PepsiCo & Coca Cola Financial Analysis
The report presented below is the financial analysis of Coca Cola and Pepsi Inc. In the beginning a brief overview of both the companies is given ,followed by a detailed view of each of the company’s financial health , comprising of the horizontal and vertical analysis of the balance sheet and income statement and finally key ratios are calculated to observe the trends and make recommendations. The financial data is taken from MSN Money Central website referenced below.
Coca Cola was invented by a pharmacist in the year 1886 when he was experimenting for a recipe for headache and an energizer. Nowadays Coke serves as one of the number one recognized brands of the world with a unit sales close to 3200 servings. Coke followed a path of being known as a tonic and a healer with caffeine’s in late 1890’s to being number one beverage in 1900 till present. Subsequently Coca Cola rose its domination under the leadership of various intelligent minds. By the time World War two started Coca Cola was already introduced and expanded in forty four countries. Today Coca cola has the credit of being one of the top most brands with a huge net worth and brand value.(Kulaiwik,2009)
Pepsi Cola has a long a rich history starting from 1898. Similar to the story of Coca Cola ,Pepsi was also developed by a pharmacist who was experimenting with spices and different herbs . After developing this new taste he applied for Patent trademark. The business finally started to grow and finally Pepsi was registered in 1903 by the US Patent office. In addition to this a strong franchise system was also built which was mainly responsible for Pepsi’s success worldover. Moreover different marketing campaigns helped Peps built it brand name worldover.(Andrew ,2002)
A detailed Vertical Analysis of Income Statement and Balance Sheet of both companies is given . (Day,2008)
|Income Statement | | | | | | | |PepsiCo Inc | | |Vertical Analysis | | |2009 |2008 |2009 |2008 | |Revenue |43,232 |43,251 |100% |100% | |Total Revenue |43,232 |43,251 |100% |100% | |Cost of Revenue, Total |20,099 |20,351 |46.49% |47.05% | |Gross Profit |23,133 |22,900 |53.51% |52.95% | |Selling Expense |14,612 |15,489 |33.80% |35.81% | |Research & Development |414 |388 |0.96% |0.90% | |Depreciation/Amortization |63 |64 |0.15% |0.15% | |Operating Income |8,044 |6,959 |18.61% |16.09% | |Income Before Tax |8,079 |7,045 |18.69% |16.29% | |Income Tax – Total |2,100 |1,879 |4.86% |4.34% | |Income After Tax |5,979 |5,166 |13.83% |11.94% | |Minority Interest |-33 |-24 |-0.08% |-0.06% | |U.S. GAAP Adjustment |0 |0 |0.00% |0.00% | |Net Income Before Extra. Items |5,946 |5,142 |13.75% |11.89% | |Net Income |5,946 |5,142 |13.75% |11.89% |...
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