...is 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...
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...Desiree’ Pressley September 12, 2015 MBA620: Accounting for Decision Makers Summary of the major capital investments made by PepsiCo and The Coca Cola Company In 2014, purchases of investments for The Coca Cola Company were $17,800 million and proceeds from disposals of investments were $12,986 million. This activity resulted in a net cash outflow of $4,814 million during 2014. The purchases during the year ended December 31, 2014 include The Coca Cola Company investment in Keurig, partially offset by the net purchases and proceeds of our short-term investments, that were made as part of the Company’s overall cash management strategy. In 2014, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $389 million, which primarily included a joint investment with one of our bottling partners in a dairy company in Ecuador. None of the Company’s other acquisitions or investments were individually significant. (The Coca Cola Company, 2015) The Coca Cola Company purchases of property, plant and equipment net of disposals for the years ended December 31, 2014 is 2,406 million. In 2014, other investing activities were primarily related to loans to Fairlife, LLC, a value-added dairy joint venture, as well as local investments in Argentina. (The Coca Cola Company, 2015) To meet this growing demand, PepsiCo plans to continue to grow their portfolio of more nutritious products as well as to reduce added sugar, sodium and saturated fat...
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...PEPSICO a Solid Investment. By: Alexandra Fell For: Dr. Guendo0 Yorkville University July 2014 BUSI 1023 A pharmacist named Caleb Bradham invented Pepsi in 1893, it was originally named “Brad’s Drink”, before changing to it’s widely recognized name Pepsi-Cola, in 1898. Although Pepsi has faced many tough financial times historically, two bankruptcies and three offers to Coca-Cola to purchase the company between 1922-1933, the company has always managed to reinvent itself, and carve out its own market share, and today is not any different. In order for PepsiCo to see continued success they must be able to expand into different markets, increasing their consumer base and maximizing profits. PepsiCo is broken down into these four operating units: PepsiCo Americas Foods, which includes food and snack businesses in North America and Latin America. PepsiCo Americas Beverages, which includes all of their North American and Latin American beverage businesses. PepsiCo Europe. PepsiCo Asia, Middle East and Africa. PepsiCo’s main competitors in the non-alcoholic beverage industry are the Coca-Cola Company and Dr. Pepper Snapple Group Inc, their main competitor and long time rival is Coca-Cola. Coca-Cola has the larger market share of carbonated soda drinks, however; PepsiCo holds strong with its larger market share in liquid refreshment beverages like Gatorade and Tropicana. PepsiCo also has a leadership position in the snack industry world wide, against other food and...
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...which company is more likely to satisfy it stockholders. I will provide rational for determining which company is a better investment from a financial and a non-financial base. Financial Management PepsiCo and Coca-Cola have been long time competitors in the soft drink industry. Both are fortune 500 companies that have expanded to a broader range of food and beverage brands. Coca-Cola was created in 1886 by Atlanta GA. Pharmacist John Pemberton. Coca-Cola was originally intended as a patent medicine. Coca-Cola was bough by businessman Asa Griggs Candler whose perceptive business tactics led Coca-Cola to dominance throughout the 20th century. Pepsi was created in 1898 by Newbern, NC Pharmacist and industrialist, Caleb Bradham. As Pepsi grew in popularity, the Pepsi-Cola company was formed in 1902 and incorporated in the state of Delaware in 1919. 1.) Using the current ratio, discuss what conclusions you can make about each company’s ability to pay current liabilities. PepsiCo and Coca-Cola are forced to search for alternative sources of revenue to continue growth due to the United States tight market. Over the last few years, Coca Cola’s stock has out performed PepsiCo. PepsiCo has since expanded by breaking into the snack food market called PepsiCo American Foods. They have products such as Tostitos and Frito-Lay. The snack operations in North America to South America hold 71 percent of the company’s net revenue Europe holds 16...
