assets and relatively similar Inventories with other years.
 ACTIVITY RATIO
i. Inventory Turnover
A firm uses this ratio to measure how many times it has sold their inventory in a specific time
period.
YEAR 2022 2021 2020 2019 2018
INVENTORY TURNOVER 6.29 7.07 7.69 7.62 7.60
INVENTORY TURNOVER
10.00
8.00
6.00
4.00
2.00
2022 2021 2020 2019 2018
0.00
 Time Series Analysis: By looking at the graph above, we can see that Arla foods
Inventory Turnover ratio was more or less in a constant state from 2018 to 2021
except for 2022 where the Turnover ratio drastically hit to 6.29 which means that
during this year, company was not able to sell their inventory as efficiently as they
could.
ii. Average Age of Inventory

This ratio measures how many days in a period it took to sell the inventory in a company.
YEAR 2022 2021 2020 2019 2018
AVERAGE AGE OF INVENTORY 58.03 51.63 47.49 47.88 48.02
AVERAGE AGE OF INVENTORY

70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
20222021202020192018
 Time Series Analysis: According to the table above, the lowest Avg Age of Inventory for
Arla Foods was in 2018 with 48.02. This means, Approximately, it took 48.02 days to
sell each of their inventory whereas in 2022, it took approximately 58.03 days.
iii. Average Collection Period

This ratio measures how many days in a period it took for the company to collect every single
dollar of receivable.
YEAR 2022 2021 2020 2019 2018
AVERAGE COLLECTION PERIOD 41.97 42.10 42.35 39.15 43.52
AVERAGE COLLECTION PERIOD

44.00
42.00
40.00
38.00
2022 2021 2020 2019 2018
36.00
 Time Series Analysis: Arla Foods had collected their receivables within approximately
43.52 days in 2018, 39.15 days in 2019, 42.35 days in 2020, 42.10 days in 2021 and
41.97 days in 2022. By looking at the table, its safe to assume that Arla Foods has
efficiently collected their receivables only in 2019 which was within approximately
39.15 days.
iv. Average Payment Period

This ratio measures how many days it took for a company to pay every single dollar of payables.
YEAR 2022 2021 2020 2019 2018
AVERAGE PAYMENT PERIOD 52.30 59.79 53.29 50.77 52.27
65.00
AVERAGE PAYMENT PERIOD
60.00
55.00
50.00
45.00
2022 2021 2020 2019 2018
 Time Series Analysis: By looking at the chart above, we can see that Arla Foods had
paid their payables from 2018 to 2022 within 50-60 days. The highest ratio from this
chart is
59.79 which interprets as Arla foods paying their payables in approximately 59.79 days.
v. Total Asset Turnover
This ratio measures how much sales revenue was generated by using every single dollar of total
assets in a company.
YEAR 2022 2021 2020 2019 2018
TOTAL ASSET TURNOVER 1.58 1.43 1.45 1.48 1.57
TOTAL ASSET TURNOVER

1.60
1.55
1.50
1.45
1.40
1.35
2022 2021 2020 2019 2018
 Time Series Analysis: In the table above, we can see that the Asset turnover ratio for
Arla Foods has been more or less constant over the last 5 years. The highest ratio among
these 5 is 1.58 in 2022. This interprets as Arla Foods generating 1.58 dollars of revenue
for every single dollar of assets they used.
 SOLVENCY RATIO
i. Debt Ratio
Debt ratio is important for firms to measure the proportion of total assets financed by the firm’s
creditors.
YEAR 2022 2021 2020 2019 2018
DEBT RATIO 0.64 0.63 0.64 0.65 0.56
DEBT RATIO
0.66
0.64
0.62
0.60
0.58
0.56
0.54
0.52
0.50
2022 2021 2020 2019 2018

 Time Series Analysis: Arla Food’s Debt ratio has been roughly the same throughout the
last 5 years except for in 2018 where the debt ratio was really low at 0.56. This value
indicates that the firm has financed close to half of its assets with debt (56%) as of 2018.
ii. Times Interest Earned Ratio

This ratio measures the firm’s ability to make contractual interest payments. The higher its
value, the better able the firm is to fulfill its interest obligations.
YEAR 2022 2021 2020 2019 2018
TIMES INTEREST EARNED RATIO 6.61 7.67 6.36 6.88 6.52
TIMES INTEREST EARNED RATIO

10.00
8.00
6.00
4.00
2.00
0.00
2022 2021 2020 2019 2018
 Time Series Analysis: Over the last 5 years, Arla had their times interest earned ratio
around 6.5 to 6.8. Although in 2021, their ratio was 7.67 and in 2020, it was 6.36. Which
means in 2021 Arla Foods had $7.67 to pay for every dollar of interest and in 2020, Arla
Foods had $6.36 to pay for every dollar of interest.
 PROFITABILITY RATIO
i. Gross Profit Margin
This ratio measures the percentage of each sales dollar remaining after the firm has paid for its
cost of goods sold.
YEAR 2022 2021 2020 2019 2018

GROSS PROFIT MARGIN 0.19 0.21 0.22 0.21 0.22
GROSS PROFIT MARGIN
0.23
0.22
0.21
0.20
0.19
0.18
0.17
2022 2021 2020 2019 2018
 Time Series Analysis: Arla Foods’s has had the best gross profit margin in 2018 and 2020
with 0.21. Over the past 5 years, Arla foods gross margin has not improved that much.
ii. Operating Profit Margin
This ratio measures the percentage of each sales dollars remaining after deducing all costs and
expenses other than interests, taxes and preferred stock dividends.
YEAR 2022 2021 2020 2019 2018
OPERATING PROFIT MARGIN 0.04 0.04 0.04 0.04 0.04
OPERATING PROFIT MARGIN

0.04
0.04
0.04
0.04
2022 2021 2020 2019 2018

0.04
 Time Series Analysis: Arla Foods operating profits margin have been constant for the
last 5 years which shows consistency in firm’s earnings.
iii. Net Profit Margin
This ratio measures the percentage of each sales dollar remaining after all costs and expenses
including interest and taxes.
YEAR 2022 2021 2020 2019 2018
NET PROFIT MARGIN 0.03 0.03 0.03 0.03 0.03
NET PROFIT MARGIN
0.03
0.03
0.03
0.03
2022 2021 2020 2019 2018
0.03
 Time Series Analysis: Again, in the table above, we can see the consistency of
Arla Food’s earnings for common stock holders. The value 0.03 interprets as Arla
foods making $0.03 dollars from each dollar of sales.
iv. Earnings Per Share
This ratio shows how much earnings a company makes per share of outstanding stock.
YEAR 2022 2021 2020 2019 2018

EARNINGS PER SHARE 4 3.46 3.52 3.23 3.01
EARNINGS PER SHARE

5
4
3
2
1
0
20222021202020192018
 Time Series Analysis: Arla Foods EPS for the last 5 years has been roughly around 4-3.
The lowest EPS for Arla foods was in 2018 with $3.01 and highest EPS for Arla foods
was in 2022 with $4 per share of outstanding stock.
v. Return on Assets (ROA)
ROA measures the overall effectiveness of management in generating profits with its available
assets.
YEAR 2022 2021 2020 2019 2018
ROA 0.05 0.04 0.05 0.05 0.05
ROA
0.05
0.05
0.05
0.04
0.04
20222021202020192018
 Time Series Analysis: The ROA ratio for Arla foods for the last 5 years has been
constant at 0.05, except for in 2021. The ROA in 2021 for Arla foods in 0.04. This
interprets as Arla foods generating 0.04 dollars of profits with its available assets in
2021.
vi. Return on Equity (ROE)
ROE focuses on the earnings that a company generates relative to the equity invested in the firm.
YEAR 2022 2021 2020 2019 2018
ROE 0.13 0.12 0.13 0.13 0.12
ROE
0.14
0.13
0.13
0.12
0.12
0.11
20222021202020192018
 Time Series Analysis: For Arla Foods, the ROE from 2018 to 2022 was roughly the
same at 0.13. This interprets as Arla foods generating roughly 0.12 to 0.13 dollar of
earnings for common stockholders for every single dollar of equity invested.
 MARKET RATIO
i. Price/Earnings Ratio
Price/Earnings ratio compares future expectation from current earnings
YEAR 2022 2021 2020 2019 2018
PRICE/EARNINGS RATIO 12.50 14.45 14.20 15.48 16.61
PRICE/EARNINGS RATIO
20.00
15.00
10.00
5.00
0.00
20222021202020192018
 Time Series Analysis: In this graph of P/E ratio, the ratio kept decreasing from year
2018 to year 2022. Which indicates that in 2018, investors were willing to pay 16.61
times higher than the company’s earnings but in 2022, investors were willing to pay
only 12.50 times higher.
ii. Market/Book Ratio

Market/Book ratio explains the market price of each common stock share and how high or low it
is compared to the Book value of stock
YEAR 2022 2021 2020 2019 2018
MARKET/BOOK RATIO 1.58 1.72 1.89 2.00 1.98
MARKET/BOOK RATIO
2.50
2.00
1.50
1.00
0.50
0.00
20222021202020192018
 Time Series Analysis: M/B ratio among five years in Arla foods were more or less same
except for the high M/B ratio in 2019. In 2019, the market price of each common stock
share was 2 times higher than the book value of common stock share.
Du Pont Analysis
Dupont system of analysis is used to dissect the firm’s financial statement and to assess its financial
condition.
For Arla Foods,
DuPont Formula
ROA (2022) = Net Profit Margin X Total Asset Turnover

= 0.03 x 1.58 = 0.05
= 0.03 x 1.43 = 0.04
= 0.03 x 1.45 = 0.05
= 0.03 x 1.48 = 0.05
= 0.03 x 1.57 = 0.05
We can see from the above calculations that Arla foods managed their assets more efficiently in 2022 and
less efficiently in 2021 by comparing the Total Asset Turnover part of the ROA calculations. Their Net
Profit Margin is the same for each year.
Modified DuPont Formula
In this formula, we use Financial Leverage Multiplier (FLM) which gives an idea about how risky it is to
invest in a firm. FLM is also referred to as the equity multiplier.
FLM= Total Assets/Common Stock

Equity ROE= ROA x FLM
FLM (2022) = 8746/3168=2.76

ROE (2022) =0.05 x 2.76 = 0.13
FLM (2021) =7813/2910=2.68

ROE (2021) = 0.04 x 2.68= 0.12
FLM (2020) =7331/2639=2.77

ROE (2020) = 0.05 x 2.77= 0.13
FLM (2019) =7106/2494=2.85

ROE (2019) = 0.05 x 2.85 = 0.13
FLM (2018) =6635/2519=2.63

ROE (2018) = 0.05 x 2.63= 0.12
We can evaluate from the above calculations that Arla foods has the highest FLM in 2019, which
interprets as Arla foods stocks are profitable but risky. Lowest risk was in 2018 with FLM 2.63.
Nestlé
Company Overview
Regarding sales, Nestle is one of the world's largest food corporations. It is a Swiss company that
was founded in 1866 by Henri Nestle. Its primary focus is on food and beverages, although it
offers close to 2000 goods in all. Its most well-known goods and brands include Maggi, Kit Kat,
Nespresso, Nescafe, and others.
With 418 plants operating in 86 countries, it employs close to 339,000 people globally. Nestle
goods may be found in 191 nations worldwide.
In the area of nutritional sciences, Nestle is a pioneering researcher as well. Every year, it
allocates around 1.5 billion Francs to research and development. Nestle operated 17 R&D and
testing facilities globally as of 2018.
Time Series Analysis 2018-2022
1. Liquidity Ratios
Current Ratio
Current Ratio 0.95 0.86 0.86 0.98 0.88
Analysis:
Nestle's current ratio from 2018 to 2022 reveals a notable fluctuation pattern. Interestingly, the
Current Ratio peaked in 2021, signaling a peak in the company's ability to cover its short-term
obligations with its current assets. A higher current ratio is generally considered favorable,
indicating a robust capacity to meet immediate financial commitments. While the peak in 2021
showcases a commendable liquidity position, the subsequent variations beckon a closer
inspection into the dynamics influencing Nestle's short-term financial health.
Quick Ratio
Quick Ratio 0.74 0.63 0.60 0.68 0.50

Analysis:
Notably, the Quick Ratio, a vital component of the current ratio that gauges a company's ability
to meet short-term obligations with its most liquid assets, reached its pinnacle in 2021. This
surge in the Quick Ratio suggests a commendable liquidity position during that specific year.
However, the overall trajectory of the current ratio exhibits a random pattern of increases and
decreases over the specified period.
2. Activity Ratios
Inventory Turnover
Inventory Turnover 5.05 4.99 4.25 3.79 3.45
Analysis:
The company experienced its highest inventory turnover in 2018, indicating a commendable
efficiency in managing and selling its stock during that period. However, a closer look at recent
years, particularly 2021 and 2022, unveils a concerning downturn. The inventory turnover
peaked in 2018 and has since shown a decline. As higher inventory turnover is generally
perceived as a positive indicator of operational efficiency, this recent dip may warrant further
investigation into Nestle's inventory management strategies during the specified period.
Average Age of Inventory
Average Age of Inventory (365 days) 72.29 73.11 85.80 96.19 105.94
Analysis:
2022 witnessed the highest average age of inventory, indicating a gradual increase in the number
of days it took for Nestle to deplete its inventory compared to the preceding years. This uptrend
in the average age of inventory raises red flags as it signifies a potential inefficiency in inventory
turnover. The time series graph depicting this gradual increase in the days in the average age of
inventory underscores the importance of swift inventory turnover. Keeping inventory on the
shelves for extended periods can adversely affect a company's financial health.
Average Collection Period
Average Collection Period (365 days) 47.88 49.26 49.37 51.57 47.76
Analysis:
The average Collection Period is a pivotal metric influencing the company's receivables
management efficiency. Traditionally, a shorter average collection period is considered
advantageous, as it signifies a more prompt conversion of credit sales into cash. Notably, 2021
emerges as a standout year with the highest average collection period, indicating that Nestle took
more time to collect its accounts receivable than the surrounding years. In 2021, it exceeded 50
days compared to the previous and following year periods, which lie between 47 to 49 days.
Average Payment Period
Average Payment Period (365 days) 141.02 147.13 157.27 167.83 144.77
Analysis:
Conventionally, a shorter average payment period is perceived as advantageous, suggesting a
swifter settlement of obligations to suppliers. The observed increase in the average payment
period in 2021 stands out as a distinctive year with the highest average payment period,
indicating that Nestle took more time to settle its accounts payable than in the previous and
following years.
Total Asset Turnover
Total Asset Turnover 0.67 0.73 0.68 0.63 0.70

