...PepsiCo and Coca-Cola Enterprises Meredith Morrison Strayer University BUS 508 [ December 15, 2010 ] Dr. Ronald Steffel Investors, always looking for the next company they can trust, are hoping to put their money into the hopes that they are achieving growth for the company and their bank accounts. In order to make proper and informed decisions they must understand the financial information reported by companies. This report will be looking at two companies, PepsiCo and Coca-Cola and addressing their current ratios. We will discuss the best company to invest in based on the ratios described. Other non-financial elements that may help investors make a decision will also be discussed. Current ratios describe the relationship between the current assets and their liquidity and the current liabilities a company holds (Loth, R., 2010). This ratio is used as a way to evaluate a company’s ability to pay their current debt (their liabilities). In calculating the current ratio, the current assets are divided by the total current liabilities. Another name for the current ratio is Cash ratio. The Cash ratio states the purpose of the ratio; and many investors and lenders look at the current ratio in order to make financial decisions. PepsiCo’s current assets are $12,571, their current liabilities are $8,756, leaving them with a ratio of 1.436 (PepsiCo.,(2009). Coca-Cola’s current assets are $5,170 and their current liabilities are $4,588, leaving them...
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...Case Study on PepsiCo’s Use of Financial Derivatives 1. Introduction 1.1 PepsiCo’s History The Pepsi-Cola Company was incorporated in 1919 by Caleb Bradham, the inventor of the Pepsi-Cola soft drink. PepsiCo became a multinational beverage and snack food company in 1965 when Pepsi-Cola merged with Frito-Lay. Since the 1965 merger PepsiCo has expanded its operations by acquiring Quaker-Oats, Tropicana, and Gatorade brands. With sales of $66.86 billion in 2014 and with products sold in over 200 countries, PepsiCo is one of the leading food and beverage companies in the world (PepsiCo, 2014). 1.2 PepsiCo’s Industry The beverage and snack food industries are both in the mature stage in their life cycles, and companies in these industries largely depend on product innovation, brand recognition, and low prices to remain competitive. Like all companies PepsiCo faces risk of increases in operating expenses and decreases in net income due to market risk. Companies in PepsiCo’s industry have been forced to expand its product offerings into healthy foods and drinks due to an insurgent health and wellness in American culture. 1.3 PepsiCo’s Competitors PepsiCo’s top competitors consist of The Coca-Cola Company, Dr Pepper Snapple Group, and Nestle; additionally, because PepsiCo is a multinational company it must also compete with countless local snack and beverage companies across the globe. Coca-Cola has been viewed as PepsiCo’s main rival for around 100 years, and the competition...
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...Financial Reporting Problem, Part II ACC/290 University of Phoenix Financial Reporting Problem, Part II PepsiCo is a highly known beverage distributor. The cola started in the late 1800s in a drugstore, and its original name was “Brad’s Drink.” In 1898, cola introduced “Brad’s Drink” to the market. Then, later change the name to Pepsi. It is a large company that has numerous assets and liabilities. Many investors and creditors would be willing to work with this company because they run a good business. Currents assets are very significant to companies like PepsiCo. In the balance sheet, “current assets are assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer. For most businesses, the cut off for classification as current assets is one year from the balance sheet date” (Kimmel, Weygandt, & Kieso, 2011, p. 49). The company can use these assets to support its routine operations. For example, the company can use the assets to pay their current expenses. The common type of current assets consist of cash, marketable securities, inventory, accounts receivable, prepaid expenses and additional liquid assets that the company can quickly convert into cash. However, according to Kimmel, Weygandt, and Kieso, 2011, companies normally arrange their current assets in the order in which they anticipate to convert them into cash. Therefore, the proper order for a company to have its assets listed...
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...PepsiCo EHREN HAYES Dr. Geoffrey Vanderpal GB550 – 02N Kaplan University October 4, 2011 Table of Contents I. Abstract………………………………………………………………………2 II. Meet Pepsico……………………………………………………………….3 III. Capital Structure Issues……………………………………………3-4 IV. Business and Financial Risks……………………………………4-6 V. Growth Opportunities………………………………………………6-7 VI. Modigliani and Miller’s Capital Structure Theory……….…7 VII. Criticisms of the MM Model and Assumptions……………7-8 VIII. PepsiCo’s Capital Structure……………………………………….8-9 IX. Conclusion…………………………………………………………………..9 X. Refrences…………………………………………………………………..10 ABSTRACT The following research will examine the capital structure of Pepsico and how the choices that the company makes affects their return on investment and their risk profile. The traditional theory of capital structure theorizes, “when the Weighted Average Cost of Capital (WACC) is minimized, and the market value of assets are maximized, an optimal structure of capital exists.” Pepsico analyzes their capital structure annually with their Board, including dividend policies and share repurchase activity. Long-term debt and solvency analysis will also be used to examine their capital structure in terms of financing sources and their ability to satisfy long-term debt and investment obligations. A review of Pepsico’s decisions in recent years will be able to help determine some of the reason’s why the company’s return on equity (ROE)...
