PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (in millions except per share amounts, unaudited) Quarter Ended March 25, 2006 Quarter Ended March 19, 2005 Net Revenue . . . . . . . . . . . . . . . . . . . . . . Cost of sales . . . . . . . . . . . . . . . . . . . . . . . Selling, general and administrative expenses Amortization of intangible assets . . . . . . . . . Operating Profit . . . . . . . . . . . . . . . . . . . Bottling equity income . . . . . . . . . . . .
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Competition: High • Threat of New Entrants: High • Threat of Substitution: Low-Moderate • Power of Suppliers: Low • Power of Buyers: Low • Best profit margin in the industry • Moderate Leverage • Good dividend yield and earnings growth • Attractive per-share earnings growth due to large share repurchases • Significant internal exposure and shareholder focus • Commodity cost risks • Extremely competitive industry • High food, energy, and labor cost concerns • Product failures McDonald’s Corporation’s
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secondary market. B. in the primary market. C. usually with the assistance of an investment banker. D. a and c. E. b and c. 3. Which of the following statement(s) is (are) true? A. Option volume on the TSX is greater than that on the ME. B. Share volume of TSX trades are greater than that of the ME. C. The TSX is the only stock exchange that is national in scope. D. a and b. E. b and c. 4. The following statements regarding the specialist are true: A. Specialists maintain a book listing
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Comments: The case provides an excellent vehicle for exploring and challenging the notion of optimal capital structure in theory and practice. American Home Products (AHP) is a very successful firm that has not debt in its capital structure. Because of its efficiency in asset management and its high level of profitability, AHP does not need debt to finance its operations. The case focuses on the theory of optimal capital structure and the practical problem of determining an optimal debt ratio. Questions
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Cash dividends is a distribution of cash to shareholders. For a corporation to pay a cash dividend, it must have all three of the following: 1. Enough retained earnings 2. Enough cash 3. A declaration of dividends On the declaration date, a company’s board of directors formally declares the cash dividend and announces it to shareholders. ● An entry is required to recognize the increase in cash dividends and the increase in the current liability dividends payable. Example: To
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Land's End Case Analysis Question a Lands’ End recently implemented a strategy of filling nearly all orders when the order is placed. In what year do you believe the company implemented this strategy and how is the strategy reflected in the information contained in the statement of cash flows? It is year 8 that Lands’ End implemented the strategy. Since the strategy tends to fill all orders at once, the company should has enough inventory to sustain such Just in Time service. Therefore, the
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earlier in the week. The banker, whom Dubinski had known for years, asked for the meeting after a group of private equity investors made discreet inquiries about a possible acquisition of Blaine. Although Blaine was a public company, a majority of its shares were controlled by family members descended from the firm’s founders together with various family trusts. Family interests were strongly represented on the board of directors as well. Dubinski knew the family had no current interest in selling—on
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AUDITOR’S PROCEDURES IN VERIFYING EQUITY The equity capital accounts include common stock, preferred stock, paid-in capital and retained earnings. Verifying of shareholders’ equity is important to ensure that the share capital has been properly classified and disclosed in the financial statement and changes are properly authorized. Besides, an organization should properly maintain their statutory records which detail important aspects of its operations and structure. Large organizations such as
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Meghan Michel 9/8/2015 Finance 403 Chapter 6 Mini Case a. What effect did the expansion have on sales and net income? Sales increased 70% off of the $3,432,000 in 2014 to $5,834,000 in 2015. Revenue went up by 2.4 million dollars but cost of goods sold went up by 2.1 million dollars therefore it is of no surprise that EBIT fell Net income fell from $87,960 to ($95,136) despite the 70% increase in sales due to the 2.6 million dollar increase in total operating expenses. What effect did the
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GMTC (GMTC). The questions posed to you are: - 1. In theory, to fund an increased dividend payout or a stock buyback, a firm might invest less, borrow more, or issue more stock. Which of those three elements is Gainesboro’s management willing to vary, and which elements remain fixed as a matter of the company’s policy? 2. What happens to Gainesboro’s financing need and unused debt capacity if: a. no dividends are paid? b. a 20% payout is pursued? c. a 40% payout is pursued? d. a residual
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