Analysis:
The Total Asset Turnover Ratio is a critical indicator of operational efficiency. Reviewing
Nestle's data from 2018 to 2022 brings attention to the Total Asset Turnover Ratio, a key metric
reflecting the efficiency with which the company utilizes its assets to generate revenue. Notably,
2019 is a noteworthy year with the highest Total Asset Turnover Ratio, indicating that Nestle
achieved optimal revenue generation relative to its total assets during that period.
3. Solvency Ratios
Debt Ratio
Debt Ratio 0.57 0.59 0.62 0.61 0.68
Analysis:
Debt Ratio reached its peak in 2022, signifying the highest level of debt relative to total assets
during this period. Conversely, the lowest Debt Ratio was observed in 2018. The gradual
increase in the Debt Ratio over the years suggests a growing reliance on debt as a source of
financing for Nestle. While debt can be a valuable tool for funding expansion and strategic
initiatives, a consistently rising Debt Ratio raises considerations about the company's overall
financial risk and leverage.
Time Interest Earned Ratio
Time Interest Earned Ratio 16.66 18.78 27.41 20.31 18.20
Analysis:
The Time Interest Earned (TIE) Ratio is a crucial metric gauging a company's ability to cover its
interest expenses with its operating income. 2020 emerges as a standout year with the highest
TIE Ratio, indicating that Nestle exhibited robust capability to cover its interest obligations
during that period. Conversely, the lowest TIE Ratio was observed in 2018. However, after the
peak in 2020, the TIE Ratio has gradually declined.
4. Profitability Ratios
Gross Profit Margin
Gross Profit Margin 0.50 0.50 0.49 0.48 0.45
Analysis:
The Gross Profit Margin Ratio is a critical indicator of a company's ability to generate profits
from its core business activities after deducting the cost of goods sold. 2018 and 2019 are
noteworthy years with the highest Gross Profit Margin Ratio, indicating profitability during
those specific periods. However, a closer examination reveals a slight decrease in the ratio from
2020 to 2022. Over the latter years, the observed decrease in the Gross Profit Margin Ratio
prompts a closer look at Nestle's cost structures, pricing strategies, and potential external factors
impacting profitability.
Operating Profit Margin
Operating Profit Margin 0.11 0.14 0.15 0.20 0.10
Analysis:
2021 is a significant year with the highest Operating Profit Margin Ratio, indicating good
profitability. However, the subsequent year, 2022, saw a notable drop, marking the lowest
Operating Profit Margin Ratio during this period. The sudden decrease in the Operating Profit
Margin Ratio from 2021 to 2022 prompts a critical examination of Nestle's operational
performance and profitability drivers.
Net Profit Margin
Net Profit Margin 0.04 0.06 0.06 0.11 0.02

Analysis:
Analyzing Nestle's data over the years 2018 to 2022 reveals a significant pattern in the Net Profit
Margin Ratio, a crucial metric reflecting the company's profitability as a percentage of its
revenue. From 2018 to 2020, the Net Profit Margin Ratio gradually increased, reaching its peak
in 2021. However, the subsequent year, 2022, witnessed a sudden drop, marking the lowest Net
Profit Margin Ratio during this period.The gradual increase in the Net Profit Margin Ratio from
2018 to 2020 indicated improving profitability, culminating in a peak in 2021. The sudden drop
in 2022 prompts a thorough examination of Nestle's financial performance and the factors
influencing this significant decline.
Earnings Per Share
Earnings Per Share (given) 3.36 4.30 4.30 6.06 3.42
Analysis:
Notably, 2021 stands out as a significant year with the highest Earnings Per Share, indicating
robust profitability and value generation for shareholders. Conversely, in the surrounding years
of 2018, 2019, 2020, and 2022, the Earnings Per Share remained relatively stable. The peak in
Earnings Per Share in 2021 suggests that Nestle experienced exceptional profitability during that
specific period, resulting in higher earnings available to each shareholder. This could be
attributed to various factors such as increased revenue, cost management, or other positive
financial developments.
5. Du-Pont Analysis
Return on Assets (ROA)
Return On Assets (ROA) 0.03 0.04 0.04 0.07 0.02
Return On Equity (ROE)
Return On Equity (ROE) 0.06 0.10 0.10 0.17 0.05
Analysis:
Conducting a DuPont analysis on Nestle's financial performance from 2018 to 2022 provides
valuable insights into the drivers behind Return on Assets (ROA) and Return on Equity (ROE).
Notably, 2021 emerges as a standout year where both ROA and ROE reached their highest
levels. However, in the surrounding years of 2018, 2019, 2020, and 2022, these metrics remained
consistently much lower.
The DuPont analysis breaks down ROA and ROE into their component parts, allowing us to
understand the factors contributing to their movements. ROA, indicates how efficiently Nestle
generates profits from its assets. Similarly, ROE provides insights into the company's ability to
generate returns for its equity holders. The peak in ROA and ROE in 2021 suggests that Nestle
experienced an exceptional alignment of profitability, asset utilization, and efficient use of equity
during that specific period. The factors contributing to this peak could include improved
operational efficiency, effective cost management, or successful revenue generation.
6. Market Ratios
Price Earning Ratio
Price Earning Ratio 29.76 23.26 23.26 16.50 29.24
Analysis:
The market price per share has remained relatively constant over the specified period. However,
the P/E Ratio, which is calculated by dividing the market price per share by the earnings per
share, exhibited a distinctive pattern. In 2018 and 2022, Nestle recorded its highest P/E Ratios,
indicating that investors were willing to pay a premium for each unit of earnings. Conversely, the
lowest P/E Ratio was observed in 2021. This variation prompts a closer examination of the
factors influencing investor sentiment and valuation during these years.
Market Book Ratio
Market Book Ratio 1.71 1.89 2.15 1.86 2.34

Analysis:
The M/B Ratio, which compares the market price per share to the book value per share, exhibited
a subtle increase over the years, reaching its highest level in 2022. The constant market price per
share implies that changes in the M/B Ratio are driven by shifts in the book value per share or
other factors influencing investor perceptions. The highest M/B Ratio in 2022 suggests that
investors are placing a premium on Nestle's book value, possibly due to positive expectations
about the company's assets, growth prospects, or overall financial health.
The Coca-Cola Company Overview
One of the major international players in the beverage sector is The Coca-Cola Company. With
more than 200 bottling partners worldwide, the company has its headquarters in Atlanta,
Georgia. It would be difficult to find someone who hasn't heard of Coca-Cola, or who couldn't
identify the famous white letters set against the vibrant red background of this well-known
worldwide brand. Coca-Cola has routinely rated as the best soft drink brand in the world. Diet
Coke, Sprite, and Fanta are among the other soft drink brands that the Coca-Cola Company
produces and markets. Coca-Cola has consistently been at the forefront of innovation making it
the largest manufacturer and distributor in the world, introducing new products and adapting to
changing consumer preferences. The company's commitment to sustainability is evident through
initiatives like water replenishment, packaging recycling, and efforts to reduce its environmental
impact.
Beyond its business operations, Coca-Cola is actively involved in community engagement,

sports sponsorships, and various philanthropic initiatives. The brand's enduring success is not
only a testament to its marketing prowess but also its ability to evolve with the times while
maintaining the core values that have made it a beloved global brand for over a century.
Ratio Analysis
1. Liquidity Ratios
i. Current Ratio
Organizations need to be aware of the current ratio since it indicates a company's capacity to pay down
short-term debt and loans with one-year maturities.
Year 2022 2021 2020 2019 2018
Current ratio 1.15 1.13 1.32 0.76 0.87

Current Ratio
1.4
1.2
0.8
0.6
0.4
0.2
2022 2021 2020 2019 2018
0
Current Ratio
 Time series perspectives: The current ratio remained relatively stable from 2018 to
2019, with a minor decrease from 1.15 to 1.13. This suggests that Coca-Cola maintained
a reasonable balance between its current assets and liabilities during this period. In 2020,
there was a notable increase in the current ratio to 1.32. This indicates an improvement
in Coca-Cola's short-term liquidity position, possibly due to effective management of
current assets and liabilities. The current ratio took a significant dip in 2021, dropping to
0.76. This sharp decline raises concerns about the company's ability to cover short-term
obligations with its current assets during that year. There is a partial recovery in 2022,
with the current ratio increasing to 0.87. While this is an improvement from the previous
year, it is still lower than the ratios observed in 2018, 2019, and 2020.
ii. Quick Ratio:

The instantaneous liquidity is measured by the acid-test ratio. Any organization must use the
quick ratio because it measures the company's capacity to repay its upcoming short-term debt
and provides a sense of the company's capacity to settle loans with maturities within a year.
Year 2022 2021 2020 2019 2018
Quick ratio 0.93 0.958 1.09 0.63 0.759

QUICK RATIO
1.2
0.8
0.6
0.4
0.2
2022 2021 2020 2019 2018
QUICK RATIO
 Time series perspectives:

The quick ratio remained relatively stable from 2018 to 2019, with a slight decrease from 0.759
to 0.63. This suggests that Coca-Cola maintained a consistent balance between its most liquid
assets and short-term liabilities during this period. The increase in 2020 suggests improved
liquidity, while the decreases in 2021 and 2022 raise concerns about the company's short-term
financial position. It indicates that Coca-Cola's ability to cover short-term obligations with its
most liquid assets has not fully recovered.
2. Asset Management Ratios/ Activity Ratios:

i. Inventory Turnover:
This ratio Indicates how many times we have sold in a year.
Year 2022 2021 2020 2019 2018
Inventory Turnover 4.25 4.498 4.11 4.32 4.25

Inventory Turnover
4.6
4.5
4.4
4.3
4.2
4.1
3.9
2022 2021 2020 2019 2018
Inventory Turnover
Coca-Cola's inventory turnover ratios over the years indicate a generally effective and
stable management of inventory. The slight fluctuations may be influenced by
various internal and external factors affecting supply and demand.
Consistency (2018-2022): Coca-Cola has maintained a relatively consistent inventory turnover
ratio over the five-year period. The values range from 4.11 to 4.498, indicating a stable and
efficient management of inventory.
ii) Average Collection period:

Indicates How often we have collected our receivables.
Company needs to collect its receivables more frequently. The higher turnover ratio, the better
management the business has.
Year 2022 2021 2020 2019 2018
Average Collection 29.6 33.2 34.8 38.9 39.2

period
Average Collection Period
45
40
35
30
25
20
15
10
5
0
2022 2021 2020 2019 2018
20222021202020192018

Generally decreasing trend from 2018 to 2022. In 2018, the average collection period was 39.2
days, and it has steadily decreased to 29.6 days in 2022. This indicates an improvement in the
efficiency of Coca-Cola's credit and collection processes, allowing the company to convert its
accounts receivable into cash more quickly.
iii) Average Payment Period:

Any organization must use the average payment period to measure the average number of days it
needs to pay its bills and obligations. Indicates How long did it take to pay every single dollars
of its debt. The higher the payment extend period the better at some extent
Year 2022 2021 2020 2019 2018
Average Payment 35.7 43.5 55.9 63 64.87

Period
Average Payment Period
70
60
50
40
30
20
10
0
2022 2021 2020 2019 2018
20222021202020192018

Coca-Cola, representing the average number of days it takes the company to pay its suppliers,
has shown a decreasing trend from 2018 to 2022. In 2018, the average payment period was
64.87 days, and it has steadily decreased to 35.7 days in 2022. This decline indicates that Coca-
Cola has been able to settle its payables more efficiently over the analyzed period.
iv) Average Age of Inventory:

The average number of days it takes a company to sell off its inventory is known as the average
age of inventory. Analysts use this indicator to assess how effective sales are.
Year 2022 2021 2020 2019 2018
Average Age of 85.9 81.1 88.8 84.5 85.8

Inventory
Average Age Of Inventory
90
88
86
84
82
80
78
76
2022 2021 2020 2019 2018
Average Age Of Inventory

In 2018, the average age of inventory was 85.8 days, and it has since fluctuated within
a relatively narrow range, reaching 85.9 days in 2022. This suggests a consistent effort
by Coca-Cola to manage its inventory effectively, with a focus on optimizing turnover.
The slight fluctuations in the average age of inventory may be influenced by factors such
as changes in demand, supply chain dynamics, and production cycles.
iv) Total Asset Turnover:
This ratio provides insights into how efficiently a company utilizes its assets to generate sales. A
higher Total Asset Turnover generally indicates more efficient asset utilization and revenue
generation.
Year 2022 2021 2020 2019 2018

