PepsiCo and Coca-Cola are fierce competitors and according to their financial statements they are both healthy companies. Therefore, if I had to make a decision, I would invest in Coca-Cola because it has a higher revenue, a stronger long-term debt-to-equity ratio, steadily increasing net income per common share, and a high and growing solvency ratio. growth. PepsiCo still shows healthy growth and surpasses Coca-Cola in many areas. I will conduct a financial analysis of Coca-Cola and PepsiCo to identify their strengths and weaknesses, ultimately deciding which is worth the investment. With any financial statement it is important to note, when comparing and contrasting the differences between the financial data page which is usually found among the first few pages. This statement, when juxtaposed with the competitor, usually highlights areas in which both are strong, which leaves a lot of work to be done with the rest of the unostentatious information. In this case they are both quite healthy but the highlights are still indicative of certain information if you choose to investigate further. When you only want to highlight your strengths, it is obvious that certain information is omitted and other exaggerated. This is true for any company looking to acquire shareholders and is a common practice with organizations who, after completing financial calculations, hand the project over to human resources to enhance the beauty of the package. Coca-Cola's current ratio, which "is widely used to evaluate a company's liquidity and ability to pay short-term debt," has fallen from 1.1:1 in 2004 to 1.04: 1 in 2005. (Wegandt, Kimmel, & Kieso, 2008 p 707) This indicates a slight decline in Coca -Cola's liquidity... middle of paper... numbers concludes that both companies are healthy, even if Coca-Cola surpasses its competitor in countless areas. Access to both companies' ten-year financial statements would provide a more complete analysis of the current state of Coca-Cola and PepsiCo. PepsiCo and Coca-Cola appear to use different methodologies to determine the source of investment funds, shareholder payments, and debt obligations. This difference reflects the different styles preferred by each accounting and finance department and does not make one method better than the other. If I had to choose between investing in Coca-Cola or PepsiCo based on 2004 and 2005 financial analyses, I would definitely choose Coca-Cola. References Weygandt, Kimmel, and Kieso (2008). Financial accounting: a focus on fundamentals. John Wiley and Sons Inc.