This document compares the financial position of Coca Cola and Pepsi through ratio analysis. It provides balance sheet and profit and loss statements for both companies for the quarter ending June 27, 2014. It then calculates and compares various ratios between the two companies to analyze their profitability, liquidity, turnover, and solvency. Key ratios show Coca Cola has a higher return on investment and return on assets, while Pepsi has higher revenue, gross profit ratio, and current ratio. In conclusion, while Pepsi earns more profit, Coca Cola provides a better return on investment.

1. Ratio analysis
coca cola & pepsi

2. ▪ The beverage industry is a major driver of economic growth.
▪ A national council of applied economic research (NCAER) study on
the carbonated soft –drink industry indicates that this industry has an
output multiplier effect of 2:1.
▪ In the comparative analysis of Coca Cola and Pepsi my main
emphasis is on the financial position of both companies

3. Classification of ratio
▪ Profitability ratios
▪ Liquidity ratios
▪ Turnover ratio
▪ Solvency ratio

4. Balance sheet coca cola for quarter
2762014
Current Assets
Cash and Cash Equivalents $356,000
Short-Term Investments $0
Net Receivables $2,199,000
Inventory $488,000
Other Current Assets $252,000
Total Current Assets $3,295,000
Long-Term Assets
Long-Term Investments $0
Fixed Assets $2,304,000
Goodwill $122,000
Intangible Assets $4,048,000
Other Assets $399,000
Deferred Asset Charges $0
Total Assets $10,168,000
Current Liabilities
Accounts Payable
$2,443,000
Short-Term Debt / Current Portion
of Long-Term Debt
$423,000
Other Current Liabilities $0
Total Current Liabilities $2,866,000
Long-Term Debt $4,053,000
Other Liabilities $226,000
Deferred Liability Charges $1,113,000
Misc. Stocks $0
Minority Interest $0
Total Liabilities $8,258,000
Stock Holders Equity
Common Stocks $4,000
Capital Surplus $3,916,000
Retained Earnings $1,763,000
Treasury Stock ($3,482,000)
Other Equity ($291,000)
Total Equity. $1,910,000
Total Liabilities & Equity $10,168,000

5. Quarter Ending:
Total Revenue $2,333,000
Cost of Revenue $1,487,000
Gross Profit $846,000
Operating Expenses:
Research and Development
Sales, General and Admin $551,000
Non-Recurring Items
Other Operating Items
Operating Income $295,000
Add'l income/expense items $1,000
Earnings Before Interest and
Tax
$296,000
Earnings BeforeTax $266,000
IncomeTax $68,000
Minority Interest 0
Equity Earnings/Loss
Unconsolidated Subsidiary
0
Net Income-Cont. Operations $198,000
Net Income $198,000
Net Income Applicable to Common
Shareholders
$198,000
Profit and loss

6. ballance sheet pepsi for quarter
2762014
Current Assets
Cash and Cash Equivalents $7,607,000
Short-Term Investments $3,692,000
Net Receivables $8,470,000
Inventory $4,194,000
Other Current Assets $1,832,000
Total Current Assets $25,795,000
Long-Term Assets
Long-Term Investments $1,902,000
Fixed Assets $18,174,000
Goodwill $16,457,000
Intangible Assets $15,790,000
Other Assets $2,315,000
Deferred Asset Charges $0
Total Assets $80,433,000
Current Liabilities
Accounts Payable $12,986,000
Short-Term Debt / Current Portion of
Long-Term Debt
$7,242,000
Other Current Liabilities $0
Total Current Liabilities $20,228,000
Long-Term Debt $25,606,000
Other Liabilities $4,927,000
Deferred Liability Charges $6,072,000
Misc. Stocks ($133,000)
Minority Interest $129,000
Total Liabilities $56,829,000
Stock Holders Equity
Common Stocks $25,000
Capital Surplus $3,978,000
Retained Earnings $47,748,000
Treasury Stock $0
Other Equity ($28,147,000)
Total Equity $23,604,000
Total Liabilities & Equity $80,433,000