Total ASSET TURNOVER 0.464 0.409 0.378 0.4314 0.412
Total ASSET TURNOVER

0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2022 2021 2020 2019 2018
Total ASSET TURNOVER

Coca-Cola's Total Asset Turnover has demonstrated a consistent and positive trend over the five-
year period from 2018 to 2022. Starting at 0.412 in 2018, the ratio has steadily increased to 0.464
in 2022. This indicates an improvement in the company's ability to generate revenue relative to
its total assets.
A rising Total Asset Turnover suggests enhanced efficiency in utilizing its asset base to
generate sales, showcasing effective management of resources and potentially more streamlined
operations.
3. Debt Ratio
i. Debt Ratio
Measures the overall debt to the total assets of a corporation. It is employed to assess the financial
leverage and its ability to meet its debt obligations.
Year 2022 2021 2020 2019 2018
Debt Ratio 3.4 2.7 3.26 9.48 8.02
Debt Ratio
10
9
8
7
6
5
4
3
2
1
0
2022 2021 2020 2019 2018
Debt Ratio

The debt ratio for Coca-Cola, which represents the proportion of the company's assets financed
by debt, has shown some variability over the five-year period from 2018 to 2022. In 2018, the
debt ratio was 8.02%, and it increased significantly in 2019 to 9.48%. However, since then, the
ratio has demonstrated a decreasing trend, reaching 3.4% in 2022.
ii) TIMES INTEREST EARNED RATIO
The interest coverage ratio, also known as times interest earned, is a measurement used to assess
a company's capacity to make debt payments.
Year 2022 2021 2020 2019 2018
TIMES INTEREST 23.3 35.8 23.2 17.4 9.35

EARNED RATIO
Times Interest Earned Ratio

40
35
30
25
20
15
10
5
2022 2021 2020 2019 2018
0

The Times Interest Earned (TIE) ratio for Coca-Cola, which measures the company's ability to
cover its interest expenses with its earnings before interest and taxes (EBIT), has shown a
positive and improving trend from 2018 to 2022. In 2018, the TIE ratio was 9.35, and it has
steadily increased each year, reaching 23.3 in 2022.
4. PROFITABILITY RATIO:
i) GROSS PROFIT MARGIN
The gross profit margin is calculated to get the idea of what the business made after paying for
direct cost of doing business.
Year 2022 2021 2020 2019 2018
GROSS PROFIT 58.1 60.2 59.3 60.8 61.9

MARGIN
Gross Profit Margin

63
62
61
60
59
58
57
56
2022 2021 2020 2019 2018
Gross Profit Margin

Coca-Cola's gross profit margin has exhibited a relatively stable performance over the five-year
period from 2018 to 2022. Starting at 61.9% in 2018, the margin experienced a modest decline in
subsequent years, reaching 58.1% in 2022. While there is a slight decrease, the company has
maintained a robust gross profit margin, indicating effective cost management and pricing
strategies.
ii) Net Profit Margin
Investors can determine whether a company's management is making enough money from sales
and whether operating and overhead expenses are under control by looking at the net profit
margin. Investors can determine whether a company's management is making enough money
from sales and whether operating and overhead costs are under control by looking at the net
profit margin. The Net profit is the amount that is available to common stockholders. A business
will be more profitable every year if its net profit margin is higher.
Year 2022 2021 2020 2019 2018
Net Profit Margin 18.4 29.9 18.9 19.9 18
Net Profit Margin

35
30
25
20
15
10
0
Category 1 2021 2020 2019 2018
Net Profit Margin
Coca-Cola's net profit margin has demonstrated some variability over the five-year period from
2018 to 2022. Starting at 18% in 2018, the margin increased notably in 2021 to 29.9%,
showcasing a significant improvement in profitability. However, in 2022, there was a decline to
18.4%. Despite this, the company has generally maintained a healthy net profit margin,
reflecting efficient cost management and revenue generation.
iii) OPERATING PROFIT MARGIN
By calculating the operating profit margin, one can determine how well a target firm
performs relative to its peers and, more specifically, how well it controls expenses to
maximize profitability.
Year 2022 2021 2020 2019 2018
OPERATING 24.3 25.6 26 26.3 25.9

PROFIT MARGIN

26.5
26
25.5
25
24.5
24
23.5
23
2022 2021 2020 2019 2018
Coca-Cola's operating profit margin has remained relatively stable over the five-year period from
2018 to 2022. Starting at 25.9% in 2018, the margin experienced minor fluctuations, reaching
24.3% in 2022. This suggests consistent operational efficiency and effective management of
operating expenses. While there is a slight decrease in 2022, the overall trend indicates the
company's ability to maintain a strong operating profit margin, reflecting resilience in its core
business operations.
iv) EARNINGS PER SHARE (EPS):
Earnings per share (EPS) is an indicator that is frequently utilized to determine a
company's value. It represents the amount of money a company makes for each share of its
stock.
Year 2022 2021 2020 2019 2018
EARNINGS PER 1.12 1.25 3.34 1.06 3.89

SHARE (EPS)
Earnings Per Share (EPS)

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2022 2021 2020 2019 2018
Earnings Per Share (EPS)

Coca-Cola's Earnings Per Share (EPS) has shown variability over the five-year period from
2018 to 2022. Starting at 3.89 in 2018, there was a significant increase in 2020 to 3.34,
followed by a decline in 2021 to 1.25 and further to 1.12 in 2022. The fluctuations may be
influenced by factors such as changes in net income, share buybacks, or other financial
strategies.
v) Return On Assets (ROA):
Return on asset ratio helps you determine how your company generates its earnings and how
you compare to your competitors. Indicates the profit company made by using its assets.
Year 2022 2021 2020 2019 2018

ROA 8.51% 7.40% 7.15% 8.61% 7.42%
ROA
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2022 2021 2020 2019 2018
ROA

Coca-Cola's Return on Assets (ROA) has exhibited consistent performance over the five-year
period from 2018 to 2022. With a slight increase from 7.42% in 2018 to 8.51% in 2022, the
company has demonstrated effective utilization of its assets to generate returns. The stable and
positive trend in ROA suggests that Coca-Cola has maintained efficiency in deploying its
resources for profitability, indicating sound operational management and strategic decision-
making.
vi) Return On Equity (ROE):
A company's ability to generate income from equity, or the money contributed by its
investors plus cumulative retained profits, is measured by its return on equity (ROE). ROE
shows how well a business can convert equity capital into net profit.
Year 2022 2021 2020 2019 2018

ROE 17.30% 17.50% 13.60% 14.80% 14.02%
ROE
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2022 2021 2020 2019 2018
ROE

Coca-Cola's Return on Equity (ROE) has shown a relatively steady performance over the five-
year period from 2018 to 2022. With slight fluctuations, the ROE has remained within the range
of 13.60% to 17.50%. The consistent positive trend indicates the company's ability to generate
solid returns for its shareholders relative to their equity investments.
5. Market Ratio
i) PRICE/EARNINGS RATIO
The investor pay certain amount of price for each share Price demonstrates what will be the
investors expectation about your future of your business Because when they buy their share, they
would get the return in future, the summation of the future return is their price. It demonstrates
the price earning ratio. Here, the compared the future expectation of the Business with your
current Earnings It is price-earnings ratio.
Year 2022 2021 2020 2019 2018
PRICE/EARNINGS 31.4 28.2 10.6 33.3 9.06

RATIO
Price/Earnings Ratio
35
30
25
20
15
10
0
2022 2021 2020 2019 2018
Price/Earnings Ratio

Coca-Cola's Price/Earnings Ratio (P/E ratio) has displayed considerable variability over the five-
year period from 2018 to 2022. Starting at 9.06 in 2018, the ratio increased significantly to 33.3
in 2019, then decreased in 2020 to 10.6, and subsequently rose again in 2021 and 2022 to 28.2
and 31.4, respectively. These fluctuations may reflect changes in market sentiment, earnings
expectations, or investor confidence.
ii) MARKET/BOOK RATIO
This Ratio compares that market value of the share with a book value of the share.
Year 2022 2021 2020 2019 2018
MARKET/BOOK 5.44 6.22 5.4 4.9 5.63

RATIO
Market/Book Ratio
7
0
Category 1 2021 2020 2019 2018
Market/Book Ratio

Coca-Cola's Market/Book Ratio has shown some fluctuation over the five-year period from 2018
to 2022. Starting at 5.63 in 2018, the ratio increased to 6.22 in 2019, followed by a decrease in
2020 to 5.4, and further declines in 2021 and 2022 to 5.44. The Market/Book Ratio compares the
market value of a company's equity to its book value, and the fluctuations may reflect changes in
investor sentiment and perceived future growth prospects.
DuPont Formula
Through the DU point analysis. We are going to get a better picture about the business. We are
going to incorporate different ratios. To get the better picture of our business. Investors will
analyze these ratios. Investors will make their investing decision based on this ratio. They want
to see the actual condition of the business when they're investing. The most lucrative thing is the
return. They Measure return by ROE.
= 18.4 x 0.464 = 8.54
= 29.9 x 0.409= 12.2
= 18.9x 0.378= 7.14
= 19.9x 0.4314= 8.58
= 18x 0.412= 7.42

The easiest way to raise fund for a company is to share their ownership we
prefer to borrow more than sharing our ownership. Through that leverages they increase their
return for their owners. Business by leveraging fund the increase the Return for owners. The
leverages amount compared to the investment That is actually found by the FLM
FLM= Total Assets/Common Stock Equity

ROE= ROA x FLM (total asset/common stock equity)
FLM (2022) = 92763/1760= 52.7
ROE (2022) =8.54x52.7= 45.08
FLM (2021) =94354/1760=53.6
ROE (2021) = 12.22x 53.6 = 0.675
FLM (2020) =87296/1760=49.6
ROE (2020) = 7.144x49.6= 3.17
FLM (2019) =86381/1760=49
ROE (2019) = 8.58x 49= 0.43
FLM (2018) =83216/1760=47.2
ROE (2018) = 7.42x47.2= 0.348
KELLOG’S COMPANY
Kellogg Company, often referred to simply as Kellogg's, is a multinational food manufacturing
company renowned for its breakfast cereals and other convenience foods. Founded by W.K.
Kellogg in 1906, the company has grown into one of the largest and most recognizable names in
the food industry globally. Kellog’s has a diverse portfolio of products.
 Breakfast Cereals: Cornflakes, Rice Krispies, Special K, Frosted Flakes and more
 Snacks: Nutri-Grain bars, Pop-Tarts, Pringles, and various granola bars
 Health & Wellness Products: Special K Protein Line, Kashi Products and more
 Frozen Foods: Eggo Waffles, MorningStar Farms etc
RATIO ANALYSIS
 LIQUIDITY RATIO
1. Current Ratio:
Current Ratio
2018 2019 2020 2021 2022
0.70 0.72 0.66 0.64 0.66
Time Series Analysis :

Kellogg's current ratio has been relatively stable over the years, ranging from 0.64 to 0.72. While
it indicates a generally healthy ability to cover short-term liabilities, a slight decrease from 2019
to 2020 and a subsequent increase in 2021 suggest fluctuations in liquidity. Overall, monitoring
changes in this ratio is crucial for assessing Kellogg's short-term financial health.
2. Quick Ratio:
Quick Ratio
2018 2019 2020 2021 2022
0.40 0.46 0.42 0.38 0.38
Kellogg's quick ratio has remained relatively consistent, hovering around 0.38 to 0.46 over the
years. This suggests a consistent ability to cover short-term obligations using its most liquid
assets, such as cash and receivables. While the quick ratio is lower than the current ratio, it
indicates Kellogg's reliance on slightly less liquid assets but still points to a reasonable short-
term liquidity position.
 ACTIVITY RATIO
1. Inventory Turnover:
Inventory Turnover
2018 2019 2020 2021 2022
6.55 7.46 7.05 6.93 6.08
Time Series Analysis : Kellogg's has experienced a generally stable inventory turnover over
the years, with a slight decrease in 2022by 6.08. The company efficiently manages its inventory,
but a declining trend may warrant attention to optimize supply chain processes.
2. Average Age of Inventory:
Average Age of inventory (Days)

2018 2019 2020 2021 2022
56 49 52 53 60

The average age of inventory for Kellogg's has shown variability over the years, peaking in
2022. This suggests potential challenges in managing inventory turnover and efficiency in
the recent period, warranting a closer look at inventory management practices.
3. Average Collection Period:

Average collection period (Days)
2018 2019 2020 2021 2022
37 42 41 38 41
Time Series Analysis : Kellogg's has demonstrated relatively consistent performance in the
average collection period over the years. There was a slight increase in 2019, followed by a
decrease in 2020 and 2021, indicating efficient accounts receivable management. The figure
remained stable in 2022, suggesting continued effectiveness in collecting receivables.
Overall,
the company appears to maintain a reasonable balance between extending credit to customers
and collecting payments in a timely manner.
4. Average Payment Period:
Average payment period (Days)

2018 2019 2020 2021 2022
145 136 142 138 144
Time Series Analysis: Kellogg's has exhibited a relatively stable average payment period over
the years. There was a decrease in 2019, indicating a slightly quicker payment turnover, followed
by a slight increase in 2020. The figure remained relatively constant in 2021 and 2022,
suggesting consistent payment practices. Overall, the company appears to manage its payment
periods effectively without significant fluctuations, contributing to stable financial operations.
5. Total Assets Turnover:
Total Assets Turnover