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...191951 | 2/15/2013 | | SWOT Analysis of Pepsi Company The Pepsi Company or PepsiCo is a global corporation which manufactures, distributes and markets beverages, snacks and other products. When looking at the net revenue of all the beverage and food companies worldwide, the PepsiCo ranks as the second. However, when compared to only those food and beverage companies within the United States, the PepsiCo is number one. Just in the 2009 alone, PepsiCo's revenue on just 19 of their products brought in over $1 billion each in revenue. (www. mba-posts.blogspot.com) Just reviewing their revenue statements and reading their mission statement “At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.” (www.pepsico.com) one can clearly see the PepsiCo Corporation is not only looking out for their customers, but the way they manage their strategy is definitely working for them. Strengths * Ranked at #1 in the United States of America * 19 of PepsiCo’s products achieved over $1 billion in revenue each. * Offers wide variety of nationally known products from soft drinks to snacks * In retail sales alone PepsiCo as a daily revenue of over $300 million a day * The PepsiCo potato chip called “Banner Sun” has an annual retail sale of over $10 billion * Unlike its competitors, PepsiCo is the only food and beverage company that offers a variety of restaurants in all parts...
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...Talent Development at PepsiCo PepsiCo is the world’s leader in convenient snacks, food and beverages. Founded in 1965 with a merger of Pepsi-Cola and Frito-Lay has delivered significant and consistent business growth over the past 40 years. Growth is the first component of PepsiCo’s corporate values statement and is the core of the business strategy. With sustainable competitive advantages and successful talent, management in developing leaders and employees contributes to the success of talent management. Known as being an “academy” company for its talent development that produces leaders with talent that go on to be successful in other Fortune 500 companies. Competitive Advantage PepsiCo’s competitive strategy is based on differentiation instead of cost leadership. To sustain growth at PepsiCo, three competitive advantages of innovative products, muscular brands and powerful go-to-markets are applied. Innovative products offers a solution to health and wellness concerns, allows PepsiCo an opportunity to be active in the community. The big muscular brands are PepsiCo Beverages, PepsiCo International, Frito-Lay, and Quake Foods products. A powerful go-to-market, well diverse set of distribution system of consumer products that provides considerable cost efficiency and system effectiveness in driving value. Additionally, the organization continues to invest in their employees through developing leaders, holding them accountable and reward them. Furthermore, the...
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...PepsiCo, Inc. Part 1: Analysis of Financial Performance By: Randal D. Jenkin Columbia College BUSI 570 Managerial Finance Professor: Dr. Diane Suhler March 2014 Table of Contents Brief History 3 Balance Sheet 4 Income Statement 5 Cash Flow Statement 5 Liquidity 6 Profitability 6 Leverage 7 Working Capital 7 DuPont Analysis 8 Industry Analysis 9 Summary 11 Resources 12 Appendix 13 History PepsiCo is a large, international food and beverage conglomerate headquartered in New York that began as a soft-drink company. The formula for Pepsi-Cola was created by pharmacist Caleb Bradham in 1898 and the Pepsi-Cola Company was formed in 1902 as the drink began to grow in popularity. Bradham registered a patent for the formula of Pepsi-Cola in 1903, but the company went bankrupt during the Great Depression in 1931. That same year, the trademark and recipe for Pepsi-Cola were purchased by Charles Goth, the president of the Loft Candy Company and Pepsi was rebranded and distributed through Loft’s chain of retail candy and ice cream stores. Loft spun their retail stores off and began to focus solely on Pepsi-Cola and developed new soft drinks like Diet Pepsi and Mountain Dew in the 1960s. The Pepsi-Cola Company merged with snack food company Frito-Lay in 1965 to become PepsiCo. Through numerous acquisitions and periods of growth, PepsiCo...
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...In 1886, the Coca Cola Company was developed but it wasn't until 1898 that the fierce competitor Pepsi-Cola entered into the market. These two companies are the two major players that dominate the consumer beverage industry. Historically, the carbonated soft drink industry in the United Stated has been profitable for various reasons. The industry's two dominant players Coke and Pepsi have both grown their revenues by 10% annually from 1975 to 1994. By 1998, the US beverage industry reached stability with gallons of carbonated soft drinks consumed per capita on an annual basis floating between 54 and 52.3. Before the market reached this plateau, Coke and Pepsi were able to maintain high profitability simply because the market kept growing, which allowed for profitable sales growth. Coke and Pepsi have since been competing to rein the global market in consumer beverages. The global soft drink market is large at approximately US$ 410 billion (2002). In volume terms, the market size is estimated at 72 billion cases. US is the largest soft drink market and accounts for approximately 23% of global volumes. In terms of per capita consumption, US is ranked third behind UAE and Mexico. U.S. annual sales of refreshments total approximately US $88 billion. The Coca-Cola Company (TCCC) owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite). Its other brands include Minute Maid, Powerade, and Dasani water. In North America it sells Groupe Danone's Evian;...