7. Profit and loss
Total Revenue $16,894,000
Cost of Revenue $7,778,000
Gross Profit $9,116,000
Operating Expenses
Research and Development $0
Sales, General and Admin. $6,198,000
Non-Recurring Items $0
Other Operating Items $22,000
Operating Income $2,896,000
Add'l income/expense items $18,000
Earnings Before Interest and Tax $2,914,000
Interest Expense $209,000
Earnings Before Tax $2,705,000
IncomeTax $718,000
Minority Interest ($9,000)
Equity Earnings/Loss Unconsolidated
Subsidiary
$0
Net Income-Cont. Operations
$1,978,000
Net Income
$1,978,000
Net Income Applicable to Common
Shareholders
$1,978,000

8. PROFITABILITY RATIO
COCA COLA PEPSI
RETURN ON INVESTMENT=
NET OPERATING PROFIT / CAPITAL EMPLOYED * 100
ROI=
296000
1910000
*100=15.49%
ROI=
2,914,000
60205000
*100=4.8%

9. PROFITABILITY RATIO
COCA COLA PEPSI
RETURN ON SHARE HOLDER’S FUND=
PAT / SHARE HOLDER FUND
198000
1910000
*100=10.36% 1,978,000
23,604,000
*100=8.37%

10. PROFITABILITY RATIO
COCA COLA PEPSI
RETURN ON ASSET=
PAT / TOTAL ASSETS *100
198000
10168000
*100=1.94% 1,978,000
80,433,000
*100=2.45%

11. PROFITABILITY RATIO
COCA COLA PEPSI
GROSS PROFIT RATIO=
GROSS PROFIT / SALES *100
846000
2333000
*100=36.26% 9,116,000
16,894,000
*100=53.95%

12. PROFITABILITY RATIO
COCA COLA PEPSI
NET PROFIT RATIO=
PROFIT AFTERTAX / TOTAL ASSET *100
198000
2333000
*100=8.48% 1,978,000
80,433,000
*100=2.45%

13. TURNOVER RATIO
COCA COLA PEPSI
CAPITALTURNOVER RATIO=
NET SALES / CAPITAL employed
2333000
7302000
=.31 16,894,000
60205000
=.2806

14. TURNOVER RATIO
COCA COLA PEPSI
FIXED ASSETS TURNOVER RATIO=
NET SALES / FIXED ASSETS
2333000
2304000
=1.0125 16,894,000
18174000
=.9295

15. TURNOVER RATIO
COCA COLA PEPSI
WORKING CAPITAL TURNOVER RATIO=
NET SALES / WORKING CAPITAL
2333000
429000
=5.43:1 16,894,000
5567000
=3.4:1

16. Test of liquidity/ solvency ratio
Coca cola company 2014
Current assets 3,295,000
Current liabilities 2,866,000
inventory $488,000
Pepsi company 2014
Current assets 21601000
Current liabilities $20,228,000
inventory 4,194,000

17. Title and Content Layout with Chart
1.06
1.27
0.97
1.14
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1 2
ChartTitle
pepsi coca cola
Test of liquidity pepsi Coca cola
Current ratio 1.27 1.14
Quick ratio 1.06 .97

18. Long term solvency ratio
COCA COLA PEPSI
Debt-Equity ratio =
= Debt/ Equity
25,606,000
23,604,000
=1.08:1
4,053,000
1,910,000
=2.12:1

19. ANALYSIS
▪ ROI OF coca cola is higher than Pepsi .Through Net operating profit of
Pepsi is higher but cola has less capital employed
▪ Return on investment is higher in coca cola .Through operating profit
is less than Pepsi but shareholder fund is less

20. conclusion
▪ Pepsi is earning more profit and and good return on investment in it
providing good value to the share holder

21. Thank you