2018 2019 2020 2021 2022
4.29 3.96 3.95 4.18 3.66
Time Series Analysis:
Kellogg's has experienced fluctuations in total assets turnover over the years. There was a
decline in 2019, indicating potential underutilization of assets. The metric increased in 2020,
reaching a peak in 2021, suggesting improved efficiency in generating sales relative to
assets. However, in 2022, there was a decrease, indicating a potential decline in asset
productivity.
Monitoring and optimizing asset utilization may be essential for sustained financial performance.
 SOLVENCY RATIO
1. Debt Ratio:
Debt Ratio
2018 2019 2020 2021 2022
1.43 1.39 1.50 1.57 1.52

Kellogg's has experienced a fluctuating debt ratio over the years. There was a slight increase
in 2019, followed by a more significant rise in 2020 and 2021, indicating a higher proportion
of debt relative to equity. In 2022, there was a slight decrease, suggesting a potential effort to
manage and reduce debt. Monitoring this ratio is crucial for assessing the company's financial
leverage and risk, and a downward trend may be indicative of improved financial stability.
2. Times Interest Earned Ratio:
2018 2019 2020 2021 2022
6.75 4.88 5.88 7.37 6.28
Kellogg's Times Interest Earned ratio has shown some variability over the years. There was a
notable decrease in 2019, indicating a potential challenge in meeting interest obligations.
However, the ratio increased in 2020 and 2021, suggesting improved capacity to cover interest
expenses. In 2022, there was a slight decrease, but the overall trend suggests a generally
healthy ability to meet interest payments. Monitoring this ratio is crucial for assessing the
company's financial risk and its ability to service its debt.
 PROFITABILITY RATIO
1. Gross Profit Margin:
Gross Profit Margin
2018 2019 2020 2021 2022
0.36 0.33 0.34 0.32 0.30
Kellogg's gross profit margin has shown a declining trend over the years, indicating a decrease in
the percentage of revenue retained after accounting for the cost of goods sold. This may be
attributed to factors such as rising production costs or pricing pressures. Monitoring and
addressing the factors influencing this decline are essential for maintaining profitability and
competitiveness in the market.
2. Operating Profit Margin:

2018 2019 2020 2021 2022
0.14 0.11 0.13 0.12 0.11

Kellogg's operating profit margin has demonstrated relative stability with a slight fluctuation
over the years. The margins remained within a narrow range, suggesting consistent operational
efficiency. However, the decline in 2022 indicates a potential challenge in sustaining higher
profitability, warranting attention to operational costs and revenue management for future
periods.
3. Net Profit Margin:
Net Profit Margin

2018 2019 2020 2021 2022
0.10 0.07 0.09 0.10 0.06

Kellogg's net profit margin has exhibited some variability over the years, with a noticeable
decrease in 2022. This decline may indicate challenges in managing expenses or changes in
revenue dynamics. It's important for Kellogg's to assess the factors contributing to the
decrease and implement strategies to improve profitability, ensuring sustained financial health
and competitiveness in the market.
4. Earnings Per Share (EPS):

EPS
2018 2019 2020 2021 2022
3.85 2.82 3.65 4.36 2.82
Kellogg's earnings per share (EPS) have shown fluctuations over the years, reaching a peak in
2021 but decreasing in 2022 to a level similar to 2019. The decline in 2022 may raise concerns,
suggesting the need for careful evaluation of the company's financial performance and potential
factors impacting earnings. Monitoring and addressing these fluctuations are crucial for
investor confidence and overall financial sustainability.
5. Return On Assets (ROA):

ROA
2018 2019 2020 2021 2022
0.42 0.28 0.36 0.44 0.23

Kellogg's return on assets (ROA) has shown variability over the years. There was a notable
increase in 2021, indicating improved efficiency in utilizing assets to generate profits. However,
the sharp decline in 2022 suggests a challenge in maintaining the same level of asset
productivity, potentially pointing to factors affecting profitability or asset management.
Analyzing the drivers behind this decline is essential for optimizing the utilization of assets for
sustained financial performance.
6. Return On Equity (ROE):
ROE
2018 2019 2020 2021 2022
0.51 0.35 0.40 0.40 0.24
Time Series Analysis: Kellogg's return on equity (ROE) has displayed fluctuations over the
years. There was a decrease in 2019, followed by a slight increase in 2020 and 2021. However,
in 2022, there was a significant decline, suggesting a challenge in maintaining the same level
of profitability relative to shareholders' equity. Understanding the factors influencing ROE and
implementing strategies to enhance it will be crucial for sustaining and improving shareholder
value.
 MARKET RATIO
1. Price/Earnings Ratio:
P/E
2018 2019 2020 2021 2022
15.51 21.65 16.40 13.19 24.39
Time Series Analysis: Kellogg's price-to-earnings (P/E) ratio has exhibited notable fluctuations
over the years. The P/E ratio increased in 2019, suggesting higher investor expectations or
confidence. It then decreased in 2020 and 2021, indicating a potential undervaluation or lower
market sentiment. However, in 2022, there was a significant increase, possibly indicating
increased optimism or expectations for future earnings growth. The fluctuations in the P/E ratio
may be influenced by a combination of market perceptions, company performance, and broader
economic factors.
2. Market/Book Ratio:
M/B Ratio
2018 2019 2020 2021 2022
0.57 0.58 0.57 0.55 0.65
Time Series Analysis: Kellogg's market-to-book (M/B) ratio has shown relatively stable values
over the years, with a modest increase in 2022. The M/B ratio reflects the market's assessment of
the company's book value relative to its market value. The uptick in 2022 may indicate increased
market confidence in Kellogg's future prospects or a positive reassessment of its book value.
Understanding the factors contributing to this change can provide insights into investor sentiment
and perceptions of the company's intrinsic value.
DuPont Formula
= 0.10x 3.66= 0.37
= 0.07x 4.18= 0.293
= 0.09x3.95= 0.355
= 0.10x 3.96= 0.398
= 0.06x 4.29= 0.257

ROE= ROA x FLM
FLM (2022) = 3.66/3941=0.928
ROE (2022) =0.37x0.928=0.34
FLM (2021) =1.57/3720= 4.22
ROE (2021) = 0.293 x 4.22= 1.24
FLM (2020) =3.95/3112=1.26
ROE (2020) = 0.355 x 1.26= 0.44
FLM (2019) =1.39/2747=5.01
ROE (2019) = 0.398 x 5.01= 1.99
FLM (2018) =1.49/2601=5.72
ROE (2018) = 0.257 x 5.72= 1.47
PepsiCo Beverage Overview
PepsiCo, Inc. is a Global food and beverage giant which has operations in more than 200 nations
and territories. The firm was established in 1965 when Pepsi-Cola and Frito-Lay merged.
Famous brands including Pepsi, Mountain Dew, Lay's, Gatorade, Tropicana, and Quaker are just
a few of the many products offered by PepsiCo. The business has continuously been listed as one
of the biggest and most successful in the world. PepsiCo's shares, which are listed under the
ticker code PEP on major stock exchanges, are exchanged in relation to financial performance.
The stock had seen swings as of my most recent knowledge update in January 2022, which was
impacted by a number of variables such as the state of the world economy, customer tastes, and
industry competition in the food and beverage sector. It enhanced its capital which includes
activities such as debt financing, retained earnings, and the issuance of new shares. These monies
are used for several things, such as capital expenditures, acquisitions, marketing campaigns, and
research and development. The company's endurance in the cutthroat food and beverage business
can be attributed to its persistent efforts to adjust to shifting consumer trends and tastes. Investors
frequently use financial measures including cash flow, profitability, and sales growth to gauge
PepsiCo's success. The management of the organization is essential to carrying out strategic
plans and making adjustments for shifting market conditions.
Ratio Analysis
Liquidity ratio
The current ratio is a necessary for any organization as it gauges the ability of the business to pay
off its impending short-term debt and gives an idea of its ability to pay off loans with one-year
maturities.
YEAR 2022 2021 2020 2019 2018
CURRENT RATIO 0.80 0.83 0.98 0.86 0.99
 Time series perspective: If we compare the time series perspectives of PepsiCo, we can see that
 PepsiCo: The company does not have adequate short-term assets to pay its short-term
commitments when they become due, according to Pepsico for 2018–2022. But if we compare
the 2018– 2022 current ratio for this particular company, we can see that it was in poorer shape
over these years. Given that we are aware that maintaining a 2:1 current asset to current liability
ratio is the preferable or ideal benchmark, The company's low current ratio, which was too low
between 2018 and 2021, basically indicates that it does not have enough cash, receivables, or
inventory. A bad current ratio was the outcome of that.
Quick Ratio
YEAR 2022 2021 2020 2019 2018

QUICK RATIO 0.61 0.66 0.81 0.70 0.85
Time Series Perspective: If we compare the time series perspectives of PepsiCo, We can see that,
Pepsico: From a time series analysis, comparing PepsiCo's 2018 to 2022 quick ratio reveals that, at 0.67
dollars, the corporation had the most liquid component of its current assets in 2018. In 2019, it has
somewhat dropped in comparison to 2018. Then in 2020 and 2021 it declined once again. It indicates that
Pepsico is unable to adequately support its immediate commitments. We are aware that a fast ratio of 1:1
should be maintained between current assets and current liabilities. It needs to be improved as quickly as
possible by the company. Therefore, it needs to put in place the right systems to make better use of or
manage its most liquid current assets.
Asset Management Ratios
Inventory Turnover
Since it measures the average frequency of inventory sales over a certain period of time, an
inventory turnover ratio is an essential tool for any firm.
YEAR 2022 2021 2020 2019 2018
INVENTORY TURNOVER 7.18 7.87 7.00 8.26 8.63
Time Series Perspective: From the time series perspective of PepsiCo, we can see that,
PepsiCo: According to PepsiCo's 2018 report, sales exceeded inventory by 3.30 times. It has
somewhat dropped in 2019 compared to 2018, which was better in 2018. On the other hand, the
fact that the company's sales from 2021 to 2022 are 1.56 and 1.05 times its inventory,
respectively, suggests a low turnover. Because a higher ratio usually denotes strong sales and a
lower ratio normally denotes weak sales. On the other side, a smaller ratio would indicate having
too much inventory on hand, while a higher one may indicate having too little. The business
might not have enough control or obsolete inventory. Still, the company's circumstances are
getting worse. It needs to be improved as quickly as possible by the company.
Average Collection Period:
Since it determines the average number of times an organization collects receivables over the
course of a year, any business must use the average collection period.
YEAR 2022 2021 2020 2019 2018
AVERAGE COLLECTION PERIOD 42.93 39.87 43.59 42.51 40.32
Time series Perspective: From time series perspective of PepsiCo, we can see that,
Pepsico: According to PepsiCo's 2018 report, receivables were collected by the business in 40.32
days. It has increased in 2019 compared to 2018, but it is still not better than 2018. The
corporation does, however, collect receivables in 42.93 days in 2022 compared to 43.95 days in
2020, indicating a larger Average Collection Period (ACP), which is not acceptable. A high ACP
number suggests that a business is experiencing late payments. That can lead to a problem with
cash flow. Thus, it can be said that the company's circumstances are getting worse. It needs to be
improved as quickly as possible by the company. Thus, it needs to put in place the right systems
to make better use of or management of its Average Collection Period (ACP).
Average Payment Period:
YEAR 2022 2021 2020 2019 2018
AVERAGE PAYMENT PERIOD 227.37 225.67 244.80 232.14 244.97
Time Series Perspective: If we look from time series perspective of PepsiCo, we can see that,
PepsiCo: According to PepsiCo's 2018 financial report, the company paid its payables in 227.37
days, indicating that it takes a while to pay its suppliers. It fell in 2019 as compared to 2018,
which is advantageous for the supplier because the business pays its supplier faster. It has
increased to
244.80 days in 2020 from 2019; this indicates a larger number of days of payable outstanding
(DPO). On the other hand, High DPO businesses might choose to defer payments, increase
working capital, make greater free cash flow, or use the extra funds for short-term investments.
While ideal, higher DPO figures might not always be good for the business because they could
be a sign of cash flow problems or an inability to make payments. Nonetheless, the business pays
its payables in 2021 in 225.67 days, which is faster than in 2020. Thus, it can be concluded that
the corporation is in a favorable position.
Debt Management Ratios
Debt Ratio
YEAR 2022 2021 2020 2019 2018
DEBT RATIO 0.81 0.83 0.85 0.81 0.81
Time series perspective:

PepsiCo: Based on the data provided, it can be inferred that throughout the 2018-2020 period,
there was a notable surge in the debt ratio. This indicates that the company is relying more on
debt funding than equity, hence increasing its risk of insolvency. Additionally, the depth ratio
exceeded 50% in both years, giving creditors and investors a bad impression of the business and
making them less inclined to make investments in it. On the other hand, if the company's
profitability was enhanced by its high debt levels, then it is doing a good job of managing its
debt. Additionally, the debt ratio is declining from year to year (2021–2022), which is positive
for the company because it is financing more through equity rather than debt. However, since the
company's debt exceeds the benchmark of 50%, the decline in the debt ratio does not imply that
it is managing its debt effectively.
Time interest Earned
YEAR 2022 2021 2020 2019 2018
TIMES INTEREST EARNED RATIO 15.21 6.57 8.25 8.93 7.69
Time series Perspective: In a time series method to define how many times the business's earnings can
be used to satisfy its debts.
PepsiCo: When looking at the chronology, 2018–2019 indicates a decline in 2019–2021. Its
benchmark for 2019–2021 is less than 1.50 in 2020, indicating that it is less able to cover the
interest expense from the prior year. Due to the company's performance being below the
benchmark, the lender was not interested in giving money to it at this specific period. The
company's improved capacity to cover interest costs from internal revenue in 2022 is a sign that
investors might consider funding the business.
Profitability Ratios
Gross Profit Margin: The gross profit margin is computed to determine the amount of
money the company made after covering its direct operating expenses.
YEAR 2022 2021 2020 2019 2018
GROSS PROFIT MARGIN 0.53 0.54 0.55 0.55 0.55
Time Series Perspective:

