Wednesday, February 12, 2020

Accounting Cash Flow Coursework Example | Topics and Well Written Essays - 750 words

Accounting Cash Flow - Coursework Example The more cash associated with Pepsi’s depreciation means that the company had deducted from more from their assets. Further, for both 2011 and 2012, Coca Cola did not have any changes in liabilities, inventories or cash receivables, while Pepsi had all of the above. This affected Pepsi’s cash flow used in its business’ operation as compared to Coca Cola’s. Further, Coca Cola experienced more cash flows provided by adjustments in income as compared to Pepsi, which used more in the adjustment of its net income. Pepsi used 88000 (2012) and 250,000 (2011) in changes in accounts receivables while Coca Cola did not spend or received from this variable. For Pepsi the cash spent reduces from 2011 to 2012, implying that the company collected more revenues as compared to the cash collected. Further, Pepsi also experienced a decrease of the cash provided by changes in inventories from 144,000 to 4000 (2011 to 2012 respectively). This indicates more revenue as compare to cash collected by the company. For Coca Cola, there was no change recognized in its inventories and account receivables meaning the company did not experience any changes in their current assets. There could be no comparison of revenue and cash collected, which equates to management of working capital. Indifference to Pepsi, which makes use of account receivables and inventories, this implies that Coca Cola relied on other operating activities to manage its working capital. c. Analyse and explain the Financing Activities of each company in the two consecutive operating periods. State with reasons which of the two companies faces lower risk for their long-term funding policy in the most recent year. Both of the two companies witnessed the same trend throughout the two operating periods, for the cash flows used in financing activities, except for the other cash flows. For pepsi there was an increase in the money used for payment

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