...The Coca-Cola Company July 24, 2011 CONTENTS Abstract……………………………………………………………………………………………3 Coca-Cola: An Introduction.……………………………………………………………………....4 Financial Analysis………………..……………………………………………………………..…6 Competition Analysis: Pepsi………………………………………………………………………9 Recommendations………………………………………………………………………………..13 Conclusion…………………………………………………………………………………….…15 References………………………………………………………………………………………..16 Abstract Many international corporations began as small domestic ventures. As businesses grew, corporations saw the many possibilities brought on by expanding operations. Companies began to expand by opening franchises in various cities, yet they knew there was more potential for success if they were to expand their operations even further. Thousands of companies, such as Coca-Cola, chose cities internationally to gain more revenue. The purpose of a corporation is to maximize profits for all shareholders involved. Opening firms abroad allowed Coca-Cola to gain worldwide recognition, which gave them a competitive advantage over other soft drink makers. Now, Cola-Cola is not only recognized, but it is one of the most consumed soft drinks both within the United States and in cities across the globe. Coca-Cola took a huge risk in expanding their operations. However, their success proves that multinational corporations need to choose the right market to venture into and choose marketing techniques that appeal to their consumers. Coca-Cola: An Introduction In 1866...
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...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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...Valuation and Assessment for the PepsiCo Part1. Macro economic factors and Industry Analysis In recent year, PepsiCo was in the extraordinary complicated economic environment. Economic environment can have a significant impact on PepsiCo. The economic factors such as Gross Domestic Product (GDP), interest rates, high inflation rate and commodity price may affect the PepsiCo current and future performance in large extend. First, the increase of GDP affects the sales of PepsiCo. Pepsi is the world second largest food and beverage business, which sold products in more than 200 countries. In America, the GDP presents a slowly but stable increasing trend, the GDP growth rates were affected, and also influenced the sales of Pepsi America. According to the table 1, it can be seen that the core net revenue has increased 14 percent between 2010 and 2011. In addition, it was estimated that approximately 47 percent net revenue comes from outside the United States. Although most developing countries were suffered from global financial crisis, the GDP growth rates still keep a robust trend. For example, in China, the GDP growth was around 9.5 percent during 2010 to 2012. Therefore, PepsiCo in 2010, the revenue outside the America increased approximately 30 percent, which considerable above the global real GDP growth rate. Secondly, the increase of inflation will affect the profits of PepsiCo. The whole world’s inflation rates have increased in recent year and will continually rise...
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...BUS 508 Week 5 Assignment Financial Management (Pepsi and Coca Cola) To Buy This material Click below link http://www.uoptutors.com/BUS-508/BUS-508-Assignment-5-Financial-Management-Pepsi-and-Coca-Cola BUS 508 Week 5 Assignment Financial Management (Pepsi and Coca Cola) Long time competitors in the soft drink industry, PepsiCo and Coca-Cola continue efforts to gain additional market share. Which do you prefer, Coke or Pepsi? Let’s take a look at these two companies from a financial perspective rather than our drink preference. To learn more about PepsiCo and Coca-Cola Enterprises, download the PepsiCo 2009 Annual Report at: http://www.pepsico.com/annual09/ and the Coca-Cola 2009 Annual Report at:http://www.cce2009annualreport.com/. Review the annual reports for general information. Required: 1. Read Understanding the Income Statement at:http://www.investopedia.com/articles/04/022504.asp 2. Read Reading the Balance Sheet at:http://www.investopedia.com/articles/04/031004.asp 3. Compute the following financial ratios for both companies and provide as an appendix to the required paper. If you need help understanding the meaning of the ratios or how to they are computed, go to:http://www.investopedia.com/university/ratios/ Liquidity measurement ratio: • Current ratio Profitability indicator ratios: • Return on assets • Return on equity Debt ratio: • Debt ratio Operating performance ratio: • Fixed asset turnover ratio Cash flow indicator...
