...Assignment #5: Financial Management Coca-Cola Company vs. PepsiCo. Rodséy E. Smith Daniel Sersland BUS 508: The Business Enterprise December 9, 2010 Abstract In the late 1800’s two of today’s largest and most recognizable food and beverage companies, PepsiCo and Coca-Cola Company began their quest to dominate the industry. Even today after over a hundred and twenty years, PepsiCo and Coca-Cola Company continue their efforts to compete against each other in order to gain additional market share. The purpose of this paper is to explore the two competing companies from a financial perspective, rather than a product preference. The paper will draw from information given in the 2009 year-end financial report for each of the two companies. From this information, several financial ratios will be computed and an analysis will be given to determine which company is more financially profitable. After a financial analysis is made, the paper will conclude by presenting what non-financial criteria could be considered when choosing which company is the better investment options. Using the current ratio, discuss what conclusions can be made about each company’s ability to pay current liabilities. The current ratio is a popular financial calculating tool used by financial analysts to determine a company’s liquidity, also known as the company’s working capital position. The ratio is determined by deriving the proportion of current assets available to cover the current liabilities...
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...Coca-Cola Company vs PepsiCo, Inc Professor Archie – ACC 305 Sara Griffith...
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...Coca-Cola Company versus PepsiCo, Inc. Anderson Intermediate Accounting 305 February 24, 2013 Coca-Cola Company versus PepsiCo, Inc. Introduction The Coca-Cola Company and PepsiCo are both very large manufacturing corporations that operate worldwide. Over the years, each corporation has had a very longevity of business success. The expansion of business and brands through subsidiaries, partnerships and franchises in beverage and food products has been a consistent growth in retail sales for both corporations. With such growth, they employ thousands of employees worldwide and offer competitive benefits to include medical, life, and retirement. In 2006, both corporation adopted SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Post retirement Plans – and a amendment of FASB Statement No 87, 88 , 106 and 132® (SFAS 158). For this particular paper, the goal will be to complete a comparative analysis of the pension plans that each corporation made available to their employees and retirees. Analysis A pension plan is an employer contributory or non contributory saving plan which can also be qualified and nonqualified that businesses offer to their employees to assist with their retirement. With contributory plans, The employer and the employee make contributions into the savings. Whereas, with noncontributory plans, only the employer is required to make the contributions while the employee’s participation is optional. Under a qualified plan...
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...Stephanie Burke XACC/280 September 19, 2010 Sylvia White Shepherd The purpose for this analysis is to compare PepsiCo to Coca-Cola; this is done by providing a summary of financial accounting information. The information to compare a company to another comes from financial statements and then those numbers are broken down into analysis and ratios. Once the ratios are calculated then the investor can decipher is the company is worth investing in. The information gathered is from the attached financial statements of both companies for the year 2005. Below is a small description of the two companies before comparing them. PepsiCo manufactures or use contract manufacturers for their products. This company markets and sells a variety of salty, sweet and grain-based snacks, carbonated and non-carbonated beverages, and foods through North American and international business divisions (Navigator). Within PepsiCo one can find them merged with Frito-Lay, Tropicana, Quaker, and Gatorade. Coca-Cola manufactures carbonated and non-carbonated beverages. New beverages joined Coca-Cola’s line up, including Minute Maid, Powerade, and Dasani bottled water. Coca-Cola is throughout Northern American and international business divisions. Ratio analysis expresses the relationship among selected items of financial statement data. A ratio expresses the mathematical relationship between one quantity and another. The relationship is expressed in terms of a percentage, a rate, or a simple...
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...|[pic] |Syllabus | | |Axia College/School of Business | | |XACC/280 Version 2 | | |Financial Accounting Concepts and Principles | Copyright © 2010, 2009 by University of Phoenix. All rights reserved. Course Description This course covers the fundamentals of financial accounting as well as the identification, measurement, and reporting of the financial effects of economic events on the enterprise. Financial information is examined from the perspective of effective management decision making with special emphasis on the planning and controlling responsibilities of practicing managers. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning...
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...Coca-Cola vs. Pepsi Co 2 1. Using the current ratio, discuss what conclusions you can make about each company’s ability to pay current liabilities (debt). The current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, PepsiCo has a higher current ratio implying that is more capable of paying its obligations. The debt management policies of Coca-Cola in conjunction with share repurchase program and investment activity resulted in current liabilities exceeding current assets. From the ratio Pepsi Co suddenly had to pay all its short-term creditors, it would be able to do so and have a surplus of 44% of current assets. If Coca-Cola had to pay all its short-term obligations, it would have only 13% surplus of current assets after fully repaying all short term obligations. Therefore, it can be said that PepsiCo is more liquid than Coca Cola based on its current ratio. | Coca-Cola | Pepsi Co. | Current Ratio | 1.13 | 1.44 | 2. Using the profitability ratios, discuss what conclusions you can make about each company’s profits over the past three years. The return on assets ratio is an indicator of how profitable a company is relative to its total assets. Pepsi Co’s return on assets ratio is 14.92, slightly higher than the industry’s Coca-Cola vs. Pepsi Co ...
