Performing a financial analysis of a company allows an investor or creditor to fully understand the make-up of that particular company. For Pepsi Co, Inc. and The Coca-Cola Companies the below vertical and horizontal analysis along with selected ratios provide details on each company to allow comparison between them. Pepsi Co, Inc. shows a great deal of assets and property ownership while The Coca-Cola Companies net revenue is lower their net income is higher. The Pepsi Co, Inc. has more assets than the Coca-Cola Company, but more of their assets are owned by creditors. Short-term, Pepsi Co, Inc. has a higher liquidity than The Coca-Cola Companies, but their long-term solvency is lower. These differences, although many are slight, would make the difference between investing as an individual or as a creditor. Each investor would have to carefully evaluate their own strategy compared to that of the company’s to ensure they were similar. A thorough evaluation of strategy against horizontal and vertical analysis of each company with subsequent ratios would lead to a successful partnership for the investor, be it a retail stock owner or a creditor. The purpose of this paper is to provide data and analysis of PepsiCo, Inc. and The Coca-Cola Companies financial statements so that a potential investor can make an educated decision about where to place their money. The paper shows a vertical analysis of each company’s consolidated balance sheet, a horizontal analysis of their consolidated statement of income ratios showing solvency, liquidity and profitability. Vertical Analysis Vertical analysis presents an opportunity to evaluate a company’s make-up and reveals information about its year-to-year changes by comparing each lin... ... middle of paper ... ... show that the company is growing and expanding, property and inventory, as a percentage of assets, should be increasing instead of decreasing. More property and inventory, if it is not owned by creditors, would also decrease their debt to total assets ratio. PepsiCo, Inc. and The Coca-Cola Company are both strong companies with billions in sales each year. A creditor, investor or business planner would each evaluate the company in different ways using different ratio and financial analysis. As an investor, I see Pepsi as a larger company with more assets and I would expect them to have a larger market share as a result. Coca-Cola, however, appears to be a stable company capable of growth with investment priorities in their own companies. Slight changes by either company could propel them to the head of the industry, although they are both industry leaders.
The first financial ratio of the analysis is the Price to Earnings ratio (“P/E ratio”). The ratio is computed by dividing the price of one share of common stock, by the earnings per share of common stock. This analysis uses diluted earnings per share which assumes the issuance of new stock for all existing stock options. Also, the price of the stock was computed as an average of the fourth quarter high and low stock prices published in the 10K report of each company, because the year end stock prices were not listed for all the companies. Because the P/E ratio measures the relative costliness of different stocks, in relation to their income, it provides a useful place to begin the analysis.
You would not buy a home, car or other large purchases without researching what product offered you the most for your money. The same is true when investing in a company. Investors do avid research on multiple companies to find what company matches the investors' criteria. In this paper Team C will research both AT&T and Verizon's financial documents. Team C will compare selected ratios, cash flow and make recommendations how both companies can manage cash flow for the future.
In order to make inferences about a company’s financial condition, its operations, and its attractiveness as an investment we have analyzed financial ratios and compare ratios derived from SVU’s financial statements (see chart 1).
Investing in a company has certainly changed over the years. Financial information is literally at one's fingertips via the internet. In today's fast paced corporate environment companies are under tremendous scrutiny to maintain their edge. The company I am evaluating is NIKE. This Financial analysis will consist of the following: Ratios from the Income Statement, Statement of Owner's Equity, and Balance Sheet. This information is designed to assist a potential investor.
Coca Cola has a well-organized leadership that is established around the world. The Coca Cola Company limited is viewed as one of the world’s biggest beverage companies making it the top producer and marketer of quality soft drinks. Coca Cola faces a lot of competition in the market from companies such as Pepsi forcing them to go over budget each year on production and marketing to develop new product design and to stay ahead of the competition.
is farr more different than Kroger and Coca-Cola; Pepsico. has their attention towards employees more than their customers. Employees of Pepsico. are expected to show respect towards eachother while putting "purpose" behind their performance. Pepsico. is also comitted to delivering susatained growth thrrough empowered people acting with responsibility and building trust. Pepsico. is similar to Coca-Cola and Kroger due to the fact that their focus is heavily put on integrity.
