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Dr Pepper Snapple Group 2011: Fighting to prosper in a highly competitive market

4. Based on the information, I have conducted the financial review of DPS’s performance as this following: DPS| 2010| 2009| 2008|
Profitability Ratio|  |  |  |
Return on assets| 5.96%| 6.32%| N/A|
Gross Profit Margin| 60.20%| 59.61%| 54.64%|
Operating Profit Margin| 18.19%| 19.62%| -2.94%|
Net Margin| 9.37%| 10.03%| 5.46%|
Liquidity Ratio|  |  |  |
Current Ratio| 0.98 times| 0.97 times| N/A|
Leveraging Ratio|  |  |  |
Debt Ratio| 0.7224| 0.6369| N/A|

Profitability Ratio
According to the table, we can conclude that DPS has the percentage decrease in ROA by 0.36% which means the ability to convert its investment in to profit is decrease. For gross profit margin, the ability to control production cost is consistency increasing, so DPS has the strength in managing the margin its make on products buy and sell. Next operation profit margin, the table showed the DPS has weakness in controlling the operation costs or overheads in 2008, but DPS could improve to ability from -2.94% to 10.30% in 2009. Then DPS could obviously increase in its net profit margin from 2008 to 2009, but a little bit drop by 0.66%;however.

Liquidity Ratio
As the liquidity ratio of DPS is 0.97 times in 2009 and 0.98 times in 2010, even the number is not more than 1 the ability to pay debt of company is increasing.

Debt Ratio
Since the number of debt ratio is not more than 1 which means the company has asset more than debt, but if the trend of debt ratio keep growing, the company will face with the business risk.

5. DPS’s business-level strategy is “focus differentiation’. The company focus on the narrow geographic market especially in the North America with the one or few segment of the products. Moreover DPS also use differentiation strategy in productions taste and also its distribution channel. The company not only sale its products...
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