A) Coca-Cola is predominantly a manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups. They also manufacture finished beverages.
Pepsi is a manufacturer or use manufacturers, market and sell a variety of salty, sweet and grain-based snacks, carbonated and non-carbonated beverages, and foods through their North American and international divisions.
B) Coca-Cola has the dominant position in beverage sales.
C) Coca-Cola 2006 $29,963, 2007 $43,269 The difference is $13,306 for a 44.4% increase.
Pepsi 2006 $29,930, 2007, $34,628 The difference is $4,698 for a 15.6% increase.
D) Pepsi had $1,426 which was more than Coca-Cola’s $1,163. Pepsi has more long term assets which are depreciable.
E) Both companies use a Condensed Income Statement which is the condensed version of the multistep format. Pepsi uses cost of sales while Coke uses cost of goods sold, Pepsi uses operating profit while Coke uses operating income. Pepsi uses bottling equity income while Coke uses equity income.
|Coca-Cola | |2005 |2006 |2007 | | |Gross profits |14,909 |15,924 |18,451 | | |Operating profits |6,085 |6,308 |7,252 | | |Net income |4,872 |5,080 |5,981 | | | | | | | | |Pepsi | |2005 |2006 |2007 | | |Gross profits |18,386 |19,375 |21,436 | | |Operating profits |5,984 |6,502 |7,170 | | |Net income |4,078 |5,642 |5,658 | | | | | | |
Coca-Cola has been more efficient than Pepsi in producing a greater net income in two out of the three years while have lower gross profits.
Coca-Cola is report form
Pepsi is report form
|Coca Cola | | |
| |Current Assets |12,105 |
| |Current Liabilities |13,225 |
| |Working Capital |-1,120 |
| | | | |
|Pepsi | | |
| |Current Assets |10,151 |
| |Current Liabilities |7,753 |
| |Working Capital |2,398 |
Coca-Cola operates on long term credit. Pepsi uses their working capital to hedge against currency rates, seasonal and holiday related patterns.
Coca-Cola focuses on intangibles while Pepsi concentrates on investments.
| |2005 |2006 |2007 |
|Coca-Cola |6,423 |5,957 |7,150 |
|Pepsi |5,852 |6,084 |6,934 |
The trend for both companies is increasing even though Coca-Cola had a dip in 2006.
Coca-Cola cash and cash equivalents reported 4,093
Pepsi cash and cash equivalents reported 910
Coca-Cola classifies marketable securities that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents.
Pepsi classifies as investments with original maturities of three months or less which are not intended to be rolled over beyond three months.
Accounts receivable (net) 3,317
Accounts receivable (net) 4,389
Pepsi had the greater allowance for doubtful accounts at 69, Coca Cola had 56
|Coca Cola | | | | | | |Inventory |2,220 | | | | | | | | | | | |Pepsi | | |...
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