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Coke vs. Pepsi
Financial Management: Coke vs. Pepsi
BUS 508 – Business Enterprise
June 11, 2011
Financial Management: Coke vs. Pepsi
The purpose of this paper is to analysis companies Coke and Pepsi and determinate (a) which
company is better able to pay current liabilities (debt), (b) explain what profitability ratios can tell
about a company's performance and how that information would influence investing decisions, (c)
discuss which financial ratios to utilized while examining the company's most satisfied stockholders,
(d) create a list of financial–based guidelines that individuals should follow when selecting to invest
and (e) evaluate the single piece of non–financial data most important when deciding to invest or not
in a company....show more content...
However financial data clearly shows Pepsi performing better than Coke.
Exhibit 1 – Coca–Cola Co., profitability ratios
| | |Dec 31, 2010 |Dec 31, 2009 |Dec 31, 2008 |Dec 31, 2007 |Dec 31, 2006 |
| |Return on Sales (%) |
|[pic] |Gross profit margin |
|[pic] |Return on equity (ROE) |38.09 |27.52 |28.37 |27.51 |30.02 |
| |Return on Sales (%) |
|[pic] |Gross profit margin |
[pic] |Return on equity (ROE) |29.86 |35.38 |42.47 |32.83 |36.71 | |[pic] |Return on assets (ROA)
|9.27 |14.92 |14.29 |16.34 |18.85 | |
Financial Ratios and Investments
According to Dividend Growth Investor (2010), both company stocks are "dividend aristocrats as
well as major components of the S&P 500 index". Over time Pepsi has outperformed Coke by
delivering an average total return
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Coke Vs. Pepsi

  • 1. Coke vs. Pepsi Financial Management: Coke vs. Pepsi BUS 508 – Business Enterprise June 11, 2011 Financial Management: Coke vs. Pepsi The purpose of this paper is to analysis companies Coke and Pepsi and determinate (a) which company is better able to pay current liabilities (debt), (b) explain what profitability ratios can tell about a company's performance and how that information would influence investing decisions, (c) discuss which financial ratios to utilized while examining the company's most satisfied stockholders, (d) create a list of financial–based guidelines that individuals should follow when selecting to invest and (e) evaluate the single piece of non–financial data most important when deciding to invest or not in a company....show more content... However financial data clearly shows Pepsi performing better than Coke. Exhibit 1 – Coca–Cola Co., profitability ratios | | |Dec 31, 2010 |Dec 31, 2009 |Dec 31, 2008 |Dec 31, 2007 |Dec 31, 2006 | | |Return on Sales (%) | |[pic] |Gross profit margin | |[pic] |Return on equity (ROE) |38.09 |27.52 |28.37 |27.51 |30.02 | | |Return on Sales (%) | |[pic] |Gross profit margin | [pic] |Return on equity (ROE) |29.86 |35.38 |42.47 |32.83 |36.71 | |[pic] |Return on assets (ROA) |9.27 |14.92 |14.29 |16.34 |18.85 | | Financial Ratios and Investments According to Dividend Growth Investor (2010), both company stocks are "dividend aristocrats as well as major components of the S&P 500 index". Over time Pepsi has outperformed Coke by delivering an average total return Get more content on HelpWriting.net