balance sheet ratios

PEPSICO

PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales.

Our main businesses – Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola – make hundreds of enjoyable foods and beverages that are loved throughout the world.

PepsiCo’s people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo’s promise to provide a wide range of foods and beverages from treats to healthy eats; to find innovative ways to minimize our impact on the environment by conserving energy and water and reducing packaging volume; to provide a great workplace for our associates; and to respect, support and invest in the local communities where we operate.

Our goal is to nourish consumers with a range of products that deliver great taste, convenience and affordability, from simple treats to healthy offerings.

Foods

PepsiCo’s foods division Frito-Lay is the leader in the branded salty snack market. All its products are free of trans-fat and MSG. It manufactures Lay’s potato chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The company’s high-fibre breakfast cereal, Quaker Oats and low-fat and roasted snack options like Aliva increase the number of healthy choices available to consumers.

Aliva

Cheetos

Kurkure

Lay’s

Lehar Namkeen

Quaker Oats

Uncle Chipps

Beverages

PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7UP, Nimbooz, Mirinda, Slice and Mountain Dew, in addition to low-calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drink Gatorade and fruit juices such as Tropicana and Tropicana 100%.

7UP

Aquafina

Duke's

Gatorade

Mirinda

Mountain Dew

Nimbooz

Pepsi

Slice

Tropicana

COCA-COLA

The Coca-Cola Company is the world's largest beverage company. Along with Coca-Cola, recognized as the world's most-valuable brand, the Company markets four of the world's top five soft drink brands, including Diet Coke, Fanta and Sprite and a wide range of other beverages, including diet and light soft drinks, water, juices and juice drinks, tea, coffee and sports drinks. Through one of the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate exceeding 1.8 billion servings each day.

Coca-Cola in India is the country's leading beverage Company with an unmatched portfolio of beverages. The Company manufactures and markets leading beverage brands like Coca-Cola, Diet Coke, Thums Up, Fanta, Limca, Sprite, Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh, Minute Maid 100%, Burn, Kinley and Georgia range of tea and coffee.

One of the early investors in India, the Coca-Cola system provides direct and indirect employment to more than 1, 50,000 people. The Company has more than 2.15 million retailers and our business has a multiplier effect on employment and earning opportunities. Coca-Cola in India is one of the largest domestic buyer of certain agricultural products like sugar, mango pulp etc. The Company's business also positively impacts industries like glass, plastics, resin manufacturers, sugar, automobiles, white goods manufacturers, banking etc.

The Coca-Cola Company has always placed high value on good citizenship. At the heart of business is a mission statement called the Coca-Cola Promise - "The Coca-Cola Company exists to benefit and refresh everyone that it touches". This basic proposition entails that the Company's business should refresh the markets, protect, preserve and enhance the environment and strengthen the community. Coca-Cola in India provides extensive support for community programs across the country,

with a focus on education, health and water conservation. The system has installed more than 500 rain water harvesting structures in the country. The system has also undertaken the rejuvenation and reconstruction of several traditional water bodies including check dams. The Coca-Cola system is committed to work with communities across India in its effort to contribute to mutual growth and development.

Coca-Cola

Diet Coke

Thums Up

Sprite

Fanta

Limca

Maaza

Minute Maid Pulpy Orange

Minute Maid Nimbu Fresh

Burn

Kinley Water

Kinley Soda

Schweppes

GEORGIA Gold

Balance Sheet Ratios:

1. Current Ratio = Current Assets Current Liabilities

Current Assets : It includes Sundry Debtors, Loose Tools, Due/Accrued Income, Bills Receivable, Cash and Bank Balance, Closing Stock of raw material, etc.

Current Liabilities : It includes Sundry Creditors, Bills Payable, Outstanding Expenses, Unclaimed dividend, Provision for Tax, Bank Overdraft, etc.

Current ratio is a liquidity/Solvency ratio which includes the ability of the concern to meet its short term liabilities. It measures the short term solvency of the concern. It is used by a creditor to judge the safety margin available and to decide the amount and the terms of the credit.A current ratio of 2:1 is regarded as standard ratio.

Pepsi co. = 18.72 = 1.0954 17.09

Coca-Cola India = 30.33 = 1.0902 27.82

2. Quick / Liquid Ratio = Quick Assets Quick Liabilities

Quick Assets : It includes all Current Assets elements, but it excludes Closing stock and Pre-payments from current assets.

Quick Liabilities : It includes all Current Liabilities elements, but it also excludes Bank Overdrafts and Cash Credit from current liabilities.

Liquid ratio compares the quick assets with the quick liabilities. It is expressed in the form of pure ratio. It is also known as Quick ratio or Acid ratio. A liquid ratio of 1:1 is regarded as standard liquid ratio.

Pepsi co. = 13.66 = 0.7993 17.09

Coca-Cola India = 24.285= 0.8729 27.82

3. Stock To Working Capital Ratio = Stock * 100 Working Capital

Working Capital : It contain the balance of current assets less current liabilities .

