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Is Pepsi Financially Safe?
PepsiCo is one of the most well known forces in the convenient beverage and food industries, including such brands as Pepsi, Quaker, Frito Lay, Gatorade, and Tropicana (PepsiCo, 2009). Each section of this company has many different items available for sale and can be found at most retail stores across the country, as well as various locations throughout the world. When scanning through the financial statements it appears that this company is strong and operating at full capacity, but after digging a little deeper the appearance of the company does change slightly. From an investment standpoint, the company does pay its shareholders' dividends on a regular basis, but experts within the field only rate this company as a middle level investment opportunity, meaning that investors might want to consider other companies if they want to maximize their funds. The income statement and the balance sheets all look positive, but the cash flow statement shows that this company may be having a few problems.
The most current Statement of Income that was filed in September of 2009 shows that PepsiCo has had a decrease in net revenue since the statement was issued a year before (Morningstar, 2009). On the positive side, though, the operating profits during this year have increased, which means that they are slowly building up to the point where the operating profits exceed the operating costs, allowing them to rely on outside funds less than they have been in the past. By going off of the Statement of Income, a creditor or lender would be more than willing to support this company, and an investor would be able to see that there has been an increase in the cost of stocks, as well as an increase in the dividends paid to the stockholders, so this company may be a good investment.
The Cash Flow Statement filed at the same time also shows good and bad.