FERNANDEZ, CLESNNA ALEXIS P.

BSA-2 MWF 7:00-8:00 PM DEC 6, 2018

Summary of Findings

Based on PepsiCo, Inc. and Subsidiaries’ consolidated financial statements for the year
2018, it can be concluded that:

 Compared to 2017 and 2016, the 2018 operations had the highest net income due
to its tax benefits that year. However, cost of sales consistently comprises 45%of
the net sales or revenue which means costs of sales are almost half of the sales
revenue collected. Meaning, cost of sales are high. As a result, the company has
limited profit to apply for other expenses e.g. operating and other expenses that led
to a smaller profit than expected.
 Due to higher sales and currency differences in foreign subsidiary companies, there
is a need to make currency adjustments therefore they set up an account entitled
net currency translation adjustment in the statement of comprehensive income.
 There are a lot of senior workers in the company that have retired since 2017 and
more so in 2018 rather than on the previous year that is 2016.
 PepsiCo, Inc. is heavily financed by debt rather than by equity as they make up
81.2% and 18.8% respectively of its financing. This is due to the absence of
issuance of preferred shares and that majority of their ordinary shares are composed
by treasury shares. Also, PepsiCo, Inc. has a greater long-term debt obligation than
short-term obligations in order for them to invest on their equipment needed for
their production. As a result, the company has a high interest expense to be paid
annually.