...The Coca-Cola Company and PepsiCo, Inc. Both Coca-Cola Company and PepsiCo, Inc. used a comparative report format, that list the sections one above the other, on the same page, to present their balance sheets. For a measure of both a company’s efficiency and its short-term financial health, the working capital is calculated as: Working Capital = Current Assets – Current Liabilities. At the end of 2007, the Coca-Cola Company has a negative working capital of $1,120 million from the current assets of $12,105million and the current liabilities of $13,225 million. The Coca-Cola Company’s negative working capital might be impacted by the effects of transactions occurred in 2007. Trade accounts receivable, inventories, prepaid expenses and other assets were increased to $730 million, $579 million and $637 million respectively. It was primarily due to 2007 acquisitions, including glaceau, 18 German bottling and distribution operations. Because of these acquisitions, accounts payable and accrued expenses were increased to $1,860 million. Additionally its loans and notes payable of $2,684 million were increased primarily due to net borrowings of commercial paper and short-term debt during 2007 to fund acquisitions. It seemed not that the Coca-Cola Company was unable to meet its short-term liabilities with its current assets but it seemed that the increases of current liabilities were much higher than that of current assets. On the other hand, PepsiCo, Inc. had a positive working...
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...nonalcoholic beverage concentrates and syrups in the world “(Coca-Cola Company pg. 3). PepsiCO inc. – “We are the leading global snack and beverage company. We manufacture, market and sell a variety of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods” (PepsiCo inc. pg 32). b. In terms of beverage sales, The Coca-Cola Company has the dominant position. (Coca-Cola Company pg. 3) c. Coca-Cola Company – Total Assets 2006 = $29,963, Total Assets 2007 $43,269 (Coca-Cola Company pg. 69). 43,269 – 29,963 = $13,306 / 29,963 = 44.4% increase PepsiCo inc. – Total Assets 2006 - $29,930, Total Assets 2007 $34,628 (PepsiCo inc. pg 62). 34,628 -29,930 = 4,698 / 29,930 = 15.7% increase d. Pepsi Co. depreciation and amortization - $1,426 (PepsiCo inc. pg 57). Coca-Cola Company depreciation and amortization - $1,163 (Coca-Cola Company pg. 68). I believe that Pepsi Co. has a higher depreciation and amortization expense is due to the higher amount of plant, property and equipment. Pepsi Co. has $11,228 (PepsiCo inc. pg 58) while Coca-Cola has $8,493 (Coca-Cola Company pg. 67). e. Both companies use consolidated statements of income, which is a condensed version of a multi-step format. There area subtle differences in them, Coca-Cola uses the term cost of goods sold (Coca-Cola Company pg. 66) and Pepsi uses cost of sales (PepsiCo inc. pg 56). f. | 2005 | 2006 | 2007 | Coca Cola | 14,909 | 15,924 | 18,451 | ...
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...You Are an Investment Analyst; Pepsi versus Coca Cola Renee Cole Dr. Tim Creel December 16, 2012 A closer look at PepsiCo and Coca Cola PepsiCo Pepsi-Cola was created in the late 1890s by Caleb Bradham, a New Bern, N.C. pharmacist. Then in 1965 Pepsi-Cola and Frito-Lay merged to create PepsiCo(No author, 2012). According to No author(2012) PepsiCo operates in the consumer goods sector and produces a variety of foods and drinks to include Lays and Ruffles potato chips, Doritos, Cheetos, Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker grits, Cap n Crunch, Quaker rice cakes, beverage concentrates, fountain syrups, and finished goods under Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, ready-to-drink tea, coffee, and brands licensed from Dr Pepper Snapple. PepsiCo’s major customer is Wal-Mart holding 12% of sales (Nooyi, 2010). Major suppliers include E2M who specialize in packaging and manufacturing consulting and SHI International a regional reseller and global IT provider (Freeman, 2010). No author (2012) stated The president of PepisiCo is Zein Abdalla Indra and Nooyi is Chairman and Chief Executive Officer of PepsiCo, a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. PepsiCo’s main businesses – Quaker, Tropicana, Gatorade...
