With any financial statement it is important to note, when comparing and contrasting differences between the financial highlights page which is usually located among the first few pages. This statement when juxtaposed with the competitor will usually highlight areas in which both are strong which leaves plenty of leg work to be done with the rest of the un-flaunted information. In this case they are both quite healthy but the highlights are still indicative of certain information if one chooses to investigate further. When one wants only to highlight their strengths, it is obvious that certain information is omitted and other exaggerated. This is true with any company that wishes to gain shareholders and is common practice with organizations that after completing their financial calculations, turn the project over to human resources to enhance the beauty of the package.
Coca-Cola’s current ratio, which “is a widely used measure for evaluating a company’s liquidity and short-term debt-paying ability”, dropped from 1.1:1 in 2004 to 1.04:1 in 2005. (Wegandt, Kimmel, & Kieso, 2008 p 707) This indicates a slight drop in Coca-Cola’s liquidity...
... middle of paper ...
...ng the numbers one concludes that both companies are healthy although Coca-Cola outperforms its competitor in countless areas. Access to ten years of financial statements from both companies would give a more comprehensive analysis of the current status of Coca-Cola and PepsiCo. PepsiCo and Coca-Cola seem to use different methodology for determining the source of funds for investment, pay outs to shareholders, and debt obligations. This difference reflects the different styles that each accounting and financial department prefers and does not make one method better than the other. If I had to choose between investing in Coca-Cola or PepsiCo based on the financial analyses from 2004 and 2005 I would choose Coca-Cola without a doubt.
Weygandt, Kimmel, and Kieso (2008). Financial Accounting: A Focus on Fundamentals. John Wiley and Sons Inc.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- PepsiCo and Coca-Cola are fierce competitors and according to their financial statements they are both healthy companies. Therefore I would invest in Coca-Cola if I had to make the decision because it has higher income, a stronger long-term debt to networking capital ratio, steadily rising net income per common share, and a climbing and high solvency ratio. PepsiCo still shows healthy growth and outperforms 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 one is worth the investment.... [tags: Business Analysis]
1955 words (5.6 pages)
- 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.... [tags: Financial Analysis, Financials, economics, ]
1757 words (5 pages)
- 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.... [tags: Pepsi, Coke, business,]
1706 words (4.9 pages)
- 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. First, let's take a look at Pepsi Co.... [tags: business, financial]
1829 words (5.2 pages)
- Together both PepsiCo and Coca Cola are both companies that are known around the world for their goods. For decades now, these companies have been competitive against each other to “do better than” the other one, what some would call the “cola wars”. They individually offer a assortment of soft drinks; regular, diet, caffeine free and many other options for the public to choose from. Both of the companies also have quite a few different entities (or off springs) of their company, such as bottled water, energy drinks, and juices.... [tags: Business Analysis ]
1805 words (5.2 pages)
- We researched Coke and Pepsi as was requested to see which one would be a better investment over the other. One of the ways to see how a company is doing is to look at how much (EVA) Economic Value Added that company is producing. EVA is a way of measuring an operation’s real profitability. EVA is better than conventional ways because it takes into account the total cost of the operating capital. EVA is simply the after-tax operating profit minus the total annual cost of capital. Using EVA has advantages as well as disadvantages.... [tags: Coke Pepsi Comparison Analysis]
1049 words (3 pages)
- Coca-Cola Corporation and its Competitors Coca-Cola was discovered as a result of an accident. In 1886 a pharmacist named John Pemberton cooked up medicinal syrup. When he was done, he figured he had created a fine tonic for people who were tired, nervous, or plagued with sore teeth. He and his assistant mixed it with ice water, sipped it, and proclaimed it tasty. They wanted some more, and the assistant accidentally used carbonated water to mix the second batch. Instead of medicine, these men had created a fizzy beverage - one that is now consumed around the world.... [tags: Invention of Coca Cola]
2367 words (6.8 pages)
- Since the mid 1980’s many of us have become familiar with the terms “the Cola Wars” (Wikipedia, 2010). Coca Cola and Pepsi have been the two largest soft drink competitors in the world for quite some time now. What makes these companies successful. What gives them the retention to prosper for years across the globe. For this project I analyzed the financial statements from 2003 through 2005 of both companies to gain insight as to these questions and others. By reviewing and then analyzing the data it becomes visible that these two companies are still standing strong in a market that is still dominated only by each other.... [tags: Business Analysis]
1835 words (5.2 pages)
- In the global consumer consumption of soft drinks, two global leaders that need no introduction to young and old, are Coca Cola and PepsiCo Inc. However, these cola drinks are also called "Pop" or "soda" most people just order Coke or Pepsi, please. For over the past 100 years both companies have competed against each other to bring a new twist to the consumer, by introducing new soft drink, offer public taste test to the consumer and doing the unthinkable as Coke tried to change the core formula.... [tags: Business Analysis]
1812 words (5.2 pages)
- Current Strategic and Financial Analysis Introduction: A SWOT analysis for Coke and Pepsi will cover the following: The company’s strengths and competitive advantages over the other; The weaknesses of external and internal factors leading towards a decline in revenue sales; Opportunities to buy into and make risky business decisions of either entering new markets or acquiring another company; Threats to the market and legal cases that each company faces. Coca-Cola Strengths: • Today Coca-Cola controls 42% of the soft drink market.... [tags: Current Strategic and Financial Analysis]
1744 words (5 pages)