This article mainly emphasizes upon the financial comparison of the two giant companies of the world in the industry of beverages which are PepsiCo Inc. and Coca-Cola Inc. for the year ended 2003, 2004 and 2005. …
The structure of this article is framed in such a manner that firstly income statements of both the companies are analyzed on horizontal and then on vertical basis. Next section is based on the analysis of balance sheets for the two companies on horizontal basis and then followed by vertical analysis. The major components of income statements are analyzed for both the companies in respect of cost of goods sold, operating income, income before taxes and finally net income. Cost of sales for PepsiCo is around 43% of the sales whereas the same for Coca-Cola is around 35% of the sales which is substantially lower than that of PepsiCo. In respect of operating profits, Coca-Cola has also an edge over PepsiCo such that its operating income is around 26% of the sales whereas PepsiCo remained behind and has the operating profit of just around 18%. Coca-Cola remained successful in maintaining a healthy position in respect of its income before taxes such that it managed to earn income before taxes around 28% of the sales whereas PepsiCo hardly managed to earn income before taxes of around hardly 19% of the sales. Net income for Coca-Cola has remained on a stronger side pursuing around 21% of its sales. On the other hand, PepsiCo just managed to earn net income of 13% of its sales in the three years. Following are the attached tables for percentage change on horizontal basis for two companies....
s 19.60 18.95 18.51 Provision for Income Taxes 7.08 4.69 5.28 Income from Continuing Operations 12.52 14.26 13.23 Tax Benefit from Discontinued Operations 0.00 0.13 0.00 Net Income 12.52 14.39 13.23 Coca Cola Inc. Income Statement Horizontal Analysis 2005 2004 2003 Net Operating Revenues 100.00 100.00 100.00 Cost of Goods Sold 35.47 35.30 37.28 GROSS PROFIT 64.53 64.70 62.72 Selling, general and administrative expenses 37.82 36.29 34.94 Other operating charges 0.37 2.21 2.75 OPERATING INCOME 26.34 26.21 25.03 Interest income 1.02 0.72 0.84 Interest expense 1.04 0.90 0.85 Equity income — net 2.94 2.86 1.95 Other loss — net (0.40) (0.38) (0.66) Gains on issuances of stock by equity investees 0.10 0.11 0.04 INCOME BEFORE INCOME TAXES 28.96 28.62 26.35 Income taxes 7.87 6.32 5.50 NET INCOME 21.09 22.29 20.84 Income Statement Analysis on Vertical Basis In respect of vertical analysis, PepsiCo is found to have earned much more growth as compared to Coca-Cola such that PepsiCo’s revenues increased by 8% and 11% respectively as compared to previous years whereas Coca-Cola’s revenues increased with 4% and 6% during the same periods. Operating profits of PepsiCo increased by around 10% and 12% as compared to previous years, however, only 9% and 7% increase in operating income for Coca-Cola can be observed. Net income of PepsiCo decreased by 3.18% as compared to previous year but Coca-Cola managed to increase its net income by 0.52%. Following tables highlight the comparative vertical analysis for both companies. PepsiCo Inc. Income Statement Vertical Analysis 2005 2004 Net Revenue 11.28 8.49 Cost of sales 11.85 8.41 Selling, general and administrative expenses 11.63 8.70 Amortization of intangible ...
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One of the major factors that have contributed to the success of Coca-Cola in the soft drink industry is a strong marketing strategy. The mission statement of Coca-Cola is comprised of three aspects First, to refresh the world, secondly to make a difference and create value and thirdly to inspire moments of happiness and optimism.
In the third quarter results, the company posted an increased growth in sales volume as the sales grew by 2 percent (Ziobro, 2012). This was better than the previous year third quarter growth, which recorded a paltry 1 percent in same segment. The Coca cola also reported a net revenue growth by 5 percent to reach $5.67 billion in the North American segment in the third quarter an aspect that is attributed to a number of reasons.
The company initially marketed its famous product “Pepsi Cola” by the name of Brad’ drink but later on changed the name to Pepsi 1903. Later on in the same era, the PepsiCo for the first time registered the trademark ‘Pepsi’ and commenced the commercial production and marketing of the beverage.
Pension plan is an important benefit that is to be offered by a company to its employees. Coca-Cola and Pepsi Co are the two global competitors but have done well in ensuring that the employees of the company get full benefits from the pension arrangements of the company though their process of offering benefits may differ.
Both companies have set numerous sub-plants in different regions while the coca-cola company holds the largest number of sub-plants situated across the whole world. These sub-plants serve as strong holds for the companies and ensure satisfied distribution of products for the companies.
The introduction, pursuit and manipulation of a strategy, of any strategy, for that matter, of growth and expansion of a company, of the extension of the existing and the conquest of new markets for its products, of finding new ways of doing old things, of scrapping old technology and adopting new, of forays into new territories abroad and overseas - the introduction and pursuit of strategies for these and related purposes - must be interrelated to the realization of the ultimate objective of the company concerned.
The brand portfolio includes carbonated beverages, non-carbonated energy drinks, waters, juice drinks, ready-to-drink coffees and teas. The mission of the company is to refresh the world, inspire moments of optimism and happiness while
Ordinarily, the Coca-Cola Company is doing well in general. The Coca-Cola Company falls in the nonalcoholic beverage industry. The ratio of the company has been compared with the overall industry ratio to determine if the Coca-Cola Company is doing well by meeting the average ratios. The company has recorded a significant rise of sales.
In the financial year of 2014, Coca-Cola managed to register a gross profit of 28, 109,000 dollars. After deduction of operational expenses, the company’s net income was 7,098,000 dollars. A global growth in volume of 2% and an increase in cash operations to 10.6 billion dollars were noted in the 2014 financial year.
The company realized a global volume growth of 2% and their cash operations increased to 10.6 billion dollars (The Coca-Cola Company, 2015). The company’s net operations revenue reduced from 46854 million dollars in 2013 to 45,998 million dollars in 2014. This reflected a 2% reduction in net operations revenue.
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