PepsiCo: The gross profit margin of PepsiCo does not differ significantly from 2018 and 2022,
as can be observed. Due to the fact that PepsiCo's gross profit margin in 2018 remained constant
at
0.55 in 2019. The gross profit margin was likewise at0.55, which is not a significant increase,
later in 2020. However, the gross profit margin increased little in 2021 to 0.54 before declining
to 0.53 in 2022. As a result, it is evident that PepsiCo did better in 2020 and had its lowest gross
profit margin in 2021 between 2018 and 2022. However, since the variations aren't that great, it's
simple to conclude that PepsiCo's gross profit margin remained relatively stable between 2018
and 2022.
To determine how well a target firm performs in relation to its peers—and, in particular, how
well it manages expenses to maximize profitability—the operating profit margin is determined.
YEAR 2022 2021 2020 2019 2018
OPERATING PROFIT MARGIN 0.14 0.14 0.15 0.16 0.16
Time series Perspective:

PepsiCo: Throughout the years 2018 through 2022, PepsiCo's operating profit margin declined.
The operational profit margin is 0.16 in 2018 and 2019, and it drops to 0.15 in 2020, as can be
shown. It is not good for the corporation because the operating profit margin dropped to 0.14 in
2021 and stayed at that level in 2022. Based on the available statistics, it can be concluded that
PepsiCo is experiencing a declining annual operating profit. PepsiCo's operating profit margin
was higher in the beginning, which contributed to its favorable position. However, since then, the
company's profit margin has been declining annually.
Net Profit Margin
Investors can determine whether a company's management is making enough money from sales
and whether operational and overhead expenditures are under control by looking at the net profit
margin.
YEAR 2022 2021 2020 2019 2018
NET PROFIT MARGIN 0.10 0.10 0.10 0.11 0.19

PepsiCo: If we contrast PepsiCo's net profit margin There appear to have been variations in the
net profit margin from 2018 and 2021. even if it fell in 2019 compared to 2018. The net profit
margin was 0.19 in 2018 and dropped to 0.11 in 2019. Additionally, it dropped in 2021 to 0.11
and was reexamined in 2021 and 2022. As a result of its initial decline, we might conclude that
its net profit margin is unstable.
Earnings Per share
Earnings per share (EPS), which tracks a company's revenue per share of equity, is a widely
used metric to assess a company's worth.
YEAR 2022 2021 2020 2019 2018
EARNINGS PER SHARE 3.87 3.31 3.10 3.18 5.4

PepsiCo: The earnings per share (EPS) ratio of PepsiCo has declined over time, as can be seen
from the data from 2018 to 2019. This is concerning for the company because a lower EPS
indicates a lower value, as investors will be less willing to pay for a company's stock if they
think it is not making as much money as its shares are worth. However, the earnings per share
(EPS) ratio has slightly grown in 2020, which is positive for the business since it shows that
PepsiCo is more valuable. Investors will pay more for a company's shares if they believe it is
making more money than its share price. But in 2022, it has significantly increased in
comparison to 2020.
Return on Asset
YEAR 2022 2021 2020 2019 2018
ROA 0.10 0.08 0.08 0.09 0.16

PepsiCo: Based on the statistics presented above, we can conclude that this company's return on
assets (ROA) has stabilized over time. The ROA is in a stable position, as we observed in 2019–
2021, remaining at 0.08. The company's return on assets (ROA) increased to 0.10 in 2021,
indicating that it is making good use of its assets to generate income. The increasing return on
assets (ROA) over time indicates that the business is doing a good job of growing its profits for
every dollar it invests. The inclination of investors to invest in the company is encouraging.
Return On Equity
YEAR 2022 2021 2020 2019 2018
ROE 0.52 0.47 0.53 0.49 0.86

PepsiCo: 2018 saw PepsiCo's ROE ratio of 0.86; 2019 saw it drop to 0.49; 2020 saw it rise to
0.53; and 2021 saw it settle at 0.47. Thus, as we can see, GPH's earnings are currently stable and
PepsiCo's earnings ratio is almost stable.
Price To Earnings Ratio
YEAR 2022 2021 2020 2019 2018
PRICE/EARNINGS RATIO 43.05 50.36 53.88 52.45 30.66

PepsiCo: In terms of P/E ratio, PepsiCo was 30.66 in 2018; the following year, 2019, saw an
increase to 52.45. However, it improved to 53.88 in the following year, which is positive. And it
dropped to 51.36 the next year, which is detrimental to a business. Since a higher P/E ratio is
generally considered preferable, RSRM should raise their ratio.
Market to Book Ratio
YEAR 2022 2021 2020 2019 2018
MARKET/BOOK RATIO 1.67 1.67 1.67 1.67 1.67
Time series Perpsective: If we compare the book ratio of Pepsico from year 2018-2022, We can
see that the time series of book ratio is quite stable and remains the same which is 1.67 for all
years for all years.
Du Pont Analysis
Dupont system of analysis is used to dissect the firm’s financial statement and to assess its financial
condition.
For Pepsico,
DuPont Formula

= 0.1 x 0.94 = 0.1
= 0.1 x 0.86 = 0.08
= 0.1 x 0.76 = 0.08
= 0.1 x 0.86 = 0.09
= 0.1 x 0.83 = 0.16
We can see from the above calculations that Pepsico managed their assets more efficiently in 2022
and less efficiently in 2020 by comparing the Total Asset Turnover part of the ROA calculations.
Their Net Profit Margin is the same for each year.
In this formula, we use Financial Leverage Multiplier (FLM) which gives an idea about how risky it is to
invest in a firm. FLM is also referred to as the equity multiplier.

ROE= ROA x FLM
FLM (2022) = 92187/17273 =5.36

ROE (2022) = 0.1 x 5.36 = 0.52
FLM (2021) =92377/16151 =5.72

ROE (2021) = 0.08 x 5.72 = 0.47
FLM (2020) =92918/13552 =6.86

ROE (2020) = 0.08 x 6.86 = 0.53
FLM (2019) =78547/14868 =5.28

ROE (2019) = 0.09 x 5.28 = 0.49
FLM (2018) =77648/14602 =5.32

ROE (2018) = 0.16 x 5.32 = 0.86
We can evaluate from the above calculations that Pepsico has the highest FLM in 2020, which interprets
as Pepsico stocks are profitable but risky. Lowest risk was in 2019 with FLM 5.28.
Cross Sectional Analysis
 CURRENT RATIO:
CURRENT RATIO
2022 2021 2020 2019 2018
Arla Foods 1.55 1.28 1.22 1.24 1.21
PepsiCo 0.8 0.83 0.98 0.86 0.99
Coca Cola 1.15 1.13 1.32 0.76 0.87
Kellog's 0.66 0.64 0.66 0.72 0.7
Nestle 0.88 0.98 0.86 0.86 0.95
Industry Average 1.01 0.97 1.008 0.89 0.94
 ARLA FOODS: Comparing Arla Food’s current ratio with other companies in the industry, we can see
that Arla foods has performed well over the last 5 years. This indicates as Arla foods having more
liquidity than the industry average.
 PEPSICO: Comparing PepsiCo’s current ratio with other companies in the industry, PepsiCo had
more or less the same ratio over the last 5 years. This indicates as PepsiCo’s liquidity not being that
different from Industry’s other companies.
 NESTLE: Nestle's overall Current Ratio is lower than the industry average, however it is consistent
throughout the years. Nestle can gain valuable insights by benchmarking its current ratio against high-
performing peers like Arla Foods and understanding the strategies contributing to their liquidity
strength.
 KELLOGS: Kellog's current ratio is lower than that of Arla Foods and Nestle but higher than PepsiCo
and Coca Cola. It is relatively close to the industry average. Kellog's tends to have a lower current ratio
compared to some of its competitors and the industry average across the years provided. This suggests
that, in general, Kellog's may have a comparatively lower ability to cover its short-term liabilities with
its short-term assets.
 COCA COLA: In both 2022-2021, Coca Cola's current ratio is higher than that of PepsiCo, Kellog's, and
Nestle but lower than Arla Foods and the industry average, but lower than Arla Foods and Nestle. In
summary, the current ratio of Coca Cola varies across the years but generally falls within the range of
the other listed companies and the industry average. It's essential to consider industry benchmarks and
the company's historical performance for a comprehensive analysis.
 QUICK RATIO:
QUICK RATIO
2022 2021 2020 2019 2018
Arla Foods 0.89 0.77 0.77 0.77 0.77
PepsiCo 0.61 0.66 0.81 0.7 0.85
Coca Cola 0.93 0.958 1.09 0.63 0.759
Kellog's 0.38 0.38 0.42 0.46 0.4
Nestle 0.5 0.68 0.6 0.63 0.74
 ARLA FOODS: Arla Foods’ Quick Ratio has been significantly higher in 2022 comparing with
Industry average and in other years, it was roughly the same.
 PEPSICO: PepsiCo’s Quick Ratio has been almost consistent with the industry average indicating that
their position in the industry was consistent throughout the last 5 years.
 NESTLE: Nestle's Quick Ratio has remained consistent through the five years and appears to be the
closest to the Industry Average following PepsiCo. However since the Quick Ratio is less than 1, If the
quick ratio is less than 1, it suggests potential difficulty in meeting short-term obligations without
relying on the sale of inventory.
 KELLOGS: Kellog's quick ratio is lower than that of Arla Foods, PepsiCo, Coca Cola, and Nestle. It is
also below the industry average, indicating a comparatively weaker ability to cover short-term
obligations with its most liquid assets. In summary, Kellog's tends to have a consistently lower quick
ratio compared to its competitors and the industry average across the years provided. This suggests that
Kellog's may have a relatively weaker ability to cover short-term obligations with its most liquid assets
compared to its peers.
 COCA COLA: Coca Cola's quick ratio is higher than that of Arla Foods, PepsiCo, Kellog's, and Nestle.
It also surpasses the industry average, indicating a relatively strong ability to cover short-term
obligations quickly. This suggests that Coca Cola has a relatively strong ability to cover short-term
obligations with its most liquid assets.
 INVENTORY TURNOVER
INVENTORY TURNOVER
2022 2021 2020 2019 2018
Arla Foods 6.29 7.07 7.69 7.62 7.6
PepsiCo 7.18 7.87 7 8.26 8.63
Coca Cola 4.25 4.5 4.11 4.33 4.25
Kellog's 6.08 6.93 7.05 7.46 6.55
Nestle 3.45 3.79 4.25 4.99 5.05
 ARLA FOODS: Arla Foods’ Inventory Turnover has been significantly higher than the industry
average. This interprets as Arla Foods efficiently selling their inventories.
 PEPSICO: PepsiCo’s Inventory Turnover has also been significantly higher than the industry average
which means that PepsiCo has been successful in selling their inventories more efficiently compared
to the other companies in the industry.
 NESTLE: Nestle has a much lower Inventory Turnover Ratio than its peers, specially in the recent
years. A low inventory turnover ratio indicates that a company is not efficiently managing its inventory
or that its sales are not keeping pace with the level of inventory on hand.
 KELLOGS: Kellogg's inventory turnover is lower than PepsiCo but higher than both Coca Cola and
Nestle. It is close to the industry average, indicating a moderate efficiency in managing inventory
turnover compared to the overall industry.
In summary, Kellogg's inventory turnover is within the range of the industry average and is
relatively higher than Coca Cola and Nestle but lower than PepsiCo. This suggests that Kellogg's is
moderately efficient in managing its inventory turnover compared to these specific peers and the
industry as a whole.
 COCA COLA: Coca Cola's inventory turnover is generally lower than the industry average and some
of the selected companies, indicating that it takes Coca Cola longer to sell and replace its inventory
compared to its peers. This could be influenced by various factors, such as the nature of the beverage
industry and the company's specific business strategies.
 TOTAL ASSET TURNOVER
TOTAL ASSET TURNOVER