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...Joson, Gerard Gio R. EMG166-T Case analysis no. 11 – Pepsico’s Diversification Strategy In 2008 December 5, 2011 Overview Pepsico is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo is a world leader in convenient foods and beverages, with revenues of about $25 billion and over 142,000 employees. The company consists of the snack business of Frito-Lay North America and the beverage and food businesses of PepsiCo Beverages and Foods, which includes PepsiCo Beverages North America (Pepsi-Cola North America and Gatorade/Tropicana North America) and Quaker Foods North America. PepsiCo International includes the snack businesses of Frito-Lay International and beverage businesses of PepsiCo Beverages International. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001. PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. Our mission is to be the world's premier consumer products company focused on convenient...
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...Coca-Cola and Pepsi Co. for their stakeholders, like consumers, shareholders, managers, investors, and employees, creditors and lenders. The two soft-drink giants have been battling for bigger shares of the globe's thirst for more than a century. "Coke or Pepsi" has been debated endlessly, with ads such as the Pepsi Challenge campaign in the 1970s fueling the rivalry. And both sides in this epic consumer battle have had hits (Diet Coke and Pepsi One) and misses (New Coke and Crystal Pepsi) The Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. It is assessed as the most valuable brand in the world that owns or licenses more than 400 brands, and its products are sold in more than 200 countries. However, PepsiCo, as one of Coca-Cola’s toughest competitors, is also very competitive in the nonalcoholic beverage market. It is the second-largest food and beverage company in the world. This is quite evident of PepsiCo’s gross profit margin of 57.5% and sales for 2010 of $43.23 billion in 2010, compared to Coco-cola’s gross profit margin of 68.4%.and sales of $30.99 billion. (Investing in Coco-cola or Pepsi for Stock Gains) Based on your analysis, determine which company is better able to pay current liabilities (debt). Explain your rationale. The current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, Coco-Cola has...
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...strategy implemented by PepsiCo to exploit rapidly growing markets opportunities by acquiring the organisations Tropicana, Gatorade and Quaker. The case study will highlight that it was imperative for the PepsiCo organisation to embark on a radical restructuring strategy to optimise their return on investments. The paper will discuss the rationale behind the critical restructuring .The benefits of the acquisitions and restructuring strategy will be discussed and motivated in detail. The strong existing competitive resources that PepsiCo and the new acquired brands in the North America region possess will be emphasised. The modifications to PepsiCo structure in 2001 and 2004 will be scrutinised to motivate and justify the decisions of the PepsiCo leadership. In addition the case study will evaluate the execution of the radical change and the tasks that should be performed by key resources. The emotional impact on employees due to the radical transformation and the key role employees should perform will be described. The focus of the paper will be on the function; the leadership of PepsiCo must perform and the potential roles the employees of PepsiCo could execute. Ultimately, the case study will discuss the complex relationship between structure and strategy. The paper will establish that PepsiCo had to regular acclimatise their strategy and structure to accomplish their organisational goals. Introduction Over a three year period from 1998-2001, PepsiCo made 2 major acquisitions...
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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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...Drinks 205.1 billion15 billion litres 16.2 billion litres Concentrateslitres 43 billion litres Concentrates 43.7 billion litres RTD Tea 30.1 billion litres RTD Coffee 4.5 billion litres The Coca-Cola Company slightly underperformed the world’s soft drinks market amid the recession in Western Europe and slow economic recovery in the US. It is actively expanding in low calorie carbonates to retain consumers and widening the use of natural sweeteners in its beverages. The part acquisition of Aujan will help TCCC to accelerate its expansion into the Middle East and Africa region and the full takeover of Innocent is likely to boost its position in premium juice in Western Europe. © Euromonitor International SOFT DRINKS: COCA-COLA CO, THE PASSPORT 2...
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...to thank God as finally we were able to finish our assignment. Secondly we would like to thank to our supervisor of this assignment, Sir Mehwish for the valuable guidance and advice. He inspired us greatly to work in this assignment. His willingness to motivate us contributed tremendously to our assignment. We also would like to thank him for showing us some example that related to the topic of our assignment. This research assignment would not have been possible without the support of many people especially group members; Mubashir, Safeer, Usama and Shahriyar for sharing the literature and invaluable assistance. Without helps of the particular that mentioned above, we would face many difficulties while doing this Introduction of Pepsi Co. International: Mr. Caleb Bradham a young pharmacist from New Bern, North Carolina City. In January 1898, this was the starting period of Pepsi-cola. Caleb Bradham created a drink, which is call "the Brad Drink". In 1903 Brad index the name drink Pepsi. At Marco level he ongoing his own produced and build his own organization. The trade extended and this drink achieved appreciation time. This company appears at 24 states of America with more than 250 dealers in 1909. First time Pepsi packed in 16.5 ounce packing size. Pepsi-cola has launched its new filler in 12 ounce in 1932. New promotion struggle is started with the name of "Refresh without Filling" in 1950 by Pepsi-cola. The chemical formula also changed which caused to decrease its...