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...Financial Reporting Problem Part II ACC290 September 16,2013 Financial Reporting Problem Part II Financial Reporting Problem, Part II The PepsiCo is a beverage distributor is known for their soda and other merchandise. The cola company started in the 1800s in a drugstore, and it was named “Brad’s Drink.” In 1898, cola introduced “Brad’s Drink” to the market. After a few years, the name changed to Pepsi. The currents assets are very important to companies like PepsiCo. In the balance sheet, “current assets are assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer. For most businesses, the cut off for classification as current assets is one year from the balance sheet date” (Kimmel, Weygandt, & Kieso, 2011, p. 49). The company can use these assets to support its routine operations. For example, the company can use the assets to pay their current expenses. The common types of current assets consist of cash, marketable securities, inventory, accounts receivable, prepaid expenses, and additional liquid assets that the company can turn in to cash. However, according to Kimmel, Weygandt, and Kieso, 2011, companies normally arrange their current assets in the order in which they anticipate to convert them into cash. Therefore, the proper order for a company to have its assets listed under the current assets is as follows cash, (2) short-term investments (such as short-term U.S. government securities)...
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...your company, it's primary products, markets, subsidiaries, risks, and any special highlights about your assigned corporation. This is also required for the first part of your paper. PepsiCo is a global food and beverage company. Co. makes, markets, sells and distributes a range of foods and beverages. Co. is organized into four business units: PepsiCo Americas Foods, which includes Frito-Lay North America, Quaker Foods North America and all of its Latin American food and snack businesses; PepsiCo Americas Beverages, which includes all of its North American and Latin American beverage businesses; PepsiCo Europe, which includes all beverage, food and snack businesses in Europe and South Africa; and PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa. Co. is also comprised of six segments. What is your assigned corporation's current condition of the 'right-hand' side of the balance sheet in terms of total debt to total equity of the firm? In other words, provide and analyze the debt to equity ratio. Inventory turnover:We can find that the inventoryturnover is decreasing in 2007which mean that the number of changing all the good on theinventory by anther is reduced inthis year.Accounts Receivable Turnover:For sure the financial crisesaffected the company because theAccounts Receivable Turnover hasbeen declined to the lowest levelbecause of the decrease of thenumber of the credit sales and...
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...Financial Analysis Feather Wright XACC 280 Financial Accounting Concepts and Principles Salena Ford September 9, 2011 PepsiCo, Inc. and The Cola-Cola Company are two the of the world’s largest beverage distributors. Both organizations are known worldwide and can be found in almost any store. Even though the organizations are very similar in what they do; they are very different when it comes financial analysis and branding. As you will see in this paper the financial comparison of the two are quiet different. We will look at the vertical analyses and horizontal analyses for each organization for the years of 2004 and 2005. A Horizontal analysis evaluates a series of financial statement data over a period of time. A Vertical analysis evaluates financial statement data by expressing each item as a percentage. I will also go over ways each company could improve their current financial growth through the media and diversity. I will also show you why I think one is a better investment based on the results from the analysis that I have conducted. By the end of this paper you will have a better understanding of each organizations consolidated financial statement and the organizations as a whole. First we will start by comparing the horizontal analysis of assets for both PepsiCo and The Coca-Cola Company. We will use the consolidated balance sheet for each company, and will use the years of 2004 and 2005. The horizontal formula is current year amount...
