# PepsiCo and Coca-Cola 1. How much working capital did each company have at the end of 2013?...

## Question:

PepsiCo and Coca-Cola

1. How much working capital did each company have at the end of 2013? Speculate as to their rationale for the amount of working capital they maintain.

2. What is the most significant difference in the asset structure of the two companies? What causes this difference?

3. What were the two companies' trends in net cash provided by operating activities over the period from 2011 to 2013?

## What Is Operating Cash Flow:

A company's Operating Cash Flow is presented at the very top of the cash flow statement. The Operating Cash Flow includes cash generated from core operations and changes to the company's working capital balances.

1.

The amount of capital kept on hand is probably due to the volatility of demand for their products.

Working capital = Current assets - current liabilities

PepsiCo: 22,203-17,839

=$4,364 Million Coca-Cola::3,158.3-2,112.8 =$1,045.5 Million

2.

PepsiCo has much larger non-current assets which is mostly due to the $16 Billion of Goodwill on the balance sheet that Coca COla does not have. 3. Pepsi Co's operating cash flow has increased from$8,944 Million to $9,688 Million over 3 years, which is a healthy increase. Coca Cola's operating cash flow has decreased slightly from$741.9 Million to \$733.1 Million over 3 years, which is a sign of stability..