2. Group Members
Shaniquea Grant – Captain
Common Analysis
Bernadette Jean
Income Statement
Terri Gooden-Miller
Statement of Cash Flows
Renee Waldrop
Balance Sheet
3. About Coke
Coca-Cola history began in 1886 by an Atlanta
pharmacist, Dr. John S. Pemberton, he created
a flavored syrup, that was mixed with
carbonated water.
Dr. Pemberton’s partner Frank M. Robinson, is
credited with naming the beverage
“Coca-Cola”
Today, over 500 beverage brands are sold in
more than 200 countries.
4. Coca-Cola’s Misssion
Our Roadmap starts with our mission, which is
enduring. It declares our purpose as a
company and serves as the standard against
which we weigh our actions and decisions.
To refresh the world...
To inspire moments of optimism and
happiness.
To create value and make a difference
5. Coca-Cola’s Social Responsibility
• Coca-Cola contributes a percentage of pre-tax
profits to charitable foundations in assisting
various social projects.
• With the aid of the NGO, they launched a
number of projects focused on building
environmental awareness and preserving
nature.
6. Coca-Cola’s Expansion Efforts
• Coca-Cola also operates in highly competitive
markets in North America, Latin America,
Europe, Asia, Middle East and Africa
• Factors such as change in customer
preferences with regard to health also affects
the company in terms of profiteering.
7. Pepsi’s Impact on Economic Change
• Coca Cola continued to invest in new markets.
– Coca-Cola Company has become a partner with
Keurig Cold beverage system.
• Coca-Cola is the world's largest beverage
company.
– Under any market they will continue to survive.
8. About Pepsi
PepsiCo was established through the merger
of Pepsi-Cola and Frito-Lay.
Pepsi-Cola was created by the late 1890’s by
Caleb Bradham, a New Berm pharmacist.
Frito-Lay Inc was formed by the 1961 merger
of the Frito Company which was founded by
Elmer Doolin in 1932 and the H.W Lay
Company, founded by Herman W. Lay that
same year.
9. Pepsi’s Mission
Our mission is to be the world's premier
consumer products company focused on
convenient foods and beverages. We seek to
produce financial rewards to investors as we
provide opportunities for growth and
enrichment to our employees, our business
partners and the communities in which we
operate. And in everything we do, we strive
for honesty, fairness and integrity.
10. Pepsi’s Social Responsibility
PepsiCo have been practicing environmental
sustainability by finding innovative ways of
cutting costs and minimizing the impact on
the environment
PepsiCo, through their philanthropic efforts,
focus on human environmental focusing on a
safer workplace.
11. Pepsi’s Expansion Efforts
• The company puts in a wide range of
advertising and marketing strategies in order
to promote its large number of products and
boost profits.
• PepsiCo operates in highly competitive
markets in North America, Latin America,
Europe, Asia, Middle East and Africa
12. Pepsi’s Impact on Economic Change
• Despite its international presence, 52% of its
revenues originate in the US.
• This concentration does leave PepsiCo
somewhat vulnerable to the impact of
changing economic conditions, and labor
strikes.
• Large US customers could exploit PepsiCo’s
lack of bargaining power and negatively
impact its revenues.
13. Pepsi’s Impact on Economic Change
• Sales by Wal-Mart represent approximately
12% of PepsiCo’s total net revenue.
• Wal-Mart is PepsiCo’s largest customer.
– As a result PepsiCo’s fortunes are influenced by
the business strategy of Wal-Mart specifically its
emphasis on private-label sales which produce a
higher profit margin than national brands.
21. Comparative Analysis
Coca Cola 2013
Operating Revenues $46,834
**Which is $ 1,183 less than 2012
COGS $18,421
** A Percentage of 40% the revenue
Pepsi Co 2013
Operating Revenues $66,415
** Increase of $ 923
COGS $31,243
**47% of the revenue
Pepsi Cola is in a better position than Coca-Cola in term of
revenue
22. Two Components of Coca Cola
Revenue
• Beverage concentrates
– beverage bases,” and
syrups, including
fountain syrup
• Finished sparkling
– Refers “finished product
operations
23. Coca Cola Sales and Major Expenses
• Deductions from Revenue
– The aggregate deductions from revenue recorded
by the Company in relation to these programs,
including amortization expense on infrastructure
programs.
