Impact of Financial Crisis on Companies

1. Topic:
Impact of Financial Crisis on Company
Presented to: Miss Anam Imran
Presented by: Mateen Altaf
Class: MBA (B&F) 4th semester
Subject: Analysis of Financial Statement(8524)
mataltaf@hotmail.com
Allama Iqbal Open
University, Islamabad

2. Acknowledgment
First of all thanks to ALLAH, Who is most beneficent & the
most merciful, Whose blessings are abundant & favors are
unlimited.
It’s my pleasure to acknowledge the guidance and support of
my subject teacher Miss. “Anam Imran” for her endless
guidance.

3. Introduction
The Term financial crisis is applied to a variety of
situations in which some financial assets suddenly lose a
large part of their nominal value.
In the 19th and early 20th centuries, many financial crises
were associated with banking panics, and
many recessions coincided with these panics.

4. “An economic downturn caused by a shock in
the financial markets may define a financial
crisis. “
(Source: James Green, eHow Contributor)
The financial crisis affects almost everyone, including
those who never bought a home or invested a penny in
stocks or bonds.

5. Economic Bubbles:
The cause of an economic bubble is when the price of a group of
assets is much higher than their actual worth.
Main Elements and Effects of Financial
Crisis:
Bank Run:
When a bank suffers a sudden rush of withdrawals by depositors, this
is called a bank run. Banks lend out most of the cash they receive in
deposits.

6. Recessions:
Negative economic growth generally defines a recession. A financial
crisis is one factor that may cause a recession, primarily by means of a
fall in investment.
 Fall in investment lead to fall in employment
 Fall in employment lead to fall in consumer expenditure.
 This has a negative effect on the economy, as consumer expenditure
is usually the largest contributor to economic growth.

7. Case Study
Pepsi international is a world
renowned brand. It is a very well
organized multinational
company, which operates almost
all over the world.
They produce one of the best carbonated drinks in the world.
Pepsi is producing Cola for more than 100 years and it has
dominated the world market for a longtime.

8.  PepsiCo also said it would cut 3,300 jobs, or 1.8 percent
of its work force. The company's shares fell more than 4
percent in premarket trading.
 Net income fell to $1.58 billion, or 99 per share, which
ended Sept. 6, from $1.74 billion, or $1.06 per share, a
year earlier.

9. SWOT Analysis
Strength:
Large Market Share after crisis.
Threats:
Main Competitors of the company is Coca Cola.

10. Recommendation
Financial Crisis continue to occur from time to time and
Pepsi Co. has to make effective strategies that in future,
it doesn’t have to face any financial crisis.