REVIEW OF FINANCIAL STATEMENTS

Review of Financial Statements

Review of Financial Statements

Introduction

I have selected two of America's most established and well known companies ever, Coca-Cola and Pepsi, on which to conduct a review of financial statements. These two companies combined have been in business 230 years. Coca-Cola and Pepsi have come to dominate the global market with their products. They both have production plants in every major country on this planet. This paper will provide a brief overview of each company, which includes when the companies were established, what product and services these two companies provide, and which accounting firms audit these two company's financial statements. This paper also identifies the four types of financial statements that are utilized by these two publicly traded companies. Finally this paper defines the basic accounting concepts, terminologies, and transactions of the company's financial statements.

Company Overviews

Coca-Cola originally started with soft drinks and now their product list is endless with foods and drinks. Coca-Cola has been in business for over 120 years and is still successfully growing. Like Coca-Cola, Pepsi is just as successful. Pepsi has been successfully growing for the past 110 years now. Pepsi also provides a great selection of soft drinks, Frito Lay snacks, sports drinks, Quaker foods, and many more. Coca- Cola was established over 120 years ago by a man named Dr. John Pemberton. It was a “one man” business, which became one of the world's largest companies. Coke originally started here in the US, selling a glass of coke for $.05. Coke started getting its fame in the US when it was discovered that soda drinks are good for people's health. Shortly after Coca- Cola was introduced to America, Pepsi entered the market and became established in 1898; Pepsi stared with soft drinks as well. Pepsi is standing very close to Coke with its products and sales around the world.

Coca Cola has been competing for customers since Pepsi went into business. Soda drinkers always have a preference on the type of cola they drink. A major factor in getting a customer to buy a product is the marketing of a company. Based on a survey conducted last year, consumers preferred Coca Cola to Pepsi. The consumers that preferred Coca Cola were influenced by the products taste. Both Coca Cola consumers as well as Pepsi consumers were loyal to their product of preference. In both cases, these consumers have consumed Coca Cola and Pepsi for over 20 years. Consumers did say that if they did not have a choice and Pepsi was their only other alternative, then they would switch to Pepsi. Of those surveyed, the younger generation prefers the sweeter taste of Pepsi to the crisp flavor of Coca Cola. If we were to recommend the merging of these two companies, we would begin by conducting a financial comparison of two publicly traded companies.

Both companies are being audited by the best accounting firms in the world. Coca-Cola is being audited by Ernst & Whinney since the 1920's, and Arthur Young's account firm ...