The annual reports were used to derive ratios. The report will analyze each ratio in turn, comparing the respective performance of each company. Once this analysis is complete, the report will draw conclusions regarding the two companies and their potential role in our firm's investment portfolio.
There are three main types of ratios -- liquidity, solvency and profitability. In terms of liquidity, Pepsi exhibits superior performance. Pepsi has the better current ratio (1.28 to 1.10) and cash ratio (0.77 to 0.63). This means it is in a better position to meet its immediate cash needs. Pepsi also turns over its inventory faster (9.08 times to 5.72 times). Coke turns over its receivables faster (10.31 times to 10.04 times). It is worth noting, however, that while Coke is better, it is barely so; whereas Pepsi is significantly...
Both companies, however, would be considered liquid.
Both companies are also solvent. Coke, however, is the more solvent of the two. Coke's debt ratio is lower (49% to 52%) but more importantly its cash debt coverage ratio is significantly better (0.42 to 0.18). Coke has better free cash flow as well (2784 to 2338). Pepsi does have a better times interest earned, but the difference is minimal compared with Coke's advantages in other areas of solvency (34.43 to 32.74).
While both firms are profitable, Coke is easily the more profitable of the two. Coke has a 22% net profit margin, compared with Pepsi's 14% margin. This means that Coke is able to extract better prices from both its customers and suppliers. Pepsi, however, has a better asset turnover. Both firms have solid returns -- Coke edges Pepsi on ROA (17% to 16%) while Pepsi edges Coke on ROE (33% to 32%). However, the significant different net profit margin makes Coke the more profitable of the two companies.
Based on these observations, it is recommended that the company invest in Coca-Cola. Both companies have strong financial positions. However Coke's higher margins and lower leverage give it more flexibility to withstand market downturns or to take advantages of any opportunities that the market presents. That indicates that Coke is more likely to continue its strong performance in the long run. Pepsi is all likelihood will…
For nutritionists, who continue to issue dire warnings about the obesity epidemic, a diet soda surge is good news, although the soda industry discounts the link. The shift to diet is being felt across the industry, including the many small regional soda companies. Coca-Cola operates in a highly saturated industry, as there are many, many competitors for cola products. Some companies manufacture highly competitive goods, such as PepsiCo, which
, relevant to considerations of the impact of locally adapted TV advertisements on sales revenues of Coca-Cola Company in Morocco during the Holy month of Ramadan. Chapter III: Methodology During Chapter III of the study, the researcher relates the methodology, which includes a survey, utilized to investigate the impact of locally adapted TV advertisements on sales revenues of Coca-Cola Company in Morocco during the Holy month of Ramadan. Chapter IV: Analysis During Chapter IV
Coke Pepsi, . For reference, I 57 years male. Written Assignment: Analyzing Advertisements Essay - Rough Draft Analyzing Advertisements Overview: Logical argumentation studied accepted forms argument. The Soda Wars: Analyzing Messages in Advertising The battle between two soda giants, Coca-Cola and Pepsi, has been raging for many years. Both products are hugely successful, with world-wide brands and a wide array of products beyond their titular sodas. Similarly, their advertising campaigns and
Coca Cola Is Everything Coca-Cola Is Everything: SCM, CRM, ERP, Social Media Importance of standardization in supply chain management Software services of Coke My Coke Rewards an example of a switching cost Pepsi's Facebook page and comparison with Coca-Cola's Facebook Supply Chain management is regarded as anintegratedapproach for managing business resources. The companies including largescaleenterprises utilize its capabilities to enhance their business performance. The capability of the supply chain management can be increased through using a
Coca cola challenged this criticism and took assistance from the U.S. Embassy situated in India. For regaining its position in India, Sanjiv Gupta, a coca cola representative, did research and then showed the results to public through websites and advertisement. Sanjiv Gupta showed a great example of regaining the position of a brand after severe criticism. Coca cola fought bravely in this attack and openly communicated with the public. Future of coca
Instead, the Cola Wars helped the industry grow. In 2000, for example, 41% of total non-alcoholic beverages sold were CSDs. In the late 1990s and into the 21st century, the drinks with high growth (and media hype) were non-carbonated juices, sports drinks, tea drinks, dairy drinks, and bottled water. Pepsi dominated this market with Gatorade, Lipton and Aquafina. The bottlers were also required to reinvest in more complex equipment