Stock : It includes all closing stock.

Stock to working capital ratio show the relationship between the closing stock and the working capital. It helps to judge the quantum of inventory in relation capital of the business. It is expressed as a percentage. It is also known as Inventory Working Capital Ratio. A stock to working capital ratio is considered it’s standard ratio as 100%.

Pepsi co. = 3.581 = 2.1969 1.63

Coca-Cola India = 3.264 = 1.3004 2.51

4. Proprietary Ratio = Proprietor’s Funds or Shareholder’s Equity *100 Total Assets or Total Liabilities

Proprietor’s Funds : It includes Paid up Equity capital Reserves and Surplus including capital reserves, revenue reserves Profit and loss Credit balanceLess: - Accumulated losses i.e. P&L Debit balanceLess: - Fictitious Assets like Miscellaneous Expenditure not written off.Paid up Preference Capital

Total Assets : It includes Fixed Assets + Investment + Current AssetsTotal Liabilities : It includes Own Funds + Loans + Current Liabilities

Proprietary ratio compares proprietor’s funds with total liabilities or total assets. It is usually expressed in the form of percentage. It is also known a Net Worth to Total Assets Ratio, Equity Ratio and Net worth Ratio or Asset Backing Ratio. A proprietary ratio of 65% is regarded as standard ratio.

Pepsi co. = 0 = 0 0

Coca-Cola India = 0 =0 0

5. Debt- Equity Ratio = Debt = Borrowed Funds Equity Proprietor’s Funds

Borrowed Funds : It includes Debentures, Loans, Interest accrued and due, etc.

Proprietor’s Funds : It includes Equity share capitalReserves & SurplusLess:- P&L A/C Debit balance(loss)

Miscellaneous Expenditure not written offPreference share capital

Debt-Equity ratio is a solvency ratio which indicates the proportion of debt and equity in financing of the assets of the concern. Debt-equity ratio shows the (i) margin of safety for long term creditors; and (ii) the balance between debt and equity. If the actual Debt-equity ratio is close to 2:1 (regarded as standard).

6. Capital Gearing Ratio = Capital Entitled to Fixed Ratio of Interest or Dividend Capital not so Entitled to Fixed Ratio of Interest or Dividend

Capital Entitled to Fixed Ratio of Interest or Dividend: It includes Preference capital, Debentures, Long term Loans, Borrowed Funds, etc.

Capital not so Entitled to Fixed Ratio of Interest or Dividend: It includes Equity share capitalReserves & SurplusLess:- P&L A/C Debit balance(loss) Fictitious Assets

Capital gearing ratio is a leverage ratio which indicates the proportion of debt and equity in the financing of assets of assets of a concern. ‘Leverage’ means the process of increasing the equity shareholders return through the use of debt also known as ‘gearing’ or ‘trading on equity’. Capital gearing ratio shows the balance between debt and equity.

Revenue Statement Ratios:

1. Gross Profit Ratio = Gross Profit *100 Net Sales

Gross Profit: It includes Sales less Cost of Goods Sold.

Cost of Goods Sold: It includesOpening stockAdd: PurchaseAdd: Direct expensesLess: Closing stock

Net Sales: It includes Sales less Sales returns less Allowances.

Gross Profit ratio is a profitability ratio, which shows the relationship between profits and sales. This ratio help to judge (i) how efficient the concern is in managing its production, purchase, selling and inventory; (ii) how good its control is over the direct cost; (iii) how productive the concern is; (iv) how much amount is left to meet other expenses and earn net profits.

2. Operating Ratio = Cost of Goods Sold + Operating Expenses * 100 Net Sales


Operating Expenses: It includes Office and Administration Expenses, Selling and Distribution Expenses,Finance Expenses Excluding Interest on Loans and Debentures.


Operating ratio expresses the relationship between total operating cost and net sales. It is expressed by way of percentage. The standard ratio for operating ratio is 100%.

3. Expenses Ratio = Expenditure * 100 Net Sales

Expenditure: It includes Administrative ExpensesSelling ExpensesOperating Expenses


Expenses ratio expresses the relationship between each item of expenditure and net sales. It is expressed as a percentage. Total of all Expenses ratio will be equal to Operating ratio.

4. Operating Profit Ratio = Operating Profit * 100 Net Sales

Operating Profit: It includesGross profitLess: Operating expensesOffice and Administration Expenses, Selling and Distribution Expenses,Finance Expenses Excluding Interest on Loans and Debentures.


Operating Profit ratio indicates the relationship between Operating profit and the sales. It is usually expressed in the form of percentage. It is also known as Net Operating Profit Ratio.