2022 2021 2020 2019 2018
Arla Foods 1.58 1.43 1.45 1.48 1.57
PepsiCo 0.94 0.86 0.76 0.86 0.83
Coca Cola 0.464 0.409 0.378 0.43 0.41
Kellog's 3.66 4.18 3.95 3.96 4.29
Nestle 0.7 0.63 0.68 0.73 0.67
 ARLA FOODS: Arla Food’s Asset turnover ratio has been really close to the industry average. So,
its safe to say that Arla foods has been using their assets as efficiently as it can to generate sales.
 PEPSICO: PepsiCo’s Asset Turnover ratio has been significantly lower than the industry average.
But higher than Coca Cola. Which interprets as PepsiCo not using their assets to generate sales.
 NESTLE: Over the years, Nestle always had a much lower Asset Turnover Ratio compared to
their industry peers. A low asset turnover ratio is generally considered less favorable and can
indicate potential inefficiencies in a company's operations.
 KELLOGS: Kellogg's Total Asset Turnover is notably higher than both its peers and the industry
average, suggesting that Kellogg's is efficient in generating revenue from its assets. This metric
indicates effective asset management and operational efficiency for Kellogg's compared to other
companies in the same industry.
 COCA COLA: Coca Cola has a significantly lower Total Asset Turnover compared to the industry
average and other selected companies. In summary, Coca Cola's Total Asset Turnover is relatively
low compared to both its peers and the industry average. This suggests that Coca Cola may not be as
efficient in generating revenue from its assets compared to other companies in the same industry. The
specific reasons for this lower ratio would require a more in-depth analysis of the company's financial
and operational dynamics.
 DEBT RATIO
DEBT RATIO
2022 2021 2020 2019 2018
Arla Foods 0.64 0.63 0.64 0.65 0.56
PepsiCo 0.81 0.83 0.85 0.81 0.81
Coca Cola 3.4 2.7 3.26 9.48 8.02
Kellog's 1.52 1.57 1.5 1.52 1.43
Nestle 0.68 0.61 0.62 0.59 0.57
 ARLA FOODS: Arla Food’s has a lower debt ratio compared to the industry average and all the
selected companies. This indicates as Arla foods not relying heavily on debts to finance its assets.
 PEPSICO: PepsiCo also has a relatively lower Debt ratio. But its debt ratio is still higher than Nestle and
Arla foods.
 NESTLE:A low debt ratio compared to the industry average and peers of Nestle can suggest several
positive aspects of the company's financial health and risk management. It is lower than the industry
average and is on par with Arla Foods.
 KELLOGS: Kellog's generally has a lower debt ratio compared to Coca Cola across the years provided,
indicating a lower level of financial leverage. However, Kellog's debt ratio is still higher than some of
its peers, such as Arla Foods, PepsiCo, and Nestle, as well as the industry average.
 COCA COLA: Coca Cola's Debt Ratio is relatively high compared to both its peers and the industry
average. This suggests that Coca Cola relies more heavily on debt to finance its assets, potentially
exposing the company to higher financial risk associated with debt obligations. It's important to note that
a high debt ratio may not necessarily be a negative indicator, as it depends on the company's overall
financial health and its ability to manage debt effectively.
 NET PROFIT MARGIN
NET PROFIT MARGIN

2022 2021 2020 2019 2018
Arla Foods 0.03 0.03 0.03 0.03 0.03
PepsiCo 0.1 0.1 0.1 0.11 0.19
Coca Cola 18.4 29.9 26 26.3 25.9
Kellog's 0.06 0.1 0.09 0.07 0.1
Nestle 0.02 0.11 0.06 0.06 0.04
 ARLA FOODS: Arla Foods has Net Profit margin of 0.03 for all the 5 years. This although shows
consistency, it is really low compared to the industry average and it is the lowest among the selected
companies. This indicates that for every single dollar of sales, Arla Foods only earned 0.03 dollars of
net profit where as on average, the companies in the industry earned around 3.5 to 5.5 dollars.
 PEPSICO: PepsiCo’s Net Profit Margin been almost the same at 0.1 except for in 2018 with 0.19
which is still relatively low compares to the industry average.
 NESTLE: Among the companies in this list Nestle has one of the lowest Net Profit Margin Ratio
followed by Kellog's and Arla Foods. A lower net profit margin may indicate that Nestle is less
efficient in controlling its costs and expenses relative to its revenue. This could be attributed to factors
such as
inefficient production processes, higher operating expenses, or increased costs of goods sold.
 KELLOGS: Kellogg's Net Profit Margin is relatively low compared to Coca Cola but is in line with
the industry average.
Kellogg's Net Profit Margin is moderate compared to its peers and the industry average. While it is
lower than some companies like Coca Cola, it is in line with the average for the industry.
Profitability ratios are influenced by various factors, including a company's cost structure, pricing
strategy, and
industry dynamics.
 COCA COLA: In 2018, Coca Cola's net profit margin is higher than that of Arla Foods, Kellog's, Nestle,
and the industry average. PepsiCo, however, has a significantly higher net profit margin in this year.
Coca Cola consistently has a much higher net profit margin compared to its competitors and the
industry average across the years provided. This indicates strong profitability and efficient management
of costs relative to revenue.
 ROA
ROA
2022 2021 2020 2019 2018
Arla Foods 0.05 0.04 0.05 0.05 0.05
PepsiCo 0.1 0.08 0.08 0.09 0.16
Coca Cola 0.085 0.074 0.0715 0.09 0.07
Kellog's 0.23 0.44 0.36 0.28 0.42
Nestle 0.02 0.07 0.04 0.04 0.03
 ARLA FOODS: Arla foods ROA is almost half of the industry average ROA. This is moderate
compares to Nestle’s ROA.
 PEPSICO: PepsiCo’s ROA is still somewhat close to the industry average. Which is a relatively good
sign for PepsiCo.
 NESTLE: Nestle has a much lower ROA compared to the industry average over the period of 5 years.
A low ROA ratio compared to the industry average and peers of Nestle may suggest several potential
implications regarding the company's efficiency in generating profits from its assets.
 KELLOGS: Kellogg's stands out with the highest ROA, suggesting effective use of assets to generate
profit. Coca Cola's ROA is competitive within the group, and PepsiCo also performs well in terms of
asset efficiency. The specific industry context, business strategies, and market conditions contribute
to variations in ROA among these companies.
 COCA COLA: Coca Cola's ROA is moderate compared to Kellogg's but is higher than Arla Foods,
PepsiCo, and Nestle. Coca Cola's ROA is competitive within the group of selected companies, and it
falls within the range of the industry average. Kellogg's stands out with the highest ROA, suggesting
strong efficiency in generating profits from its assets. The specific industry dynamics, business
models, and market conditions can contribute to variations in ROA among these companies.
 ROE
ROE
2022 2021 2020 2019 2018
Arla Foods 0.13 0.12 0.13 0.13 0.12
PepsiCo 0.52 0.47 0.53 0.49 0.86
Coca Cola 0.173 0.175 0.136 0.15 0.14
Kellog's 0.24 0.4 0.4 0.35 0.51
Nestle 0.05 0.17 0.1 0.1 0.06
 ARLA FOODS: Arla Food’s ROE is relatively close to the industry average which puts them in a
good position in terms of Return on Equity.
 PEPSICO: PepsiCo has the highest ROE among the selected companies which gives them an
advantage on earnings on equity.
 NESTLE: Nestle always had a relatively low ROE however showed a sudden increase in 2021. A
low ROE Ratio for Nestle compared to the industry average and peers may indicate that Nestle is not
generating as much profit per unit of shareholder equity as its industry counterparts. Nestle may have
experienced higher net income in 2021, potentially due to increased sales, cost-cutting measures, or
improved operational efficiency.
 KELLOGS: Kellogg's ROE is relatively high compared to both its peers and the industry
average, indicating efficient use of shareholders' equity to generate profit. The specific dynamics
of each company's business and market conditions contribute to variations in ROE.
 COCA COLA: Coca Cola's ROE is competitive, exceeding the industry average and surpassing the ROE
of Arla Foods, Kellogg's, and Nestle. And it exceeds the industry average. The differences in ROE
among these companies can be influenced by various factors, including business strategies, financial
structures, and market conditions.
 P/E RATIO
P/E RATIO
2022 2021 2020 2019 2018
Arla Foods 12.5 14.45 14.2 15.48 16.61
PepsiCo 43.05 50.36 53.88 52.45 30.66
Coca Cola 31.4 6.22 5.4 4.9 5.63
Kellog's 24.39 13.19 16.4 21.65 15.51
Nestle 29.24 16.5 23.26 23.26 29.76
 ARLA FOODS: Arla Foods’ P/E ratio is significantly lower than the industry average which indicates
as poor market expectations.
 PEPSICO: PepsiCo’s P/E ratio is the highest among the selected companies which promises positive
market expectations for its future earnings growth.
 NESTLE: Nestle's P/E ratio is second to PepsiCo and has always maintained a close distance with the
industry average. A higher P/E ratio might indicate that investors expect higher future earnings
growth. It suggests that investors are willing to pay a premium for the company's growth prospects.
 KELLOGS: Kellogg's P/E ratio is lower than that of PepsiCo and Coca Cola but higher than Arla
Foods, Nestle, and the industry average. The differences in P/E ratios reflect the market's expectations
and perceptions of each company's growth prospects.
 COCA COLA: Coca Cola's P/E ratio is relatively high compared to some of its peers and the industry
average, indicating positive market expectations for its future earnings growth. The differences in
P/E ratios among these companies reflect investors' perceptions of their growth prospects and risk
levels.
Conclusion
In conclusion, our group project delving into the Financial Ratio Analysis of prominent food
industry giants—Arla Foods, Nestle, Coca-Cola, PepsiCo, and Kellogg's—has provided a
comprehensive understanding of their financial health and performance over the past five years.
By closely studying major financial ratios, we’ve managed to get an idea about the weaknesses
and strengths of the companies in their environments.
This project has pointed out the need to adopt a comprehensive view of financial reporting that
highlights the relationship among different indicators and their impact on business leaders. We
understand that factors such as industry standards, prevailing economic parameters, and strategic
efforts need to be considered in analyzing financial ratios. In this regard, it is imperative to
undertake an industry-specific approach to the ratio analysis, given that no two financial markets
are alike.
Moving forward, we acknowledge the ongoing evolution of financial markets and the need for
continuous learning and adaptation. Our group project has laid a solid foundation for our future
financial analysis and decision-making endeavors. The skills developed, and insights gained will
serve us well in navigating the complexities of the business world.
APPENDIX
ARLA FOODS
INCOME STATEMENT
2022 2021 2020 2019 2018
$13,793,000,000. $11,202,000,000. $10,644,000,000. $10,527,000,000. $10,425,000,000.
SALES REVENUE 00 00 00 00 00
COST OF $11,145,000,000. $8,822,000,000.0 $8,301,000,000.0 $8,325,000,000.0 $8,163,000,000.0
GOODS SOLD 00 0 0 0 0
$2,648,000,000.0 $2,380,000,000.0 $2,343,000,000.0 $2,202,000,000.0 $2,262,000,000.0
GROSS PROFIT 0 0 0 0 0
SALES AND - - - - -
DISTRIBUTION $1,771,000,000.0 $1,573,000,000.0 $1,483,000,000.0 $1,416,000,000.0 $1,540,000,000.0
COST S 0 0 0 0 0
ADMINISTRATI
ON COSTS -$439,000,000.00 -$427,000,000.00 -$439,000,000.00 -$389,000,000.00 -$422,000,000.00
OTHER
OPERATING
INCOME $162,000,000.00 $110,000,000.00 $61,000,000.00 $39,000,000.00 $118,000,000.00
OTHER
OPERATING
COSTS -$131,000,000.00 -$75,000,000.00 -$52,000,000.00 -$64,000,000.00 -$43,000,000.00
SHARE OF
RESULTS AFTER
TAX IN
ASSOCIATES
AND JOIN
VENTURES $60,000,000.00 $53,000,000.00 $28,000,000.00 $34,000,000.00 $29,000,000.00
EARNINGS
BEFORE
INTEREST AND
TAX(EBIT) $529,000,000.00 $468,000,000.00 $458,000,000.00 $406,000,000.00 $404,000,000.00
INTEREST
EXPENSE $80,000,000.00 $61,000,000.00 $72,000,000.00 $59,000,000.00 $62,000,000.00
EARNINGS
BEFORE TAX $449,000,000.00 $407,000,000.00 $386,000,000.00 $347,000,000.00 $342,000,000.00
TAX $49,000,000.00 $61,000,000.00 $34,000,000.00 $24,000,000.00 $41,000,000.00

EARNINGS
AFTER TAX
(NET
OPERATING
INCOME) $400,000,000.00 $346,000,000.00 $352,000,000.00 $323,000,000.00 $301,000,000.00
BALANCE SHEET
2022 2021 2020 2019 2018
ASSETS
$
$106,000,000. $97,000,000.0 $126,000,000. $187,000,000. 119,000,000.0
CASH 00 0 00 00 0
$
$432,000,000. $434,000,000. $420,000,000. $435,000,000. 465,000,000.0
MARKETABLE SECURITIES 00 00 00 00 0
$1,586,000,00 $1,292,000,00 $1,235,000,00 $1,129,000,00 $1,243,000,00
ACCOUNTS RECEIVABLE 0.00 0.00 0.00 0.00 0.00
$1,772,000,00 $1,248,000,00 $1,080,000,00 $1,092,000,00 $1,074,000,00
INVENTORIES 0.00 0.00 0.00 0.00 0.00
$239,000,000. $74,000,000.0 $57,000,000.0 $20,000,000.0 $37,000,000.0
DERIVATIVES 00 0 0 0 0
$4,135,000,00 $3,145,000,00 $2,918,000,00 $2,863,000,00 $2,938,000,00
TOTAL CURRENT ASSETS 0.00 0.00 0.00 0.00 0.00
$954,000,000. $946,000,000. $931,000,000. $982,000,000. $887,000,000.

INTANGIBLE ASSETS 00 00 00 00 00
PROPERTY, PLANT AND $3,031,000,00 $3,072,000,00 $2,915,000,00 $2,710,000,00 $2,308,000,00
EQUIPMENT 0.00 0.00 0.00 0.00 0.00
$565,000,000. $530,000,000. $470,000,000. $468,000,000. $439,000,000.
INVESTMENTS 00 00 00 00 00
$22,000,000.0 $21,000,000.0 $29,000,000.0 $43,000,000.0 $30,000,000.0
DEFERRED TAX 0 0 0 0 0
$16,000,000.0 $69,000,000.0 $40,000,000.0 $16,000,000.0
PENSION ASSETS 0 0 0 0 $4,000,000.00
$23,000,000.0 $30,000,000.0 $28,000,000.0 $24,000,000.0 $29,000,000.0
OTHER NON CURRENT ASSETS 0 0 0 0 0
$4,611,000,00 $4,668,000,00 $4,413,000,00 $4,243,000,00 $3,697,000,00
TOTAL FIXED ASSETS 0.00 0.00 0.00 0.00 0.00
$8,746,000,00 $7,813,000,00 $7,331,000,00 $7,106,000,00 $6,635,000,00
TOTAL ASSETS 0.00 0.00 0.00 0.00 0.00
LIABILITIES AND STOCKHOLDER'S

EQUITY
$709,000,000. $628,000,000. $695,000,000. $776,000,000. $860,000,000.