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...Financial Statement Analysis Project Outline Compare & Contrast Coca-Cola vs. PepsiCo Financial Analysis Income Statement vs Cash Flow Accounts with greatest difference Evaluation of Fiscal Period Profitability Liquidity Leverage Financial Reporting Practices Methods for Accounting Coca-Cola Pepsi Company Disclosures Compare & Contrast Clarity & Completeness Critical Analysis Decision Investment Equity Investor Coca-Cola Company verses PepsiCo Critical Analysis of Investment The three financial statements required for external reports are the income statement, balance sheet, and statement of cash flows. The statement of cash flow highlights the major activities that impact cash flows, which affect the overall cash balance (Garrison, Noreen & Brewer, 2012). Equity investors utilize these financial statements for a critical analysis of the firm’s financial stability before making an investment. Based on a comparison of the income statements to the statements of cash flows for Coca-Cola and PepsiCo, the following accounts report the greatest differences between net income and cash flow from operations. Coca-Cola Company 2010 2009 2008 * Gain from Sale of Asset $(5,358) $(43) $(130) * Income of Equity Investments (671) (359) 1,128 * Change in Accounts Payable 656 319 (576) * Change in Other Working Capital (161) (510) (41) PepsiCo 2010 2009 2008 * Income on Equity Investment $(916) ...
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...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 is both 48% snacks and 52% beverage corporation. PepsiCo contains more sugar and caffeine than Coca-Cola; each can of Pepsi contain approximately 8 teaspoons of sugar so if consumer’s need sugar and energy, PepsiCo appropriate better fit. According to studies, in December 2005, PepsiCo surpassed...
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...SIZER COMPETITIVE STRATEGIES : PEPSICO VS. COCA-COLA AKIN DUNDAR 200068711 MBA/FINANCE 1/30/2013 Every company has a descripted or non-descripted competitive strategy if they have at least a competitor in the industry. To have the conversion rate of the investment, the company should have a desired and defensible position and power to defence this position. Sometimes, even a company has a really successful product it still tries to produce a new item or improve the one it has and this decision could be one of the biggest fail of marketing history. According to some marketing experts; the reason of the success of coke drink in the beverage industry is the advertisement competition and marketing war between PepsiCo and Coca-Cola since years ago. If there was not a PepsiCo in the industry, Coca-Cola could not make a billion bottles of daily sales. Both companies are in top of the list of most valuable brands list. They had many successes during their 120 years of rivalry but both of them also made high-cost mistakes during that time. The competition between the ‘Enemy Brothers’ is one of the good sample of rivalry which is based on a lot of interesting cases,different strategies and cultures. Differences between Coca-Cola and PepsiCo cultures and strategies was the main result announcer. In the middle of 1880’s, Coca-Cola was unrivaled in the industry. When the industrial war begun, was the time that PepsiCo showed up in the industry. There were...
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...Investment Analysis for Pepsi versus Coca Cola ACC557 – Financial Accounting December 13, 2012 Company Synopsis Pepsi Cola | Coca-Cola | The Pepsi Bottling Group, Inc. (PBG) is the world's largest manufacturer, seller, and distributor of Pepsi-Cola beverages. Separated from parent PepsiCo, Inc. in 1999, it accounted that year for 55 percent of Pepsi-Cola beverages sold in the United States and 32 percent worldwide. The company delivers its products directly to stores without using wholesalers or other middlemen. In addition to its extensive production and distribution facilities, PBG leases and operates about 20,000 vehicles and owns more than 1.1 million soft drink dispensing and vending machines. PepsiCo holds a controlling interest in the firm. | The Coca Cola history extends back to 1885, when John Pemberton invented the original recipe for a new cocawine. Pemberton developed Coca-Cola, a non-alcoholic version of his original cocawine, when Fulton County passed prohibition legislation. Carbonated water was added later by accident when Pemberton was mixing drinks for a friend and incidentally included it. His friends loved the new taste, so he altered the original formula to incorporate it. | Pepsi - International Directory of Company Histories, Vol. 40. St. James Press, 2001. (http://www.fundinguniverse.com/company-histories/the-pepsi-bottling-group-inc-history/). Major Suppliers Pepsi Cola | Coca-Cola | PolandEgyptUnited Arab EmiratesCanada | Poland...