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... | |FINANCIAL ANALYSIS | |Comparison of PepsiCo. And Coca Cola Company | | | |Comparison of both companies and recommendation on possible improvement | | | | |8/21/2011/ | | | This paper contains financial data analysis from documentation provided in Appendix A and B. In this paper, I will try to show PepsiCo, Inc. and The Coca-Cola Company and their financial situation and where that can be improved. They are the two largest beverage companies in the world, so this comparison will be very interesting. I will show how the tow companies are different and how they have some similarities do to same market target. As we know the Coca Cola is older company and leader on the market, however PepsiCo is climbing up there too. From all the different analysis type’s I have chosen the vertical or common-size analysis. The equations that I am using in my financial analysis include: the assets...
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...PEPSICO BUSINESS ANALYSIS SWOT ANALYSIS¬¬ Strengths Diverse product range 22 product lines each contributing over 1 billion in revenue (soda, juice, water, to snack foods)(Lambert, 2012, Hoovers) One of the most acknowledgeable brands in the world (PepsiCo.com) Available in more than 200 nations (PepsiCo.com) Weaknesses (Lambert, 2012, Hoovers) Lower productivity compared to Coca-Cola Over dependence of big retail Decline in soda taste Core Competencies (Lambert, 2012, Hoovers) Working towards appealing to consumers changing taste Leading the way into health conscious drinks and health conscious snacks Mass production Effective manufacturing and distribution system Competitive Advantage (PepsiCo.com) Customer Acceptance Wide product range Their Logo/Brand has been around for over 100 years and is considered a household name. Acquisition of bottlers Opportunities (PepsiCo.com) Brand management (Starbucks, Lipton)(PepsiCo.com) Healthier products for both snack lines and drink lines (PepsiCo.com) PepsiCo is taking advantage of growth in other countries such as China, Latin America, and other underdeveloped nations which are virtually untouched by rivals and have huge potential. In China PepsiCo is catering to the local tastes in snacks. Threats (Yahoo Finanace) Coco-Cola being the number one brand of North America is PepsiCo’s largest competitor. Drop of sales in soda Private-label products Government regulations Imitators Non-Carbonated...
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...purpose of this case analysis report is to review the history and financial reports for PepsiCo to determine whether or not the merger with Quaker Oats is a good project. The analysis in this report will provide key insights into what the company does and if/how the merger with Quaker can benefit PepsiCo. Company Overview The first Pepsi-Cola company was founded in 1902 by a young pharmacist from North Carolina, Caleb D. Bradham. After initial struggles with bankruptcy, the company again emerged in 1934, under new ownership and with better fortunes. Even though this year was in the middle of the Great Depression, sales soared and the company embarked on six decades of sustained and profitable growth. In 1965, Pepsi-Cola merged with the Texas-based snack manufacturer, Frito-Lay, Inc. The company, now called PepsiCo continued to grow during the 1970s and 80s through acquisitions of other companies. In 1984, the company underwent some restructuring efforts to re-focus on soft drinks, snacks, and restaurants. PepsiCo, incorporated on November 13, 1986, is a global food and beverage company. By 1995, PepsiCo sales had reached $30B, and it had 470,000 employees worldwide. Historically, it has been one of the most successful consumer products companies in the world. Between 1988 and 1994, PepsiCo had invested close to $7B to acquire thousands of fast-food and casual dining outlets. The company was investing “too much money too fast” and operational complexities were placing unnecessary stress...