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...Based on the liability analysis of both Coca-Cola and PepsiCo, Coke is better suited to pay their current and long-term liabilities (Coca-Cola Enterprises, Inc, 2009). Pepsi’s total current assets in year 2009 were $39,848 million and their total liabilities were $22,406, which nets a $1.77; giving Pepsi a 1.77 to 1 current debt to asset ratio (Pepsico, 2009). This ratio is not totally out of the norm, since a 2 to 1 ratio is acceptable. Coke’s total current assets in year 2009 were $21,579 and their current liabilities were $18,508, which net a $1.16; giving coke a 1.16 to 1 ratio. This ratio is below the acceptable target of 2 to 1 ratio. However, Coca-Cola Enterprises, Inc. is the largest marketer, producer, and distributor of nonalcoholic beverages in the world. Coca Cola markets, produces, and distributes products to customers and consumers through licensed territories in 46 of the 50 states, the District of Columbia, the US Virgin Islands, and certain other Caribbean islands and the 10 provinces of Canada (Coca-Cola Enterprises, Inc, 2009). Additionally, Coca Cola is the sole licensed bottler for products of the Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, and the Netherlands, referred to as Europe (Coca-Cola Enterprises, Inc, 2009). Coca Cola operates in the highly competitive beverage industry and face strong competition from other general and specialty beverage companies. Coca Cola financial results, like other beverage companies...
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...Christine Worth MBA515 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...
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...Financial Management BUS 508 Financial Management Action 1 Using current ratios gives companies the means to see if the assets can turn to cash to pay their debts. One of the main issues with using current ratio is a false since of working capital (the excess of current assets over current liabilities). This happens because the assets in a company may not liquefy fast enough to pay off the debt when it is due. So this gives a false working capital, which can show as a positive, when this reading is of assets that have not been liquidated yet. If a company cannot liquidate its assets into cash, they will not be able to pay their debts or issue dividends to stock holders. It is always good to have some cash on hand and not tied up in inventories and investments. Keeping this concept in mind will give you the capability to pay payrolls, debts, and daily expenses needed to run the company. Action 2 Using the profitability ratios of the last two years shows that both Pepsi and Coke Cola had a decrease in profits between the 2008 and 2009. Pepsi had better sales profit then Coke Cola in both years. With this information Pepsi’s management is doing a better job at employing the company’s total assets to make profit (Loth, Financial Ratios:). Action 3 Due to that I can’t seem to get my numbers to calculate correctly, I am going to do estimation from what information that I can find. Having a good cash flow, show that you can pay your debts without barrowing...
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...Financial Management Instructor: Dr. Daniel Frost The Business Enterprise – BUS508 Strayer University June 12, 2011 Based on your analysis, determine which company is better able to pay current liabilities (debt). Explain your rationale. Based on the analysis of Pepsi Co and Coca Cola Enterprise the company that would be better able to pay current liabilities would be Pepsi Co. The company had retail sales of $108 billion in the year of 2009. In previous years, Coca-Cola would be better to pay current liabilities however the company suffered huge losses in the year of 2008. Pepsi Co has nineteen mega brands that provide revenues in several different markets. Coca Cola has five brands per geographic area. Coca Cola is a large organization that is present in numerous countries around the world. Pepsi Co seems to be better to pay liabilities based upon the several different brands the company provides. If there was an analysis based upon the year of 2010 Coca Cola Enterprise would be better able to pay current liabilities. The company sold $25.5 billion unit cases in 2010 versus the $24 billion in 2009. Coca Cola also had a 13% increase in gross profit and operating revenue. (Coca-Cola, 2011) Pepsi Co in the year 2010 also experienced steady growth in revenue and 12% growth of earnings per share. Pepsi Co continued to deliver top tier financial returns in the year 2010. Pepsi Co Americas Foods provided the largest operating profit of 53% in the year...