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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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...EXECUTIVE SUMMARY In the case study, PepsiCo is a producer of carbonated cola drink and was marketing its products in most countries around the world. PepsiCo’s competitor was Coca-Cola. PepsiCo made two acquisitions of Tropicana and Quaker and the view was that there was synergy and economies of scale to be gained. PepsiCo should have had an organisational structure that will enable the achievement of the organisational mission and objectives. The organisation reorganised their structure to a multidivisional structure in a move to exploit the full acquisition potential. A multidivisional structure is most suitable for an organisation that has not got a wide range of products like PepsiCo. The organisation did not experience benefits from the multidivisional structure because PepsiCo had a wide rage of products and different customers. The organisation was structured into divisions and each reporting to the headquarters and there was no synergies and economies of scale gained. PepsiCo revised the organisational structure to a matrix structure. It enabled the organisation to operate in its particular competitive situation at peak effectiveness. At Pepsi they discovered that it was essential to drive the various brands as part of one team. There was less conflict between employees because of the hierarchical setup of the organisation. PepsiCo Beverages became the No 1 liquid refreshment beverage company in measured channels. There was a strategic fit as its strengths in the...
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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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...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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...Pepsi co PepsiCo Inc. (PEP) is a leading food and beverage company that manufactures and distributes its products in more than 200 countries. Food products that PepsiCo manufactures include chips, flavored snacks, cereals, rice, pasta, and dairy-based products. The company’s beverage product portfolio includes carbonated soft drinks, juices, ready-to-drink tea and coffee, sports drinks, and bottled water. Headquartered in Purchase, New York, the company employs around 274,000 people worldwide. According to Information Resources, Inc. (or IRI), a market research company, PepsiCo owns nine of the 40 largest packaged goods trademarks in the United States. The company owns several brands, and 22 of them, including Pepsi, Lays, and Gatorade, generate more than $1 billion each in revenues. Enlarge Graph A brief history of PepsiCo PepsiCo was formed in 1965 with the merger of Pepsi-Cola Company and Frito-Lay, Inc. At that time, Pepsi-Cola Company was manufacturing Pepsi-Cola, Diet Pepsi, and Mountain Dew. Frito-Lay’s products included Fritos corn chips, Lay’s potato chips, Cheetos cheese flavored snacks, Ruffles potato chips, and Rold Gold pretzels. PepsiCo grew bigger with the 1998 acquisition of Tropicana and the 2001 merger with Quaker Oats. The combination of these companies made PepsiCo a strong diversified consumer staples firm. In the next part of this series, we’ll discuss PepsiCo’s business model in detail. PepsiCo’s competitors PepsiCo competes with global, regional...
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...Adequacy Ratio’ Analysis of ‘Free Cash Flow / Operating Cash Flow’ Competition Marketing Campaign Innovation References Pepsi (PEP) Background PepsiCo, Inc. is a global food, snack and beverage company. The Company's brands include Quaker Oats, Tropicana, Gatorade, Lay's, Pepsi, Walkers, Gamesa and Sabritas. Pepsico Inc. is registered on NYSE using the ticker symbol of ‘PEP’. Using the available data from 1978 till now, the PEP ticker symbol has seen the stock price increase of approximate 4400% , which is comparable to its closest competitor Coca-Cola’s (Ticker : KO) growth of 4500% in the same time period. Pepsico’s current Market Cap is approximately 98.83B with a P/E ratio of 15.90. A high P/E ratio suggests investor's confidence in the future growth prospects of the company and Pepsico has the highest P/E ratio as compared to its major competitors in the sparkling soda industry including Coca-Cola and Dr. Pepper. Even though it can be interpreted that PEP has lagged behind Coca-Cola over the years in US market but it is very important to understand that the majority of PepsiCo's revenues do not come from carbonated soft drinks.In fact, beverages account for less than 50% of total revenue. Additionally, over 60% of PepsiCo's beverage sales come from its key non-carbonated brands like Gatorade and Tropicana. PepsiCo is also the largest snack and non-alcoholic drink producer in the United States, with 39% and 25% of the respective market shares. The below pie-chart...
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