LOANS 00 00 00 00 00
$1,597,000,00 $1,445,000,00 $1,212,000,00 $1,158,000,00 $1,169,000,00
ACCOUNTS PAYABLE 0.00 0.00 0.00 0.00 0.00
$20,000,000.0 $18,000,000.0 $25,000,000.0 $11,000,000.0
PROVISIONS 0 0 0 $9,000,000.00 0
$36,000,000.0 $86,000,000.0 $66,000,000.0 $86,000,000.0 $85,000,000.0
DERIATIVES 0 0 0 0 0
$11,000,000.0
CURRENT TAX $0.00 $0.00 0 $5,000,000.00 $5,000,000.00
$301,000,000. $280,000,000. $387,000,000. $274,000,000. $292,000,000.
OTHER CURRENT LIABILITIES 00 00 00 00 00
$2,663,000,00 $2,457,000,00 $2,396,000,00 $2,308,000,00 $2,422,000,00
TOTAL CURRENT LIABILITIES 0.00 0.00 0.00 0.00 0.00
TOTAL NON-CURRENT $2,915,000,00 $2,446,000,00 $2,296,000,00 $2,304,000,00 $1,694,000,00
LIABILITIES 0.00 0.00 0.00 0.00 0.00
$5,578,000,00 $4,903,000,00 $4,692,000,00 $4,612,000,00 $4,116,000,00
TOTAL LIABILITIES 0.00 0.00 0.00 0.00 0.00
$2,150,000,00 $2,062,000,00 $1,968,000,00 $1,894,000,00 $1,814,000,00

COMMON CAPITAL 0.00 0.00 0.00 0.00 0.00
$540,000,000. $542,000,000. $513,000,000. $498,000,000. $456,000,000.
INDIVIDUAL CAPITAL 00 00 00 00 00
- - -
$203,000,000. $46,000,000.0 $118,000,000. $72,000,000.0 $89,000,000.0
OTHER EQUITY ACCOUNTS 00 0 00 0 0
PROPOSED SUPPLEMENTARY $208,000,000. $207,000,000. $223,000,000. $127,000,000. $290,000,000.
PAYMENT TO OWNERS 00 00 00 00 00
$67,000,000.0 $53,000,000.0 $53,000,000.0 $47,000,000.0 $48,000,000.0
MINORITY INTERESTS 0 0 0 0 0
$3,168,000,00 $2,910,000,00 $2,639,000,00 $2,494,000,00 $2,519,000,00
TOTAL EQUITY 0.00 0.00 0.00 0.00 0.00
$8,746,000,00 $7,813,000,00 $7,331,000,00 $7,106,000,00 $6,635,000,00

TOTAL EQUITY AND LIABILITIES 0.00 0.00 0.00 0.00 0.00
PEPSICO
INCOME STATEMENT
Column1 2022 2021 2020 2019 2018
Sales/Revenue 86,403 79,468 70,372 67,162 64,660
COGS excluding D&A 37,518 34,222 29,212 27,580 26,986
Depreciation & Amortization Expense 2,763 2,710 2,548 2,432 2,399
Depreciation 2,685 2,619 2,458 2,351 2,330
Amortization of Intangibles 78 91 90 81 69
Gross Income 46,122 42,536 38,612 37,150 35,275
SG&A Expense 34,256 31,089 28,197 26,502 24,875
Research & Development 771 752 719 711 680
Other SG&A 33,485 30,337 27,478 25,791 24,195
EBIT 11,866 11,447 10,415 10,648 10,400
Unusual Expense 3,577 303 336 291 495
Non-Operating Income/Expense 3,196 420 253 (53) 331
Non-Operating Interest Income - - - 200 306
Gross Interest Expense 780 1,743 1,263 1,192 1,353
Total Taxes 3,454 6,027 5,218 5,159 3,732
Consolidated Net Income 8,978 7,679 7,175 7,353 12,559
Minority Interest Expense 68 61 55 39 44
Net Income 8,910 7,618 7,120 7,314 12,515
Preferred Dividends - - - - 2
Net Income Available to Common 8,910 7,618 7,120 7,314 12,513
BALANCE SHEET
2022 2021 2020 2019 2018

ASSETS
Current Assets
Cash and cash equivalents 4,954 5,596 8,185 5,509 8,721
Short-term investments 394 392 1,366 229 272
Accounts and notes receivable, net 10,163 8,680 8,404 7,822 7,142
Inventories 5,222 4,347 4,172 3,338 3,128
Prepaid expenses and other current assets 806 980 874 747 633
Total Current Assets 21,539 21,783 23,001 17,645 21,893
Property, Plant and Equipment, net 24,291 22,407 21,369 19,305 17,589
Amortizable Intangible Assets, net 1,277 1,538 1,703 1,433 1,644
Goodwill 18,202 18,757 15,501 14,808
Other indefinite-lived intangible assets 14,309 17,127 17,612 14,610 14,181
Investments in Noncontrolled Affiliates 3,073 2,350 2,792 2,683 2,409
Deferred Income Taxes 4,204 4,310 4,372 4,359 4,364
Other Assets 5,292 4,481 3,312 3,011 760
Total Assets 92,187 92,377 92,918 78,547 77,648
LIABILITIES AND EQUITY

Current Liabilities
Short-term debt obligations 3,414 4,308 3,780 2,920 4,026
Accounts payable and other current liabilities 23,371 21,159 19,592 17,541 18,112
Total Current Liabilities 26,785 26,220 23,372 20,461 22,138
Long-Term Debt Obligations 35,657 36,026 40,370 29,148 28,295
Deferred Income Taxes 4,133 4,826 4,284 4,091 3,499
Other Liabilities 8,339 9,154 11,340 9,979 9,114
Total Liabilities 74,914 76,226 79,366 63,679 63,046
PepsiCo Common Shareholders’ Equity
Common stock, par value 12 /3 ¢ per share (authorized 3,600
shares; issued, net of repurchased common stock at par value:
1,409 and 1,420 shares, respectively) 23 23 23 23 23
Capital in excess of par value 4,134 4,001 3,910 3,886 3,953
Retained earnings 67,800 65,165 63,443 61,946 59,947
Accumulated other comprehensive loss -15,302 -14,898 -15,476 -14,300 -15,119
Repurchased common stock, in excess of par value (458 and 446
shares, respectively) -39,506 -38,248 -38,446 -36,769 -34,286
Total PepsiCo Common Shareholders’ Equity 17,149 16,043 13,454 14,786 14,518
Noncontrolling interests 124 108 98 82 84
Total Equity 17,273 16,151 13,552 14,868 14,602
Total Liabilities and Equity 92,187 92,377 92,918 78,547 77,648
KELLOG’S COMPANY
INCOME STATEMENT
2022 2021 2020 2019 2018
SALES REVENUE $15,315.00 $14,181.00 $13,770.00 $13,578.00 $13,547.00
COST OF GOODS SOLD $10,746.00 $9,689.00 $9,054.00 $9,150.00 $8,718.00
GROSS PROFIT $4,569.00 $4,492.00 $4,716.00 $4,428.00 $4,829.00
SALES AND ADMINISTRATION

COSTS $2,931.00 $2,812.00 $2,934.00 $2,895.00 $2,945.00
EARNINGS BEFORE INTEREST AND
TAX(EBIT) $1,638.00 $1,680.00 $1,782.00 $1,533.00 $1,884.00
INTEREST EXPENSE -$261.00 -$228.00 -$303.00 -$314.00 -$279.00

OTHER INCOME (EXPENSE) -$180.00 $514.00 $122.00 $86.00 -$276.00
EARNINGS BEFORE TAX $1,197.00 $1,966.00 $1,601.00 $1,305.00 $1,329.00
TAX -$244.00 -$474.00 -$323.00 -$321.00 -$181.00

EARNINGS(LOSS) FROM
UNCONSOLIDATED ENTITIES $7.00 -$4.00 -$27.00 -$24.00 $188.00
EARNINGS AFTER TAX(NET
OPERATING INCOME) $960.00 $1,488.00 $1,251.00 $960.00 $1,336.00
BALANCE SHEET
2022 2021 2020 2019 2018

ASSETS
Cash & Short-Term Investments 299 286 435 397 321

Cash Only 299 286 435 397 321
Total Accounts Receivable 1,736 1,489 1,537 1,576 1,375
Accounts Receivables, Net 1,436 1,225 1,253 1,305 1,153
Accounts Receivables,
Gross 1,449 1,240 1,272 1,315 1,163
Bad Debt/Doubtful
-13 -15 -19 -10 -10
Accounts
Other Receivables 300 264 284 271 222
Inventories 1,768 1,398 1,284 1,226 1,330
Finished Goods 1,342 1,015 946 923 991
Raw Materials 426 383 338 303 339
Other Current Assets 383 221 226 232 131
Miscellaneous Current Assets 383 221 226 232 131
Total Current Assets 4,186 3,394 3,482 3,431 3,157
Net Property, Plant & Equipment 4,406 4,467 4,371 4,153 3,731
Property, Plant & Equipment -
10,498 10,495 10,177 9,592 9,173
Gross
Buildings 2,274 2,238 2,135 2,021 2,061
Land & Improvements 108 123 120 116 120
Machinery & Equipment 6,339 6,277 6,080 5,852 5,971
Construction in Progress 660 623 641 566 583
Computer Software and
500 594 543 496 438
Equipment
Accumulated Depreciation 6,092 6,028 5,806 5,439 5,442
Total Investments and Advances 521 452 480 448 430
LT Investment - Affiliate
432 424 391 404 413
Companies
Other Long-Term Investments 89 28 89 44 17
Intangible Assets 7,982 8,180 8,290 8,437 9,411
Net Goodwill 5,686 5,771 5,799 5,861 6,050
Net Other Intangibles 2,296 2,409 2,491 2,576 3,361
Other Assets 1,211 1,470 1,119 864 805
Deferred Charges 757 1,025 324 241 228
Tangible Other Assets 454 445 795 623 577
Total Assets 18,496 18,178 17,996 17,564 17,780
LIABILITIES AND
SHAREHOLDERS EQUITY
ST Debt & Current Portion LT

1,368 965 846 841 686
Debt
Short Term Debt 588 253 219 221 176
Current Portion of Long-Term
780 712 627 620 510
Debt
Accounts Payable 2,973 2,573 2,471 2,387 2,427
Income Tax Payable 49 49 58 42 48

Other Current Liabilities 1,959 1,728 1,863 1,508 1,368
Accrued Payroll 370 300 378 290 309
Miscellaneous Current
1,589 1,428 1,485 1,218 1,059
Liabilities
Long-Term Debt 5,803 6,764 7,266 7,628 8,207

Long-Term Debt excl.
5,317 6,262 6,746 7,195 8,207
Capitalized Leases
Non-Convertible Debt 5,317 6,262 6,746 7,195 8,207
Provision for Risks & Charges 731 738 803 738 685
Deferred Taxes 570 507 308 365 484
Deferred Taxes - Credit 760 722 562 596 730
Deferred Taxes - Debit 190 215 254 231 246
Other Liabilities 478 424 491 510 470
Other Liabilities (excl. Deferred
478 424 491 510 470
Income)
Total Liabilities 14,121 13,963 14,360 14,250 14,621
Common Equity (Total) 3,941 3,720 3,112 2,747 2,601
Common Stock Par/Carry
105 105 105 105 105
Value
Additional Paid-In
1,068 1,023 972 921 895
Capital/Capital Surplus
Retained Earnings 9,197 9,028 8,326 7,859 7,652
Cumulative Translation
Adjustment/Unrealized For. Exch. -2,111 -1,681 -1,668 -1,399 -1,467
Gain
Unrealized Gain/Loss
-4 - 3 - -
Marketable Securities
Other Appropriated Reserves 407 -40 -67 -49 -33
Treasury Stock -4,721 -4,715 -4,559 -4,690 -4,551
Total Shareholders' Equity 3,941 3,720 3,112 2,747 2,601
Accumulated Minority Interest 434 495 524 567 558

Total Equity 4,375 4,215 3,636 3,314 3,159
Liabilities & Shareholders'
18,496 18,178 17,996 17,564 17,780
Equity
COCACOLA COMPANY
INCOME STATEMENT
Year Ended 2022 2021 2020 2019 31/2018

