Coca-Cola V.S Pepsi

Topics: Financial ratio, Financial ratios, Generally Accepted Accounting Principles Pages: 21 (6131 words) Published: December 4, 2012
Introduction of Finance FL001


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Assignment| /100 |

1.Introduction ------------------------------------------- 3 2.Financial Analysis ------------------------------------ 5 2.1.Profitability Ratio ---------------------------------------------- 5 2.2.Liquidity Ratio -------------------------------------------------- 11 2.3.Activity Ratio ---------------------------------------------------- 15 2.4.Debt / Gearing Ratio ------------------------------------------- 19 2.5.Market Ratio ---------------------------------------------------- 25 3.Other Relevant Information ----------------------- 32

4.Recommendation ------------------------------------- 35
5.References & Appendices --------------------------- 36

The Coca-Cola Company is the world's largest nonalcoholic beverage company. They own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, juices, ready-to-drink teas and coffees, energy and sports drinks, and etc. Along with Coca-Cola, which is recognized as the world's most valuable brand, they own and market four of the world's top five nonalcoholic sparkling beverage brands, including Diet Coke, Fanta and Sprite. Finished beverage products bearing their trademarks, sold in the United States since 1886, are now sold in more than 200 countries.

The Coca-Cola Company make their branded beverage products available to consumers throughout the world through their network of Company-owned or controlled bottling and distribution operations, bottling partners, distributors, wholesalers and retailers. It is the world's largest beverage distribution system. Of the approximately $55 billion beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to their account for approximately $1.7 billion.

The Coca-Cola Company believe that their success depends on their ability to connect with consumers by providing them a wide variety of options to meet their desires, needs and lifestyle choices. Their success further depends on the ability of their people to execute effectively, every day.

The goal of The Coca-Cola Company is to use their Company's assets - the brands, financial strength, unrivaled distribution system, global reach and the talent and strong commitment of the management and associates - to become more competitive and to accelerate growth in a manner that creates vales for our shareowners.

The Coca-Cola Company was incorporated in September 1919 under the laws of the State of Delaware and succeeded to the business of a Georgia corporation with the same name that had been organized in 1892. (The Coca-Cola Company's annual report, 2010)

We need to chose a benchmarking company before we launch into analysis. A benchmarking company compares a company’s current performance against its competitor. It provides a standard of comparison for measurement.

In this report, PepsiCo, Inc was chosen for benchmarking because both Coca-Cola and PepsiCo are in the same industry and their product and company size are also quite similar.

2.Financial Analysis
Analysis of a firm's financial statements is of interest to shareholders, creditors, and the firm's own management. In many cases, the constituents of a firm want to compare its financial condition to that of similar firms, but doing so can be very tricky...... The sales, profits, and other items that appear on a firm's financial statements are difficult to interpret unless we have some way to put the numbers in perspective. (Smart & Megginson, 2008)

Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firm's performance. The basic inputs to ratio analysis are the firm's income...

References: * Scott B. Smart & William L. Megginson (2008) Introduction to Financial Management 2th edition
* Investopedia
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