Xacc 280 Financial Analysis Paper

Financial Analysis

By

XACC 280

Professor

University of Phoenix

The objective of this paper is to compare the major players in the beverage/soft drink industry, Pepsi Co. & Coca Cola Co. This paper will give you sound information on which company to invest in as well as taking a deeper look at both companies over all. My analysis will be made based on the company’s income statements, horizontal, vertical analysis, balances sheets and financial statement ratios. This along with other information should give you a clear picture of which company is the best company to invest in.

Researching this analysis is needed
Having said that, there is still a point where price is not the issue but taste. Some people swear by the taste in this loyal brand market. These two corporations have concentrated on cultivating brand management through applicable advertising, marketing campaigns. According to Bloomberg BusinessWeek, “Coca-Cola remains the best globally recognized brand across all industries for ages, while PepsiCo’s brand ranked number 26 in year 2008.” PepsiCo has been able differentiate itself from competitors by tapping into other markets like chips and healthy alternative foods. While PepsiCo is known for their soda, their expansion is clear in showing there is a need for other things being non-soda. The time for vitality comes with diversification because there are true signs of a shift in consumption. The decrease in soda consumption raises PepsiCo. has positioned it to continue to remain profitable for its shareholders.
The income statement of PepsiCo’s COS to sales percentage slightly rose from 43.31% in year 2004. Coca-Cola’s five-year average COS to sales percentage was only 35.26%, much lower than PepsiCo. Coca Cola was able to achieve a higher gross profit margin with lower COS to sales percentage. PepsiCo is the consequence of its tougher pricing
If PepsiCo were a country, the size of its economy—sixty billion dollars in revenues in 2010—would put it sixty-sixth in gross national product, between Ecuador and Croatia. Many studies point to the ubiquity of high-calorie, low-cost processed foods and drinks as one of the major drivers of this condition. Snacks, in particular, play a role in childhood obesity, which is growing even faster than obesity in adults. Americans consume about fifty gallons of soda a year, more than four times the average per-capita consumption sixty years ago. Americans also ingest about thirty-four hundred milligrams of sodium per day, twice the recommended amount; sodium has long been linked to high blood pressure. almost half of PepsiCo’s business is overseas (thirty per cent of it in developing countries), foreign markets eventually tend to follow U.S. trends. The markets of the future may well be in “packaged nutrition”—in enriched products like PepsiCo’s SoBe Lifewater, which contains vitamins, and in its pricey Naked line of fruit juices and smoothies, which contain antioxidants. Another growing category is “functional” foods and beverages, like varieties of the sports drink Gatorade, which PepsiCo markets for specific physiological or metabolic attributes. (Thanks to Gatorade’s new “fit series,” you can drink G1 Prime before you work out, G2 Perform during your