5. Net Profit Ratio = Net Profit (before tax) * 100 Net Sales

Net Profit before tax: It includesOperating net profit Add: Non-operating incomeLess: Non-operating expenses


Net Profit ratio indicates the relationship between net profit and the sales. It is usually expressed in the form of a percentage. Net profit ratio is a profitability ratio, which shows the relationship between profits and sales. It indicates net profits from all type of activities of the entire business. It measures the overall profitability from (a) operating activities of buying/selling products; (b) financing activities of borrowing/ lending ; and (c) buying/selling investments. This ratio helps to judge (i) how efficient the concern is in managing all its activities of operations , financing and investment; and (ii) how much amount is available is for appropriations.

6. Stock Turnover Ratio = Cost of Goods Sold Average Stock


If stock is valued at sales price, formula will be = Net Sales Average Stock

Average Stock = Opening Stock + Closing Stock 2

Stock Turnover ratio is a activity ratio, which shows the relationship between sales and stock. Its purpose is to (i) calculate the speed at which stock is being turned over into sales; (ii) calculate the stock velocity to indicate the period taken by the average stock to be sold out; and (iii) judge how efficiently the stock are managed and utilized to generate sales. There is no standard Stock turnover ratio in absolute terms.

Composite Ratios:

1. Return on Investment/ Capital Employed = Profit (before interest, tax) *100 Capital Employed

Profit before interest & tax: It includes Profit before interest on long term borrowings, tax & dividends Less: Abnormal, non-recurring items.

Capital Employed: It includes Equity capitalAdd: Preference capital + Reserves & SurplusAdd: Long term Borrowings (Term loans + Debentures)Less: Factious assets like Miscellaneous Expenditures not written offLess: Profit & Loss A/C Debit Balance (loss)

Capital employed may be taken to mean Assets Employed in which case; Capital Employed: It includesFixed AssetsAdd: Current assetsLess: Current LiabilitiesExclude fictitious assets

Return on capital employed ratio is profitability ratio which shows the relationship between profits and investments. Its purpose is to measure the overall profibility from the total funds made available by the owners and lenders. Thus ratio helps to judge how efficient the concern is in managing the funds at its disposal.

2. Return on Proprietor’s Fund = Net Profit (after tax) *100 Proprietor’s Funds

Net Profit (after tax): It includes Profit after interest and tax.

Proprietor’s Funds : It includes Paid up Equity capital Reserves and Surplus including capital reserves, revenue reserves Profit and loss Credit balanceLess: - Accumulated losses i.e. P&L Debit balanceLess: - Fictitious Assets like Miscellaneous Expenditure not written off.Paid up Preference Capital

Return on Proprietor’s Fund is a profitability ratio, which shows the relationship between profits and investments by the proprietors in the concern. Its purpose is to measure the rate of return on the total fund made available by the owners. This ratio helps to judge how efficient the concern is in managing the owner’s funs at its disposal.

3. Return on Equity Capital = Profit available to Equity Shareholders * 100 Equity Shareholders Funds

Profit available to Equity Shareholders: It includes Profit available after interest, tax and preference dividend.

Equity Shareholders Funds: It includes Equity capital Reserves & SurplusLess: Factious assets like Miscellaneous Expenditures not written offLess: Profit & Loss A/C Debit Balance (loss)

Return on Equity Capital is profitability ratio, which shows the relationship between profits and the equity shareholder funds in the concern. Its purpose is to calculate the amount of profits available to take care of equity dividends, transfer to reserves etc. It is used by the present or prospective investors for deciding whether to purchase, keep or sell the equity shares.

4. Earning Per Shares = Net Profit attributable to equity shareholders No. of Equity Shares

Net Profit attributable to equity shareholders: It includes Profit after tax less preference dividend.

No. of Equity Shares: It includes number of equity shares outstanding.

Earning Per Shares is a profitability ratio, which show the relationship between profits and the number of equity shares in the company. Its purpose is to calculate the amount of profits available on each equity share to take care of equity care of equity dividend, transfer to reserves, etc. It is used by the present or prospective investors for deciding whether to purchase, keep ar sell the equity shares.

5. Price Earnings Ratio = Market price of an equity share Earnings per share

Market price of an equity share: It includes Quoted price of a listed equity share.

Earnings per share: It includes = Net Profit attributable to equity shareholders No. of Equity Shares

Price Earnings Ratio measures the relationship between the Market price of the equity share and the Earning Per Share. It is usually expressed as a fraction.

6. Dividend Payout Ratio = Dividend to Equity Shareholders * 100 Profit Available to Equity Shareholders

Dividend to Equity Shareholders: It includes Equity Dividend means the cash dividend paid to equity shareholders.

Profit Available to Equity Shareholders: It includes Profit Available to Equity Shareholders means Net Profit after interest, income tax and preference dividends.

Dividend Payout Ratio shows the relationship between the dividend paid to equity shareholders out of the profits available to the equity shareholders.

7. Debt Service Ratio8. Debt Service Coverage Ratio9. Debtors Turnover Ratio10.Creditors Turnover Ratio

balance sheet ratios

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