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...COCA-COLA BUSINESS ANALYSIS PART II Angel Hale Mgt/521 Coca-Cola Business Analysis Part II This paper will take a look at the financial health of the Coca-Cola Company in comparison to two of their competitors Pepsico & Nestle. As a potential investor, this information will help provide insight on the option to move forward, while looking at technological advantages and globalization effects on the company. At the end of this paper, you will be one step closer to deciding if the Coca-Cola company’s practices, financial & operational findings are in line with a potential investor’s requirement. It has often been said that business is about finding and exploiting advantages and the goal of any business is to maximize profits. As we look into the Coca-Cola Company as a potential investor some of the things to consider are: assets and liabilities, company track record, market position and future potential within the respective market. In general an investor wants to know how attractive current assets and future projects are in order to gauge how successful they may be. One of the first items to look into will be the financial standings for the company, not only will we review the current 2011 annual report, with regards to the balance sheet, cash flow and income statements. In order to understand how efficient the company is, we will also show the comparison between two other competitors within the same niche market: Pepsico & Nestle (see exhibits A, B & C)...
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...Introduction…………………………………………………………4 II Basic information about PepsiCo…………………………………4 2.1 Background PepsiCo……………………………………………..4 2.2 First step for entering international market………………………5 III Development of PepsiCo…………………………………………5 3.1 Business structure of PepsiCo…………………………………..5 3.2 Organization’s expansion ……………………………………….6 IV Products of PepsiCo………………………………………………6 4.1 Process of bringing a new product to market……………………6 4.2 Production Unit and its global position………………………….7 4.3 Influence of local market criteria ……………………………….8 4.4 Pricing and distribution policies and logistics…………………..8 4.5 Marketing of products…………………………………………..10 V Personnel of PepsiCo…………………………………………..…10 5.1 Recruitment policy………………………………………………10 5.2 Global salaries…………………………………………………..11 5.3 Labor relations…………………………………………………..11 VI Finance of company……………………………………………..13 6.1 Financial structure ………………………………………………13 6.2 Exchange rate ……………………………………………………13 6.3 Annual accounts …………………………………………………13 6.4 Influences of Financial information……………………………..13 VII Conclusion……………………………………………………….15 VIII Reference ……………………………………………………….16 IX Appendix……………………………………………………………17 Appendix I…………………………………………………………….17 Appendix II………………………………………………………….18 I Introduction The aim of this report is for outcome two to outcome five of Global business organization. This report is written base on situation of PepsiCo. The main purpose of this report is to understand how make the concepts of global...
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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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...Atlanta, Georgia, John Pemberton developed Coca-Cola, a non-alcoholic version of French Wine Coca. The first sales were at Jacob’s Pharmacy in Atlanta, Georgia, on May 8, 1886. It was first sold as a patent medicine for five cents a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for your health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, headache, and impotence. When launched Coca-Cola’s two ingredients were cocaine and caffeine. The cocaine was derived from the coa leaf and the caffeine from kola nut, leading to the name Coca-Cola. Pemberton called for five ounces of coca leaf per gallon of syrup, a significant dose; in 1891, Candler claimed his formula contained only a tenth of this amount. Coca-Cola did once contain an estimated nine miiligrams of cocaine per glass, but in 1903 it was removed. After 1904, instead of using fresh leaves, Coca-Cola started using “spent” leaves –leftovers of the cocaine extraction process with cocaine trace elevels left over at a molecular level. Today, Coca-Cola uses as an ingredient a cocaine free extract prepared at a Stepan Company in Maywood, New Jersey. In the USA, Stepan Company is the only manufacturing plant authorized by the Federal Government toimprort and process the coca plant, which it obtains mainly from Peru, and Bolivia. Besides producing the coa flavoring for Cac-Cola, Stephan Company extracts cocaine from...