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...companies Pepsi Cola and Frito Lay by Donald M. Kendall, President and Chief Executive Officer of Pepsi-Cola and Herman W. Lay, Chairman and Chief Executive Officer of Frito-Lay. Pepsi was originally founded in 1898 by Caleb Bradham, a New Bern, North Carolina, druggist, who first formulated Pepsi-Cola. Today, Pepsi is part of a portfolio of drinks that includes carbonated and non-carbonated drinks such as soft drinks, juices and juice drinks, ready-to-drink teas and coffee drinks, isotonic sports drinks, bottled water and enhanced waters. PepsiCo operates in four major fields. These fields include: PepsiCo Americas Beverages, PepsiCo Americas Foods, based in America PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. The Pepsi-Cola Company is the world’s second largest beverage company. Pepsi-Cola beverages are available in about 170 countries. The product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Dr. John Stith Pemberton, a local pharmacist, produced the syrup for Coca-Cola, and carried a jug of the new product down the street to Jacobs' Pharmacy, where it was sampled, pronounced "excellent" and placed on sale for five cents a glass as a soda fountain drink. Carbonated water was teamed with the new syrup to produce a drink that was at once "Delicious and Refreshing," a theme that continues to echo today wherever Coca-Cola is enjoyed. The company markets its beverages under various brand names, including Coca-Cola, Diet Coke...
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...Running head: COCA-COLA AND PEPSICO Coca-Cola and PepsiCo: Similarities and Differences Lamar Smith Michel Brown Annette Pete May Valencia Cardinal Stritch University MGT 426 August 18, 2011 Submitted to the faculty of Cardinal Stritch University in partial fulfillment of the requirements for the degree of Bachelor of Science in Management. Introduction Two of the largest and most profitable corporations in the United States are the Atlanta, Georgia based Coca-Cola Company and the New York based Pepsi Cola Company. While both are called "colas" they both attempt to address the same target tastes but from different approaches. Coke was the first on market with what is still a "secret" formula and Pepsi followed with a similar (not exact) taste. Since taste is very much a factor of your personal likes, either or neither may appeal to you or seem sweeter (Inforefuge.com. 2011). This paper will discuss the similarities and differences in the processes used by Coca-Cola and PepsiCo for place, price, and promotion. Place and Price The marketing exposure of PepsiCo and Coca-Cola is everywhere ranging from commercials, billboards, and mail advertisements all over the world. Although they target the same markets, they both use different approaches to their marketing strategies. This is evident when comparing the two companies’ websites. When browsing the Coca-Cola website you will experience a more conservative style; there is...
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...Amidst Slowdown .............................. 1 Competition Between Coca-Cola and PepsiCo Becomes More Aggressive ............................. 1 Modern Retailers Gain Further Popularity ................................................................................ 1 Sustained Sales Likely To Record Steady Growth in Sales ...................................................... 1 Key Trends and Developments .................................................................................................... 2 Manufacturers Focus on Introducing New Flavours.................................................................. 2 Celebrity Endorsements Remain As Popular Promotional Tool ................................................ 2 Modern Retail Gains Further Popularity.................................................................................... 2 East and Northeast India .......................................................................................................... 3 North India ................................................................................................................................ 4 South India ............................................................................................................................... 5 West India ................................................................................................................................. 6 Rural Vs Urban Key Trends and...
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...specific factors to help Pepsi evaluate how well the product is received by consumers in the marketplace. This analysis is based on our competitor Coca-Cola as a comparison to our product. A brief history is discussed with a look at the demand, supply, and equilibrium prices in the market. Other elements discussed are price elasticity and cost structure, and recommendations made on how to maximize our profits and successfully compete with Coca-Cola. History The original Coca-Cola product is introduced and developed in 1886 by John S. Pemberton (Bhasin, 2013). In the next 15 years Coca-Cola is purchased and incorporated into a business by Asa Candler, and they had their first celebrity endorser musician Hilda Clark (Bhasin, 2013). Coca-Cola began to move into other foreign markets by 1906 and branched out to athletes for their endorsement of Coca-Cola. Coca-Cola was the first to manufacture a contoured glass bottle for their product, and launch production plants in the Philippines and Europe. Between 1906 and 1938 Coca-Cola had entered into numerous foreign markets including Canada, Cuba, Australia, Norway, and South Africa. By 1950 Coca-Cola was entering homes of consumers through the airwaves broadcasting a commercial on Thanksgiving Day to the radio airwaves to promote their product to consumers. Over the next 60 years Coca-Cola has continued to change their image to consumers and grow their product base to remain fresh and relevant while providing a quality product. Some...
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...The Coca-Cola Company vs. PepsiCo, Inc. ------------------------------------------------- Week 7 - Writing Assignment Carmen Y Velazquez Professor: Reza Rafi ACC 305004VA016-1118-001 November 18, 2011 The Coca-Cola Company vs. PepsiCo, Inc. ------------------------------------------------- Week 7 - Writing Assignment Carmen Y Velazquez Professor: Reza Rafi ACC 305004VA016-1118-001 November 18, 2011 1. Compare the pension plans of Coca-Cola and PepsiCo, including type of plan and funded status at 2007 year-end. Coca Cola has the defined contribution plan that includes all U.S. employees and some international employees, which are funded in accordance with local laws and income tax regulations. This is a plan that both, the employer and the employee make contributions. Coca-Cola match 100% of participants’ contribution up to a maximum of 3% of compensation and this plan offers significant tax benefits for the contributions made by the employer. In addition, Coca Cola also has a defined benefit...
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