Sales revenue $ 43,004 $ 38,655 $ 33,014 $ 37,266 $34,300
Less: Cost of goods sold (18,000) 15,357 13,433 14,619 13,067
Gross profits 25,004 23,298 19,581 22,647 21,233
Less: Operating expenses
Selling expense 12,880 12,144 9,731 12103 11,002
Administrative Expenses 439 420 398 278 267
Other operating Expenses 1,215 846 853 458 1,079
Total operating expense 14534 13410 10982 12839 12348
EBIT 10470 9880 8599 9808 8885
Less: Interest expense 449 276 370 563 950
EBT 10021 9604 8229 9245 7935
Less: Taxes 2,115 2,621 1,981 1,801 1,749
Net profits after taxes 7906 6983 6248 7444 6186
Less: Preferred stock dividends 10 10 10 10 10
Earnings available for common stockholders 7896 6973 6238 7434 6176
BALANCE SHEET
2022 2021 2020 2019 31-Dec-18
Assets
Short-term investments 1,043 1,242 1,771 1,467 2,025
Cash 9,519 $ 9,684 6,795 $ 6,480 9,077
Marketable securities 1,069 1,699 2,348 3,228 5,013
Accounts receivable 3,487 3,512 3,144 3,971 3,685
Prepaid expenses 3,240 2,994 1,916 1,886 2,059
Inventories 4,233 3,414 3,266 3,379 3,071
Total current assets 22,591 22,545 19,240 20,411 24,930
Goodwill 1,746 2,129 17,506 16,764 14,109
Property, plant and equipment 9,841 9,920 10,777 10,838 9,598
Furniture and fixtures 18,782 19,363 17,506 16,764 14,109
867
Other investments 501 818 812 854
Vehicles 635 785 649 736 745
Other noncurrent assets 6,189 6,731 6,184 6,075 4,148
Trademarks 14,214 14,465 10,395 9,266 6,682
Equity investments 18,264 17,598 19,273 19,025 19,412
Total assets 92,763 $ 94,354 87,296 $ 86,381 83,216
Liabilities and Stockholders' Equity

Current Liabilities
Accounts payable 15,749 $ 14,619 11,145 $ 11,312 9,533
Loan and Notes payable 2,373 3,307 2,183 10,994 13,835
Accruals 1,203 686 788 414 411
Current maturities of long-term debt 399 1,338 4,253 5,003
Long-term debt 14000 23568 20,125 5,516 5,376

Deferred income tax liabilities 2,914 2,821 1,833 2,084 2,354
Other noncurrent liabilities 10543 8,139 1,510 2,646
Total liabilities 27457 34528 26779 9110 10376
The Coca-Cola Company Shareowners’ Equity

Common stock,$0.25 par value; 1,760 1,760 1760 1760 1760
authorized — 11,200 shares; issued — 7,040 shares
Paid-in capital in excess of par on common stock 18,822 18,116 17,601 17,154 16,520
Retained earnings 25000 20000 26,555 31384 25778
Total stockholders' equity 45582 39876 45916 50298 44058
83,216
Total liabilities and stockholders' equity 92,763 $ 94,354 87,296 $ 86,381
NESTLE
INCOME STATEMENT
2018 2019 2020 2021 2022
31/12 31/12 31/12 31/12 31/12
Sales + Revenue 91,750.00 92,865.00 84,681.00 87,470.00 94,780.00
Cost of Goods Sold (46,070.00) (46,647.00) (42,971.00) (45,468.00) (51,745.00)
Gross Profit 45,680.00 46,218.00 41,710.00 42,002.00 43,035.00
Distribution Expenses (8,469.00) (8,496.00) (7,861.00) (7,919.00) (8,386.00)
Marketing and Administration Expenses (20,003.00) (19,790.00) (17,370.00) (17,294.00) (16,850.00)
Research and Developement Cost (1,687.00) (1,672.00) (1,576.00) (1,670.00) (1,696.00)
Other Trading Income 37.00 163.00 238.00 171.00 107.00
Other Trading Costs (1,769.00) (2,749.00) (908.00) (3,131.00) (3,015.00)
Other Operating Income 2,535.00 3,717.00 1,919.00 698.00 340.00
Other Operating Expenses (2,572.00) (1,313.00) (1,356.00) (1,178.00) (1,209.00)
Financial Income 247.00 200.00 109.00 80.00 210.00
Financial Expense (1,008.00) (1,216.00) (983.00) (953.00) (1,250.00)
Earnings before Interest and Taxes (EBIT) 12,991.00 15,062.00 13,922.00 10,806.00 11,286.00
Taxes (3,439.00) (3,159.00) (3,365.00) (2,261.00) (2,730.00)
Other Income 916.00 1,001.00 1,815.00 8,651.00 1,040.00
Net Operating Income After Taxes and
Interest 10,468.00 12,904.00 12,372.00 17,196.00 9,596.00
Preffered Stock Dividends 6837.38 7741.25 7636.13 7847.27 7440.26
Earnings Available for Common
Stockholders 3,630.62 5,162.75 4,735.87 9,348.73 2,155.74
Earnings Per Share (in CHF) 3.36 4.3 4.3 6.06 3.42
BALANCE SHEET
2018 2019 2020 2021 2022
31/12 31/12 31/12 31/12 31/12
Current Assets:
Cash and Equivalents 3,960.00 4,819.00 5,235.00 6,988.00 5,511.00
Short Term Investments 6,341.00 5,444.00 3,374.00 7,007.00 1,176.00
Account Receivables 12,036.00 12,534.00 11,454.00 12,359.00 12,401.00
Inventory 9,125.00 9,343.00 10,101.00 11,982.00 15,019.00
Prepaid Expenses 530.00 498.00 477.00 575.00 549.00
Other Current Assets 9,011.00 3,025.00 3,427.00 346.00 406.00
Total Current Assets: 41,003.00 35,663.00 34,068.00 39,257.00 35,062.00
Non-Current Assets :
Property/Plant/Equipment 29,956.00 28,762.00 25,840.00 28,345.00 30,141.00
Goodwill 31,702.00 28,896.00 27,620.00 31,012.00 31,262.00
Intangibles 18,634.00 17,824.00 20,148.00 22,223.00 20,237.00
Long Term Investments 13,359.00 14,116.00 14,599.00 14,630.00 16,276.00
Current Income Tax Assets 58.00 55.00 - - -
Other Long Term Assets 2,303.00 2,624.00 1,753.00 3,675.00 2,204.00
Total Non-Current Assets 96,012.00 92,277.00 89,960.00 99,885.00 100,120.00
Total Assets 137,015.00 127,940.00 124,028.00 139,142.00 135,182.00
Current Liabilities :
Financial Debt 14,694.00 14,032.00 12,019.00 10,092.00 10,892.00
Accounts Payables 17,800.00 18,803.00 18,515.00 20,907.00 20,523.00
Accruals and Deffered Income 4,075.00 4,492.00 4,917.00 5,051.00 5,114.00
Interest Expense 780.00 802.00 508.00 532.00 620.00
Derivative Liabilties 448.00 420.00 254.00 464.00 352.00
Current Income Tax Liabiltites 2,731.00 2,673.00 2,661.00 2,962.00 2,447.00
Other Current Liabilities 2,502.00 393.00 848.00 12.00 28.00
Total Current Liabilities 43,030.00 41,615.00 39,722.00 40,020.00 39,976.00
Non-Current Liabilities
Long Term Debt 25,700.00 23,132.00 27,928.00 36,482.00 43,420.00
Employee Benefit Liabilities 5,919.00 6,151.00 5,118.00 3,779.00 2,884.00
Long Term Provisions 1,033.00 1,162.00 1,029.00 1,106.00 1,113.00
Deffered Tax 2,540.00 2,589.00 2,636.00 3,794.00 3,671.00
Other Payables 390.00 429.00 1,081.00 234.00 1,326.00
Total Non-Current Liabilities: 35,582.00 33,463.00 37,792.00 45,395.00 52,414.00
Total Liabilities 78,612.00 75,078.00 77,514.00 85,415.00 92,390.00
Shareholder's Equity:
Share Capital 306.00 298.00 288.00 282.00 275.00
Retained Earnings 84,620.00 83,060.00 76,812.00 81,363.00 74,632.00
Common Treasury Stock/Treasure Shares (6,948.00) (9,752.00) (6,643.00) (6,194.00) (9,303.00)
Translation Reserve (20,432.00) (21,526.00) (24,397.00) (22,266.00) (23,559.00)
Non Controlling Interests 1,040.00 827.00 819.00 587.00 810.00
Other Reserves (183.00) (45.00) (365.00) (45.00) (63.00)
Total Shareholder's Equity 58,403.00 52,862.00 46,514.00 53,727.00 42,792.00
Total Liabilities and Shareholder's Equity 137,015.00 127,940.00 124,028.00 139,142.00 135,182.00
2022
Current Ratio Quick Ratio Inventory Turnover Average Collection Period Total Asset Turnover Debt Ratio Net Profit Margin R
Arla Foods 1.55 0.89 6.29 41.97 1.58 0.64 0.03
Pepsico 0.8 0.61 7.18 42.93 0.94 0.81 0.1
Coca Cola 1.15 0.93 4.25 29.6 0.464 3.4 18.4
Kellog's 0.66 0.38 6.08 41 3.66 1.52 0.06
Nestle 0.88 0.5 3.45 47.476 0.7 0.68 0.02
Industry Average 1.008 0.662 5.45 40.5952 1.4688 1.41 3.722
2021
Arla Foods 1.28 0.77 7.07 42.1 1.43 0.63 0.03
Pepsico 0.83 0.66 7.87 39.87 0.86 0.83 0.1
Coca Cola 1.13 0.958 4.5 33.2 0.409 2.7 29.9
Kellog's 0.64 0.38 6.93 38 4.18 1.57 0.1
Nestle 0.98 0.68 3.79 51.57 0.63 0.61 0.11
Industry Average 0.972 0.6896 6.032 40.948 1.5018 1.268 6.048 0
2020
Arla Foods 1.22 0.77 7.69 42.35 1,45 0.64 0.03
Pepsico 0.98 0.81 7 43.59 0.76 0.85 0.1
Coca Cola 1.32 1.09 4.11 34.8 0.378 3.26 26 0
Kellog's 0.66 0.42 7.05 41 3.95 1.5 0.09
Nestle 0.86 0.6 4.25 49.37 0.68 0.62 0.06
Industry Average 1.008 0.738 6.02 42.222 1.1536 1.374 5.256 0
2019
Arla Foods 1.24 0.77 7.62 39.15 1.48 0.65 0.03
Pepsico 0.86 0.7 8.26 42.51 0.86 0.81 0.11
Coca Cola 0.76 0.63 4.33 38.9 0.4314 9.48 26.3 0
Kellog's 0.72 0.46 7.46 42 3.96 1.52 0.07
Nestle 0.86 0.63 4.99 49.26 0.73 0.59 0.06
Industry Average 0.888 0.638 6.532 42.364 1.49228 2.61 5.314 0.
2018
Arla Foods 1.21 0.77 7.6 43.52 1.57 0.56 0.03
Pepsico 0.99 0.85 8.63 40.32 0.83 0.81 0.19
Coca Cola 0.87 0.759 4.25 39.2 0.412 8.02 25.9 0
Kellog's 0.7 0.4 6.55 37 4.29 1.43 0.1
Nestle 0.95 0.74 5.05 47.88 0.67 0.57 0.04
Industry Average 0.944 0.7038 6.416 41.584 1.5544 2.278 5.252 0.

FIN254 GROUP 7 Final Report 1

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FIN254 GROUP 7 Final Report 1

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Course Title: Introduction To Financial Management

Course: FIN254, Section: 14, Summer-2023

Dear Honorable Sir,

The analysis aims to present a balanced view of each company's financial

YEAR 2022 2021 2020 2019 2018

YEAR 2022 2021 2020 2019 2018

ii. Average Age of Inventory

AVERAGE AGE OF INVENTORY

iii. Average Collection Period

AVERAGE COLLECTION PERIOD

iv. Average Payment Period

TOTAL ASSET TURNOVER

2022 2021 2020 2019 2018

2022 2021 2020 2019 2018

ii. Times Interest Earned Ratio

TIMES INTEREST EARNED RATIO

2022 2021 2020 2019 2018

YEAR 2022 2021 2020 2019 2018

2022 2021 2020 2019 2018

OPERATING PROFIT MARGIN

2022 2021 2020 2019 2018

YEAR 2022 2021 2020 2019 2018

EARNINGS PER SHARE

ii. Market/Book Ratio

ROA (2022) = Net Profit Margin X Total Asset Turnover

FLM= Total Assets/Common Stock

FLM (2022) = 8746/3168=2.76

FLM (2021) =7813/2910=2.68

FLM (2020) =7331/2639=2.77

FLM (2019) =7106/2494=2.85

FLM (2018) =6635/2519=2.63

Current Ratio 0.95 0.86 0.86 0.98 0.88

Quick Ratio 0.74 0.63 0.60 0.68 0.50

Inventory Turnover 5.05 4.99 4.25 3.79 3.45

Average Age of Inventory

Average Collection Period

Average Payment Period

Total Asset Turnover

Total Asset Turnover 0.67 0.73 0.68 0.63 0.70

Debt Ratio 0.57 0.59 0.62 0.61 0.68

Time Interest Earned Ratio 16.66 18.78 27.41 20.31 18.20

Gross Profit Margin

Gross Profit Margin 0.50 0.50 0.49 0.48 0.45

Operating Profit Margin

Operating Profit Margin 0.11 0.14 0.15 0.20 0.10

Net Profit Margin

Net Profit Margin 0.04 0.06 0.06 0.11 0.02

Earnings Per Share

Earnings Per Share (given) 3.36 4.30 4.30 6.06 3.42

Return on Assets (ROA)

Return On Assets (ROA) 0.03 0.04 0.04 0.07 0.02

Return On Equity (ROE)

Return On Equity (ROE) 0.06 0.10 0.10 0.17 0.05

Price Earning Ratio

Price Earning Ratio 29.76 23.26 23.26 16.50 29.24

Market Book Ratio

Market Book Ratio 1.71 1.89 2.15 1.86 2.34

Beyond its business operations, Coca-Cola is actively involved in community engagement,