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...CHU HAI COLLEGE OF HIGHER EDUCATION 2010-2011 SEMESTER 2 BBA 353 STRATEGIC MANAGEMENT Group Case Study Project The Coca-Cola Company Tsang Hoi Ki Chan Ho Yin Fung Tsun Wai Chan Ka Po Yuen Sze Wing Chan Tai Hoi Yan Yue Kan (200826001H, (200826002H, (200826004H, (200826019H, (200826020H, (200826027H, (200926024E, FNE) FNE) FNE) FNE) FNE) FNE) FNE) Abstract This paper is a strategic analysis of The Coca-Cola Company (Coca-Cola), a leader in the beverage industry. Coca-Cola, the world’s leading soft drink maker, operates in more than 200 countries and owns or licenses more than 500 brands of nonalcoholic beverages. The company faces challenges in today’s market because of market changes, socio-economic changes and globalization. An external analysis of the soft drink industry is performed to understand the impact of environment. An internal analysis of Coca-Cola is performed to understand the internal capabilities. The conclusion of this case study emphasizes that the company needs to reduce its dependence on carbonated beverage and diversify its product portfolio into the noncarbonated sector to remain competitive. 2 Table of Contents Abstract .............................................................................................................................. 2 Section 1: Introduction ................................................................................................... 5 1.1 1.2 1.3 Mission and Objectives ..........
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...International Finance Paper FIN/419 International Finance Paper Pepsico is one of the truly global organizations in the world with presence in many countries and offering products which are not only unique but carry a great brand value . Since Pepsi Co works in a global environment therefore its strategy is also global and focuses on achieving the strategic objectives of the firm with great greater emphasis on creating a unique set of strategies which are as applicable as they are in one country . Pepsico universally acknowledged as one of the world’s most successful companies of consumer products. Enormous awards have gone in the worlds. In 2009, Pepsico is ranked 175 in the Fortune’s. 18 brands out of its series boast an annual sales volume of over 1 billion USD, including Pepsi-Cola, Mountain Dew, Gatorade, Lay’s, Diet Pepsi, Tropicana, Doritos, Lipton Teas, Quaker Cereals, Cheetos, 7-UP, Ruffles, Aquafina, Mirinda, Tostitos, Sierra Mist, Walkers, Fritos. In addition, PepsiCo entered new markets including Japan and Eastern Europe. However, the company also had its share of crucial missteps – principal of which was entering into the fast food industry. With the purchase of Pizza Hut, Kentucky Fried Chicken and Taco Bell, PepsiCo was well on its way to building a proverbial three-legged stool. The CEO at the time, Wayne Callaway, believed that this new structure would bring the company success and referred to the three legs of the stool as being snack foods, soft drinks...
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...CHU HAI COLLEGE OF HIGHER EDUCATION 2010-2011 SEMESTER 2 BBA 353 STRATEGIC MANAGEMENT Group Case Study Project The Coca-Cola Company Tsang Hoi Ki Chan Ho Yin Fung Tsun Wai Chan Ka Po Yuen Sze Wing Chan Tai Hoi Yan Yue Kan (200826001H, (200826002H, (200826004H, (200826019H, (200826020H, (200826027H, (200926024E, FNE) FNE) FNE) FNE) FNE) FNE) FNE) Abstract This paper is a strategic analysis of The Coca-Cola Company (Coca-Cola), a leader in the beverage industry. Coca-Cola, the world’s leading soft drink maker, operates in more than 200 countries and owns or licenses more than 500 brands of nonalcoholic beverages. The company faces challenges in today’s market because of market changes, socio-economic changes and globalization. An external analysis of the soft drink industry is performed to understand the impact of environment. An internal analysis of Coca-Cola is performed to understand the internal capabilities. The conclusion of this case study emphasizes that the company needs to reduce its dependence on carbonated beverage and diversify its product portfolio into the noncarbonated sector to remain competitive. 2 Table of Contents Abstract .............................................................................................................................. 2 Section 1: Introduction ................................................................................................... 5 1.1 1.2 1.3 Mission and Objectives ..........
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