Pepsi vs. Coke the epic battle that every American and from the looks of their financial statements possibly everyone in the world must deal with does it have a winner. For the fiscal year 2005 it certainly does through analyzing financial statements with vertical, horizontal, and ratio analysis investors are able to clearly decide who the better choice for their investment is. By careful scruitiny and attention to detail any investor can safely put their money in a buiseness as an investment so long as they are adhering to rules and regulations of the GAAP. Using the tools for financial analysis and the information given I will determine the winner of that battle for 2005 at least from the investors point of view. In our literature it states that a “vertical analysis evaluates financial statement data by expressing each item in a financial statement as a percent of a base amount.” I chose to look vertically at current assets and liabilities, of both companies so I can compare these figures between Coca-Cola and PepsiCo to find out who is in better current standing. Current assets Vs. Total Assets for PepsiCo: ( 2005) 10454/ 31727 = approx. 33% of total assets are current (2004) 8639/ 27987 = approx. 31% of total assets are current Now we will look at the current liabilities vs. total liabilities for PepsiCo (2005) 9406/ 17476 = approx. 54% of the total liabilities are current (2004) 6752/ 14464 = approx. 47% of the total liabilities are current Current assets Vs. Total Assets for Coca-Cola: 2005) 10250/ 29427 =Approx. 35% Current 2004) 12281/ 31441 = Approx 39% Current And we will look at the current liabilities vs. total liabilities for Coca-Cola: 2005) 9836/ 29427 = Approx. 33% Current 2004... ... middle of paper ... ...id volume growth for 2005…The company said it earned $864 million, or 36 cents a share, in the fourth quarter, a 28 percent drop from the year before. However, excluding one-time charges, the company earned 46 cents per share, a penny ahead of analysts' expectations. One-time items included taxes on repatriated foreign earnings and a charge related to a bottling investment.(Wilbert, 06)” It is a sad day when you have a 28% drop year over year and exceed “Wall Street expectations.” If I were in their shoes I would do whatever I had to do to entice consumers to put their hard earned cash back in my company even at the cost lower profitability sell for less but sell more…hey it works for Wal-Mart why not you to Coca-Cola. Until they change their investment and marketing strategies I would steer clear of investing in any new Coca-Cola stock for more than a few years.
Looking at the historical trends of Coke and Pepsi in terms of EVA we find Coca-Cola's
Over the past thirty days Coca Cola Stock seemed to remain stagnant. While over a long portion of time Coca Cola could be very profitable, as of right now it seems to be a constant range of $40 to $42. The risk with investing in Coca Cola stock is that if one were to be wanting to make money with this stock it would take a very long time. It is more the type of stock someone buys in order to retain their money instead of make money. This is not a bad thing in the long run, but if someone were obtaining their fortune in this way Coca Cola would not be the stock to buy. Something with better fluctuation would suit a person like that. Overall I lost about $1.27, which is not bad at all, considering I bought it at the highest point of the thirty day period. I learned that longevity is not always the best way to go unless someone has a long time to wait it out. Plus this type of stock can remain stagnant for a very long time before skyrocketing or falling off the stock market. Overall, Coca Cola is very risky where it is right now because it is not showing any
Yoffie, D. B., 2002. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century. HBS No 9-702-442. Boston, MA: Harvard Business School Publishing.
To begin we will examine three ratios for each company. The first ratio is a liquidity ratio. Liquidity focuses on the reliability or availability of a borrower to pay back the loan they borrowed. A common liquidity metric is ccurrent ratio. Current ratio measures a company’s ability to pay back short term obligations or debts. We get this calculation by taking the current assets and dividing by current liabilities. For instance, PepsiCo’s current ratio is equivalent to current assets in 2005 (10,454) divided by current liabilities in 2005(9,406) which equals 1.11:1. Their current ratio in 2004 was 1:28:1. (Current assets for 2004/current liabilities for 2004; 8639/6752). Coca Cola’s current ratio for 2005 was taken by computing their current assets for 2005 (10,250) and divided by the current 2005 liabilities 99836) which equaled a ratio of 1.04:1. In 2004 Coca’ Cola’s current ratio was equal to current assets for 2004 of 12,281 divided by current liabilities for 2004 of 11, 133, which totaled 1.10:1. What this means is that for every dollar of current liabilities, Coca Cola has $1.04 of ...