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...overview of a U.S. publicly traded company. This should be one to two (1-2) pages. Overview Pepsico is the leading global food, snack and beverage company. The brand include Quaker Oats, Tropicana, Gatorade, Lay's and Pepsi . Pepsico is a global company, it includes strong regional brands such as Walkers, Gamesa and Sabritas. Either independently or through contract manufacturers .Pepsico market and sell a variety of convenient, enjoyable and wholesome foods and beverages in over 200 countries. Its portofolio includes oat, rice and grain-based foods, as well as carbonated and non-carbonated beverages. Pepsico largest operations are in North America (United States and Canada), Mexico, Russia and the United Kingdom. All the brand are united by its unique commitment to Performance with Purpose, which means delivering sustainable growth by investing in a healthier future for people and the planet .Pepsico’s goal is to continue to build a balanced portfolio of enjoyable and wholesome foods and beverages, find innovative ways to reduce the use of energy, water and packaging and provide a great workplace for our associates. Additionally, Pepsico is committed to respecting, supporting and investing in the local communities where it operates by hiring local people, creating products designed for local tastes and partnering with local farmers, governments and community groups. Pepsico make this commitment because it is a responsible . In recognition of its continuing sustainability...
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...Strategy Continuous profits of PepsiCo rely on the product enhancements to stimulate sales and gain or maintain market share. As a result, PepsiCo pursues the strategies as follow to gain competitive advantage. 1. Ensure Sustainable, Profitable Growth in Global Beverages. The merger with anchor bottlers creates a lean, agile organization in North America with an optimized supply chain, a flexible go-to-market system and enhanced innovation capabilities. When combined with the actions PepsiCo is taking to refresh the brands across the entire beverage category. It is believed that this game-changing transaction will enable Pepsi to accelerate top-line growth and also improve its profitability. In the future, PepsiCo will continue to see significant areas of global beverage growth, particularly in developing markets and in evolving categories, and invest in those attractive opportunities, concentrating in geographies and categories in which it is the leader or a close second, or where the competitive game remains wide open. 2. Focus on health issues Continued consumer focus on health and wellness, and product development in the soft drink industry makes PepsiCo to keep a watchful eye on health issues in addition to thirst quenching. In this regard, PepsiCo spends more attention to reformulate its zero-calorie DIET PEPSI brand, replacing aspartame with another sugar substitute, sucralose. Additionally, PepsiCo will use its R&D capabilities to develop low- and zero-calorie...
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...conservative number and may not reflect the particular industry being examined where the ratio may be closer to 1.5 to1. Just using the 2 to 1 relationship, a banker would say that this company is a safe bet. What the banker is saying to himself or herself is that at least 50% of the current assets can be converted into cash reasonably fast. Since PepsiCo’s current ratio was calculated to be 6.4 as compared to Coca-Cola’s which was calculated to be 1.13; PepsiCo has more assets which can be converted into cash than Coca-Cola by a ratio of approximately 6:1 respectively. The reason for this is that PepsiCo has more diversity of product which includes beverages, and snack foods as compared to Coca-Cola which has mainly beverages. The current ratio gives some indication of the company's ability to pay its current obligations when due. In general the higher the ratio is the greater the cushion. (e.g., 2:1 ratio indicates that for every $1 in liabilities, one has $2 to pay those liabilities). If this ratio is too high, as it is with PepsiCo, it could indicate that there is too much inventory on hand or that...
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...As an aspiring accountant I would be remised if I did not mention the importance of understanding what makes a company financial stable, and how to identify opportunities in a struggling company. Moreover, having an extensive knowledge of GAAP standards. For this assignment I will analyze two different company’s financial statements – PepsiCo and Coca-Cola, using three components: profitability, solvency, and liquidity. Furthermore, I will include both a vertical and horizontal analysis of said companies. Ultimately, I will address key concerns with both entities and potential solutions. Arguably, the first step in effective financial analysis is a keen understanding of key concepts and terms. Anyone can take a look at an income statement and spot top line revenue and compare that to another company, but financial stability goes beyond that. There are dozens of components to take into consideration; fiduciary responsibilities, leverage, liquidity, solvency, and of course profitability, just to name a couple. For this analysis we will primarily focus on the latter three. Liquidity – According to “Investopedia”, (2012) liquidity is: “The ability to convert an asset to cash quickly, (Investopedia, 2012).” In other words, liquidity is the amount of liquid cash an organizations keeps on hand, including their ability to liquidate current assets within a short period of time. This is expressed using a couple different ratios, I will focus on the Current Ratio and The Acid...
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