FINANCIAL STATEMENTS ANALYSIS - COCA COLA AND PEPSI

Financial Statements Analysis - Coca Cola and Pepsi

PepsiCo UK & Coca-Cola U.S

The prime reason of this report is to identify and analyze the two superior businesses in the two different regions and supple drink industry and work out the strongest entertainer as an investment opportunity. PepsiCo UK & Coca-Cola U.S has been vying in the soft drink sector for over a century and both companies enjoy a high degree of emblem consciousness globally. Coca-Cola has, until lately, outpaced its number two competitor. I will contrast the two companies utilising the following criteria: comparative statistics and relevant figures affecting probability, key ratios.

Financial Analysis

Liquidity measurement ratio

The present ratio is a sign of the short-term debt-paying ability of a company. Usually, the higher the ratio, the more fluid the company is. Another interpretation of a high ratio is that the company is squatted on money and not buying into it wisely. PepsiCo's present ratio is 1.31 times, substantially higher than Coca-Cola's 0.92 times.

Liquidity measurement ratio

The present ratio is an sign of the short-term debt-paying ability of a company. Usually, the higher the ratio, the more fluid the company is. Another interpretation of a high ratio is that the company is squatted on money and not buying into it wisely. PepsiCo's present ratio is 1.31 times, substantially higher than Coca-Cola's 0.92 times.

Pepsi

Liquidity Ratios

12/26/2009

12/27/2008

12/29/2007

12/30/2006

Quick Ratio

0.98

0.77

0.68

0.78

Current Ratio

1.44

1.23

1.31

1.33

Net Current Assets % TA

9.57

5.61

6.93

7.58

Coca Cola

Liquidity Ratios

12/31/2009

09/30/2008

09/30/2007

09/30/2006

Quick Ratio

-

0.01

0.01

0.02

Current Ratio

1.01

1.17

1.05

1.54

Net Current Assets % TA

0.49

6.49

2.52

19.94

Profitability Indicator Ratios

PepsiCo's return on equity (ROE) is 34.0%, well overhead the commerce (30.7%) and the S&P 500(21.0%). Coca-Cola's ROE is 27.0% versus the commerce (30.7%) and the S&P 500(21.0%).Coca-Coca is not consigning as much worth to stockholders as PepsiCo. PepsiCo's overseas partnerships and acquisitions are adding significantly to shareholder value (Ongkrutaraksa, 2006). The ratio of snare earnings to total assets assesses the come back on total assets (ROA) after interest and taxes. PepsiCo's 5 year ROA is 15.89%, somewhat higher than the industry's 14.70%. Coca-Cola fares better one time again, 16.37% versus the industry's 14.70%.

Aassisting factor here may be PepsiCo's reliance on long-term debt to double-check proceeded growth. Here's a fast evaluation: PepsiCo's long-term debt is identical to 24.3% of its total liabilities. Coca-Cola's long-term liability is identical to 15.3% of total liabilities. This means that Coca-Cola is much less susceptible to adverse components such as inflation, recession or war (Jackson, 2001).

Pepsi

Profitability Ratios

12/26/2009

12/27/2008

12/29/2007

12/30/2006

ROA % (Net)

15.72

14.6

17.58

18.35

ROE % (Net)

41.25

35.15

34.8

38.2

ROI % (Operating)

35.85

33.3

36.29

34.3

Calculated Tax Rate %

27.22

28.27

27.9

21.14

Coke

Profitability Ratios

12/31/2009

09/30/2008

09/30/2007

09/30/2006

ROA % (Net)

(8.76)

5.31

(15.41)

(2.54)

ROE % (Net)

(16.14)

10.67

(30.01)

(5.75)

ROI % (Operating)

(7.1)

13.06

(12.54)

2.44

Calculated Tax Rate %

0.62

0.74

0.61

0.59

Investment Valuation Ratio

Price/earnings (P/E) ratios are higher for firms with powerful growth prospects, other things held unchanging, but they are smaller for riskier firms. PepsiCo's P/E ratio is 19.7 times, which is smaller than the commerce (21.1) and the S&P 500(19.8). Coca-Cola has a higher ratio here, 22.1 times, which beats the industry (21.1) and the S&P 500(19.8). Both of these businesses are in the beverage manufacturing industry, which has been a tough industry to be in for the past ten ...