Pepsi Co Analysis

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NYSE: PEP

TABLE OF CONTENTS

Income Statement
Income Statement Analysis
Balance Sheet
Statement of Cash Flows
Cash Flow Analysis
Financial Ratios

Income statement

Income Statement Common size

PepsiCo Inc., Common-Size Consolidated Income Statement| | | | | |
 | Dec 31, 2011| Dec 25, 2010| Dec 26,2009|
Gross profit| 52.49%| 54.05%| 53.51%|
Operating profit margin | 13.28%| 14.23%| 18.69%|
Net profit margin| 9.69%| 10.93%| 13.75%|

Net Sale Change2011-2010 2010-2009
14.98% 33.79%

S & A Margin 201120102009
37.81%39.44%34.76%

ANAYLIS
Pepsi Co Gross Profit Margin increased from 2009 to 2010 but had deterioration in 2011. Pepsi Co had deteriorating numbers from 2009 to 2011 in operating profit margin. Pepsi Co had deterioration from 2009 to 20011 in Net profit margin. Pepsi Co Net sale change is from 2011-2010 is 14.98% and from 2010-2009 33.79%.

Consolidated Balance Sheet

Balance Sheet Common size

Consolidated statement of Cash Flow

Cash Flow Analysis

-CFO is positive all three years. CFO also increased in years 2009, 2010 and 2011. -Pepsi Co is profitable each year. Pepsi Co net income increased in years 209, 2010 and 2011. -Account receivables decreased in 2009, 2010 and 2011.

-Net earnings increased all three years from 2009-2011
-Inventories increased from 2009 to 2010 but decreased from 2010 to 2011 -NOTE In 2010 and in 2009 Pepsi Co invested money into pension and retirement funds

-CFI activities were negative in all 3 years.
-Pepsi Co is investing in property, plant and equipment all three years at a decreasing rate. -NOTE In 2010 Pepsi Co purchased and acquired PBG and PAS which they now own 100%

-FCF was positive all three years.

-CFF is positive all three years showing that Pepsi Co has money to spend.

Formulas

Times Interest Earned
Income before Tax + Interest Expense/ Interest Expense
2011 Times Interest Earned = 8,834 + 856/856= 11.320
2010 Times Interest Earned = 8,232 + 903/903= 10.1163
2009 Times Interest Earned = 8,079 + 397/397= 21.3501

Liabilities-To-Equity Ratio
Total Liabilities/Total Stockholders’ Equity
2011 Liabilities-To-Equity Ratio= 52,294/20,704= 2.5258
2010 Liabilities-To-Equity Ratio= 46,989/21,273= 2.2089
2009 Liabilities-To-Equity Ratio= 23,044/16,908= 1.3629

Cash Conversion Cycle
Days of inventory + Days of receivables – Days of payable 2011 Cash Conversion Cycle= 41.59 + 36.32 - 86.68 = -8.78
2010 Cash Conversion Cycle= 41.14 + 34.54 - 130.82 = -55.15 2009 Cash Conversion Cycle= 46.67 + 39.29 - 148.91 = -62.95

Current Ratio
Current Assets/Current Liabilities
Current Assets= Cash and Cash Equivalents + Short Term Investments + Net Receivables + Inventory + Other Current Assets. 2011 Current Ratio= 17,441/18,154= .9607
2010 Current Ratio= 17,569/15,892= 1.1055
2009 Current Ratio= 12,571/8,756= 1.4357

Quick Ratio
Quick Ratio= Cash and Cash Equivalents + Short Term Investments + Net Receivables/Current Liabilities 2011 Quick Ratio= 11,337/18,154= .6244
2010 Quick Ratio= 12,692/15,892= .7986
2009 Quick Ratio= 8,759/8,756= 1.0003

Profit Margin
Net Income/Sales
2011 Profit Margin= 6,443/66,504= .0969= 9.7%
2010 Profit Margin= 6,320/57,838= .1093= 10.9%
2009 Profit Margin= 5,946/43,232= .1375= 13.75%

Financial Leverage
Average Total Assets/Average Total Equity
2011 Financial Leverage= 72,882/20,704= 3.5202
2010 Financial Leverage= 68,153/21,273= 3.2037
2009 Financial Leverage= 39,848/16,908= 2.3568

Times Interest Earned
While assessing my Times Interest Earned I found that in 2009 Pepsi Co profits covered its annual interest expenses by 21.4, in 2010 by 10.12 and in 2012 by 11.32. From 2009 to 2011 the times interest earned decreased by almost half.

Liabilities-To-Equity Ratio
While assessing my Liabilities-To-Equity Ratio I found that after 2009 the company’s ratio...
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