Eating regimen drinks flew up as well, making a radical new pop section. Pepsi's effective invasion into the nibble sustenance business with Frito Lay have helped it fundamentally, particularly in the previous decade. Then, Coke has stayed entirely in drinks. Despite the fact that Pepsi's refreshment brands may not be as solid, its nibble sustenance business is gigantic. Coke has a major lead in the cola piece of the overall industry over Pepsi, yet Pepsi's different business lines pull in more money. Each brand has a unit of big names on their side. The two brands have rolled out huge amounts of improvements to their logos all through their histories. Neither looks anything as they made unique. They've both held onto the advanced world as web-based social networking gets greater and greater - yet Coke is by all accounts faring better so
The Coca-Cola company is world wide beverage company. It has an annual revenue of over $45 billion dollars. It is one of the world’s most recognizable brands. The company is the number one nonalcoholic beverage company. Coca-Cola owns, operates and markets more than 500 beverage brands, that range from sparkling water to juice, to of course, soda. These products are sold in more than 200 countries.
Financial statements are a formal record of financial activities. During this 10-K report of financial analysis, we provided an overview of the Balance Sheet and Income Statement. The financial statement also overviewed what we analyzed comparing two major affordable retail companies such as Wal-Mart and Target. The information resulted in accurate information provided by the Security Exchange Commission (SEC). The SEC information gave us insight to analyze the two retails financial condition that involved both short and long-term, income and expense, and assets and liabilities. This insight is an important tool for investors in assessing Wal-Mart and Target overall position in the market place. From what it owes and owns as well the
When evaluating financial statement data for a specific period of time we use a technique call horizontal analysis. This method will show if there has been an increase or decrease in the financial status of PepsiCo, Inc. and Coca-Cola. In comparing both of these companies I have evaluated the net revenue and net income for the period of 2003 to 2005, with 2003 being the base year and 2005 being the current year. The formula I have used will show the change in the net revenue and net income for this span of time. The formula to calculate the change since the base period is the current year amount minus the base year amount divided by the base year amount.
I have leant that ratio analysis offers better insight of a company’s financial position on the short-term and long-term basis. However, I would recommend that investor advice should be based on ratio analysis that considers ratios from several years. This will ensure that the investor is making an informed decision based on the company’s financial ratio performance trend.
PepsiCo is one of the most recognized names in the snack and beverage industry, with brands like Frito-lay, Gatorade, Tropicana, and Quaker, however, it is best known for its flagship soft drink brand - Pepsi and its rivalry with Coca-Cola. To begin, PepsiCo first caught my Interest in the way it manages its business and markets its products. PepsiCo being a relatively young company compared to its rival Coke, has proven to be a formidable opponent going “head to head” with one of the biggest companies in the world (Coca-Cola). Now, when I notice PepsiCo’s growth, the first thing that came to my mind was that it is thanks to its great marketing campaigns, that Pepsi has grown to become the globally recognized brand that it is today. I also admire PepsiCo because I think the there is a high level of entrepreneurship in the way they acquired smaller brands like Gatorade thereby eliminating their competition before they become competition.
Coke and Pepsi have been raging war for over a century now, turning their sodas into a multi-billion-dollar industry. Coke has been able to drive more earnings for its bottom line, and while Coke’s net income has been trending downward in recent years, it manages to stay ahead thanks to superior margins. Pepsi, on the other hand, has produced consistent net profit margins of around 10%, while Coke margins have been in the 15-18% range for the past several years (O’Brien). Every company has a Market Cap, which is basically a fancy way of saying how much the company is worth, and Coca-Cola’s market cap is a whopping $180 billion. Pepsi’s Market Cap is $150 billion, which may not seem like a big difference, but $30 billion is a lot of cheddar. Therefore, Coca-Cola owns 51% of the soft drink market, whereas Pepsi only owns 22% of it. Coke claims to own a total of 35 different brands, including Fanta, Sprite, Powerade, Vitaminwater, and many others. Pepsi owns 22 different brands, including 7up, Gatorade, and Mountain Dew “Coke (Coca-Cola) vs Pepsi - Soda
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
The purpose of this report is to compare financial reports from the two largest soft drink manufacturers in the world. The Pepsi Co. and Coca Cola have been the industry's leaders in their market since the early 1900's. I will use relevant figures to determine profitability, and break down key ratios in profitability, liquidity, and solvency. By breaking down financial statements, and converting them to percentages and ratios, comparisons can be made between competitors regardless of size.