ACC 318 Module Two Assignment
Guidelines and Rubric
Overview
Financial ratios are used by organizations to analyze balances from
different periods or against competitors. Investors can learn much
information about an organization from the ratios. In this assignment you
will explore debt-to-assets ratios, times-interest-earned ratios, and
foreign debt. This assignment will provide you with practice to explore the
concepts in the projects in this course.
Directions
This assignment will use the cash flow statement of The Coca-Cola
Company and PepsiCo, Inc. presented in Appendices C and D, respectively,
which are linked in the Supporting Materials Section. The companies’
complete annual reports, including the notes to the financial statements,
are also available online. Analyze the results of the financial ratios for The
Coca-Cola Company and PepsiCo, Inc. Remember, you will need to look at
both sets of financials for each company and address the rubric criteria for
both companies. Be sure to include citations for any answers you need to
explain.
Specifically, you must address the following rubric criteria:
Debt-to-Assets Ratios
1. Calculate the quality of the debt-to-assets ratios for both
companies.
2. Explain the quality of the debt-to-assets ratios for both
companies.
3. Determine which company is more highly leveraged.
Times-Interest-Earned Ratios
1. Calculate the times-interest-earned ratios for both companies.
2. Explain the times-interest-earned ratios for both companies.
Address the following questions in your response:
A. Are the times-interest-earned ratios adequate?
B. Is the times-interest-earned ratio greater than or less than
2.5? What does that mean for the companies' income?
C. Can the company afford the interest expense on a new loan?
Foreign Debt
1. Explain why The Coca-Cola Company and PepsiCo, Inc. may
use foreign debt to finance their operations.
2. Explain the risks involved in using foreign debt to finance
operations.
What to Submit
Submit this assignment by completing the Module Two Assignment
Template. Sources should be cited according to APA style.
Supporting Materials
The following resources support your work on this assignment:
Textbook: Appendix C: Specimen Financial Statements: The Coca-Cola
Company
This appendix provides The Coca-Cola Company’s financial statements as
presented in the company’s 2020 10-K report.
Textbook: Appendix D: Specimen Financial Statements: PepsiCo, Inc.
This appendix provides PepsiCo, Inc.’s financial statements as presented in
the company’s 2020 10-K report.
Website: PepsiCo, Inc. Form 10-K Annual Report
This website provides PepsiCo, Inc.’s Form 10-K.
Website: The Coca-Cola Company Form 10-K Annual Report
This website provides The Coca Cola Company’s