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...Performing a financial analysis is very useful for any businesses to enhance the knowledge of performances, strengths and stability of their financial. This paper intends to compare and contrast the qualitative and financial statements of the past three years of the Multinational companies of soft drinks, Coca-Cola and PepsiCo. Currently, both companies are business competitors and they highly regard their customer’s base loyalty. To familiarize ourselves with these two successful companies, we have to focus on their differences. Coca-Cola was founded in 1886, nowadays is available in more than 200 countries being the most popular beverage with its 94% worldwide recognition and being world’s third valuable brand. Its headquarters are in Atlanta Georgia and they employ nearly 30,000 individuals around the world. PepsiCo was created in 1893 in North Carolina and is sweeter than coke. PepsiCo is one of the World’s top consumer products company with one of the best valuable trademarks, also available in more than 200 countries worldwide. Coca-Cola and PepsiCo control nearly 40% of the entire beverage market but based on Interbrand’s best global brand 2011, Coca-Cola is world’s third most valuable brand; however PepsiCo is number 25 in the list (Saeidinia M., 2010). Moreover, competitors are catching up. The Coca-Cola company main rival is PepsiCo, being the second in the soft drink industry. Coca cola global products are 100% soft drinks and beverage, while PepsiCo global...
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...I. Case Title: PepsiCo 2005 Case Analysis Our Mission “Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.’ Our Vision "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today." “Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.” Performance with Purpose “At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society – delivering what we call Performance with Purpose. “ “Our approach to superior financial performance is straightforward – drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.” PepsiCo: Products * Pepsi-Cola * Pepsi, Mountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, SOBE, Lipton… * Gatorade * Gatorade Thirst Quencher, Propel Fitness Water, Tiger Woods...
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...Topic: PepsiCo Name: Course: Instructor’s Name: Date: Abstract Over the years the beverage industry in the United States of America has experienced rapid growth. The situation can be attributed to the rapid increase in the number of companies operating in this industry, as well as growth in the country’s population. In essence, Gamble and Thompson state that, out of the globe’s 1.58 trillion US dollars recorded from the beverage industry in 2009, the United States of America market contributed a total of 17 billion US dollars. The top market performers in this industry include PepsiCo, Coca Cola, Rebbull, Living Energy and Hansen Natural Corporation. PepsiCo is one of the principal performers among the companies mentioned above, a situation that is attributed to its large market share, competitive advantage, brand loyalty, as well as enhancement of customer confidence and loyalty. In addition, the company has a variety of products that its provides the US market, a clear indication that it is a success and growth oriented beverage company. Introduction Following the numerous changes taking place in the contemporary society, many people prefer products that they can easily access, products they can afford and product that add value to the well-being. In this regard, various companies and most especially those operating in the food and beverage processing industry in the US have been forced to formulate strategies through which, they can satisfy the demands of their customers...
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...PepsiCo: External Considerations Overview PepsiCo is popularly associated with its flagship product Pepsi Cola. While Pepsi Cola is a sizable portion of PepsiCo’s revenue stream, PepsiCo actually has significant revenue generated from a slew of other products and divisions such as PepsiCo Beverages North America, PepsiCo International, Frito-Lay and Quaker Foods North America (Overview, 2005). PepsiCo’s Pepsi Cola has long been second in market share to Coca-Cola and the competition between Pepsi and Coke has been the stuff of business school legend for many years. However, thanks to a series of strategic acquisitions and market entry moves internationally, PepsiCo as a company has finally overtaken Coke in overall market share and performance: “PEPSICO...has raced ahead of...Coke in overall growth rates. PepsiCo earnings last year surged 18% to $4.2 billion on revenues of $29.3 billion, up 8.5%...Coke's 11.5% earnings growth to...4.4% revenue growth to $22 billion for 2004” (Steiner, 2005, para.2). It could be said that PepsiCo has lost the cola battle but won the overall war with its archrival Coca-Cola Company. PepsiCo has done this by becoming a snack food and beverage Company with operations in more than 200 countries worldwide, over 143,000 employees both national and international and over $4 billion in revenues (PepsiCo, 2004, p.4). Increasingly, PepsiCo, as most other large MNCs have done, is relying on overseas expansion to fuel its future growth and earnings...
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...Sustainability Paper Sustainability Paper PepsiCo is an excellent case in point of demonstrating how sustainability is used to build business longevity. Team-A will assess PepsiCo sustainability initiatives, identify stakeholders, affect of fiscal policies on stakeholders, sustainability achievements, and sustainability breakdowns. PepsiCo sustainability initiatives will be evaluated to industry sustainability standards. Team-A will identify PepsiCo stakeholder relationships and how sustainability policies are applied. Sustainability Defined Sustainability refers to upholding, supporting, or preservation of a particular role or function. Additionally in sustainability most companies commit themselves to the protection of supplies and reserves by keeping people and the environment free of harm. Sustainability defined by Merriam-Webster (2010), “of, relating or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged” (p. 1). As part of the company’s human sustainability PepsiCo produces products safe for human consumption by using ingredients wholesome and promote healthy living. The company values healthy lifestyles and focuses on increasing healthy choices and quality products in its brands. PepsiCo is a large company with a vast resources and an extensive global footprint and has a responsibility to the public and planet that supports them to remain socially and environmentally conscious. Corporate sustainability...