Coca-Cola and Pepsi are the two greatest competitors in the soft drink industry. A brief introduction and history of the two companies will provide a basis for understanding how the companies have come to be where they are today and how they run their companies. The company structure of each will also be briefly explained to provide an understanding of how management style is impacted.
In the 1980s, under CEO Roberto Goizueta, Coca-Cola was a global brand with a growing presence in global-emerging markets like Europe, Russia, and South East Asia. It beat back its main rival Pepsi to be a leader in the carbonated beverage market with a 70% market share. During the 1990s however, under new CEO M. Douglas Ivester, the company’s market share started declining due to political (regulatory), economic, social (consumer), and technological (operations) challenges in the marketplace.
There are a variety of beverages available to us today with a wide range of differences, some are flavored, carbonated, low calorie, energy boosters, and just plain water. When it comes down to carbonated drinks there are two major rivalry soda companies dominating the market. Coca Cola and Pepsi are two well know cola distributors with very credible history, but the question still remains one is America’s favorite? With the ongoing competition between Coca-Cola and Pepsi, each company is incorporating new strategies for marketing and advertising there brands. When comparing an advertisement from each of the companies, we will review how they appeal to consumers.
Price and advertising strategy: PepsiCo Overhauls Statergy. PepsiCo plans on saving 1.5 billion dollars in...
"Carefully waged competitive struggle" is the description given to the competition between Coke and Pepsi. This industry is worth $48 billion in the US only, this amount will not increase in the future, therefore the Colas wars are heading towards international markets. Coke owns 45% share of the worlds market, 80% was earned abroad in 1993; whereas Pepsi has only 15% share overseas. This urged both companies to use a peaceful warfare to compete which had continued through the nineties.
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
Following this will then take an in depth analysis into the financial position from 2011-2012 with a focus on the operations of 2012, based primarily on the latest annual report provided by CCA. The financial analysis will begin with an overview of the sources of funds obtained to fund operations and investment with a specific focus on reserves held and debt relationships with banks as well as measures of financial risk management used. This will flow into Coca Cola’s major investment decisions and uses of funds throughout the 2011-2012 periods, such as expansion of manufacturing and operations overseas. The report will then continue by relate the matching principle to the use of CCA funds and investment in relation to short and long term investment. The financial analysis will then analyse CCA’s financial performance through the period by analysing it’s profit and loss statement as well as the 2012 balance sheet in relation to the previous period to get an idea of CCA’s current financial position.
Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks?
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.
Summer of 1898, a young pharmacist Caleb Bradham looking for ways to attract people to his pharmacy invented the beverage now known around the world as Pepsi-Cola. After the first advertisement the sales of the new soft drink began to go up. Knowing the importance of good distribution system Pepsi was one of the first to switch from horse drawn transport to motor vehicles. Throughout its existence Pepsi adjusted its marketing strategies trying to keep up with the social and economic conditions of its consumers. During the Great Depression and continuing into the World War II Pepsi emphasized the low prices of the drink knowing that people had narrowed their budgets. In the mid. 1950s the emphasis fell on Pepsi being a lifestyle accompaniment. The breakthrough move by Pepsi was made in the late 1950s to capture the market of new generation of baby boomers. Its best known advertisement slogans such as “You’re in the Pepsi Generation”, “Have a Pepsi day” or “You’ve got a lot to live, Pepsi’s got a lot to give” set a new standard for advertising. To dominate in a soft drink category Pepsi, after 65 years of selling only Pepsi-Cola, introduced new products: “Mountain Dew and Diet Pepsi.” To capture the completely new market of X-ers, throughout 1980s and 1990s Pepsi’s commercials featured superstars, supermodels, actors and sport stars. In the mid. 1980s Pepsi-Cola declared a victory in the cola wars.
This is conducted on financial statements for a single time period only. As with horizontal analysis, it compares items over many time periods. In contrast, vertical analysis only compares many items within the same time period. Likewise, vertical analysis of an income statement or also called a common size statement involves converting each income statement component into a percentage of sales. Additionally, while every item on a balance sheet is expressed as a percentage of total assets held by the company.Moreover, vertical analysis utilizes percentages to compare individual components of financial statements to a key statement figure. Vertical analysis entails changing each income statement element to a percentage of sales. Furthermore, vertical analysis recommends analyzing only one period, however, it can be quite beneficial to compare common size income statements for several