XACC280/Financial Accounting Concepts and Principles
July 10, 2010
The Coca-Cola company has been in business since its inventor began selling it in drug stores in 1886 (The Coca-Cola Company, 2009). Pepsi-Cola was invented a short time later in 1898, but at the time it was called “Brad’s drink.” It was later renamed Pepsi-Cola in 1902 (Butler, 2006). Since those early days when the sodas were invented, Coca-Cola and Pepsi have been in competition with each other for the domination of the world’s soda market. Over the course of more than a century, sales have continued to rise for both companies, and they both consistently earn a profit. Both companies have expanded into new product markets in more recent years. They have chosen to invest their earnings in new ventures like bottled water, snack foods, and iced tea, and they each strive to continue increasing their profits in many ways. In order to maintain this continued growth in the coming years, these companies are both in need of investors who will fund their efforts. Comparison of Current Assets and Current Liabilities
Investors and potential investors in these companies will look at and consider a multitude of information before deciding which of these two companies would be a better investment. For instance, most investors will look at each company’s current assets and liabilities amounts. In 2004, Coca-Cola had more than 12 million dollars in current assets, while PepsiCo showed only 8.6 million dollars in their current assets. In 2005, Coca-Cola faced a decrease while PepsiCo had an increase in current assets. PepsiCo recorded 10.4 million dollars in current assets, while Coca-Cola dropped to 10.2 million dollars. Their current liabilities faced similar comparisons. In 2004, Coca-Cola had 11.1 million dollars in current liabilities, and then dropped that number to 9.8 million dollars in 2005. This...