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...the factors that impact consumer behavior have shown that two-thirds of the respondents lean towards the assessment of a firm’s ethical marketing process before making a decision to buy from such a company. Table of Contents Executive summary 2 Introduction 4 An overview and analysis of ethical consumerism 4 Review of Pepsi Co Inc Company 6 Result of the Short Opinion Survey 8 Conclusion 10 Recommendation 10 Reference 11 Appendix 13 Introduction Ethical consumerism is growing in significance influencing customer choices as well as increasing the role played by the social movement in the marketing process (Buechler, 2010, p.13). New unfolding and ethics are pushing customers to participate actively in market participation and also to criticize the market process and retreat from it. This paper will focus on the analysis of factors that influences consumer behavior through an opinion survey conducted among thirteen students at GSM London. The study also focuses on the identification of products deemed to fall within the ethical category. In addition, the paper also analyzes a case study of PepsiCo, with a view to identifying ways in which it applies ethical issues in its business. It focuses on different strategies employed by PepsiCo in order to continue being a socially conscious business...
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...Financial Analysis The purpose of my paper is to make financial comparisons between PepsiCo, Inc., and Coca Cola. I will be using Vertical and Horizontal analysis, and as Ration Analysis to form my opinion. PepsiCo, Inc. and Coca Cola have been a part of American life for so long that both companies are both taken for granted even though PepsiCo, Inc and Coca Cola are both internationally know the public does not know much about the history of the two corporate giants. Because I am doing a financial comparison of the two, I wanted to know a little history of each company. Pepsi Cola and Coca Cola are two of the world’s best known cola distributers. They have both become strong in the international marketplace. A little knowledge about the history of each company is in order. Pepsi Cola was founded in the late 1890s’ by a pharmacist named Caleb Bradham from North Carolina. In 1961 the Frito Company founded in 1932 merged with the H.W. Lay Company, founded in 1932, to form Frito-Lay, Inc. 1965 Frito-Lay and Pepsi-Cols merged to become PepsiCo, (Our History, 2009). In 1886 in Atlanta Georgia John Pemberton, a pharmacist trying to make a new flavor for a fountain drink invented Coca-Cola. A few doors down at Jacobs Pharmacy he added Carbonated water and started selling his drink for five cents a glass. Pemberton’s book keeper wrote the script still used today. Pemberton passed away just two years later and in 1888 businessman Asa Griggs Candler bought the rights and turned Coca-Cola...
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...STRATEGIC MANAGEMENT FINAL PAPER PEPSICO CASE STUDY ANALYSIS LECTURER: Sisdjiatmo K. Widhaningrat Composed by Chalinee Kunkaweeprad (1206323306) Karisma Maharani Anisakusuma (0906490790) Prasya Aninditya (0906532540) Shafa Tasya Kamila (1006663096) UNIVERSITAS INDONESIA DEPOK 2012 1 STATEMENT OF AUTHORSHIP “Kami yang bertandatangan di bawah ini menyatakan bahwa makalah/tugas terlampir adalah murni hasil pekerjaan kami sendiri. Tidak ada pekerjaan orang lain yang kami gunakan tanpa menyebutkan sumbernya. Materi ini tidak/belum pernah disajikan/digunakan sebagai bahan untuk makalah/tugas pada mata ajaran lain kecuali kami menyatakan dengan jelas bahwa kami menyatakan dengan jelas menggunakannya. Kami memahami bahwa tugas yang kami kumpulkan ini dapat diperbanyak dan/atau dikomunikasikan untuk tujuan mendeteksi adanya plagiarisme.” Nama : Chalinee Kunkaweeprad Nama : Kharisma Maharani A. NPM 1206323306 NPM 0906490790 : Tanda Tangan : : Tanda Tangan : Nama : Prasya Aninditya Nama : Shafa Tasya Kamila NPM 0906532540 NPM 1006663096 : Tanda Tangan : : Tanda Tangan : 2 EXECUTIVE SUMMARY This report provides an analysis and evaluation of the Marketing Strategy of PepsiCo. Methods of analysis include the internal and external analysis of the company. The research draws attention to the competition PepsiCo in the Cola and Snacks industry...
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