24. Advertising Costs
• Advertising costs included in the line item
selling, general and administrative expenses in
our consolidated statements of income were
$3.3 billion, $3.3 billion in 2013and 2012.
• As of December 31, 2013 and 2012,
advertising and production costs of $363
million and $295 million.
25. Shipping and Handling Costs
• Shipping and handling costs are incurred to
move finished goods from the sales
distribution centers to customer locations.
• Company recorded shipping and handling
costs of $2.7 billion and $2.8 billion,
respectively, in 2013 & 2012
26. Acquisitions
• The Company's acquisitions of businesses,
equity method investments and
nonmarketable securities totaled $353 million
Fresh Trading Ltd
During 2012, our Company's acquisitions of
businesses, equity method investments and
nonmarketable securities totaled $1,486 million.
Aujan Industries Company J.S.C
27. Divestitures
• During 2013, proceeds from disposals of
businesses, equity method investments and
nonmarketable securities totaled $872 million.
• These proceeds primarily included the sale of
a majority ownership interest in our
previously consolidated bottling operations in
the Philippines
28. Cash Flow
Coca-Cola
Operating Activities
Year 2013 2012
Total $8,626 $9,086
Pepsi
Operating Activities
Year 2013 2012
Total $9,688 $8,479
** Decrease of $460 M
Investing Activities
Year 2013 2012
Total $(4,214) $(11,404)
** Increase of $ 7190 M
** Increase $1,209 M
Investing Activities
Year 2013 2012
Total $(2,625) $(3,005)
** Increase $1,209 M
29. Cash Flow
Coca-Cola
Financing Activities
Year 2013 2012
Total $(3,745) $(3,347)
Pepsi
Financing Activities
Year 2013 2012
Total $(3,789) $(3,306)
** Decrease of $1,209 M Decrease of $483 M
End of Year Balance
Year 2013 2012
Total 10,414 $8,442
End of Year Balance
Year 2013 2012
Total $9,375 $6,297
** Increase of $1,972 M Increase of $3,078 M
30. Coca-Cola &
Pepsico
0
2000
4000
6000
Coca-Cola Pepsi
Dividend Payout
Dividend
Payout Both were able to cover
their dividends.
Both Companies have
been able to re-purchase
shares of both common
and preferred stock.
Both Coke and Pepsi have
substantial Cash Flow
0
2000
4000
6000
8000
10000
12000
Coca-Cola Pepsi
BOY Cash Flow
EOY Cash Flow
31. Coca Cola & Pepsico
Pepsi Co Long Term Debt
Debt Issued
Debt Received
Both Companies have
issues long term Debt, and
both companies received
no more that 10% back of
that debt.
Coca Cola’s long term debt
was to Green Mountain
Coffee. Coca-Cola
Acquired this company as a
new addition.
Pepsi’s long term debt was
to its subsidiaries (i.e. Frito
Lay and Quaker)
Coca-Cola Long Term Debt
Debt Issued
Debt Received
33. The Trend
Coca-Cola (in millions) Pepsi (in millions)
Acid-Test Ratio =
10,414 + 8,020 + 6,707
27,811
= .90 %
Acid-Test Ratio =
9,375 + 6,954 + 303
17,839
= .93 %
Debt to assets ratio =
56,615
90,055
= .63 %
Debt to assets ratio =
53,089
77,478
= .69 %
Debt to Equity Ratio =
56,615
33,440
= 1.70 %
Debt to Equity Ratio =
56,615
33,440
= 1.70 %
Usually when the acid test ratio is
1 or more the company has
financial integrity to pay its debts
However both companies
acid test ration is less
than 1.
Both companies debt to ratio are
less the 1 which means that most
of the company’s assets are
financed through equity so nether
of them are in danger in creditors
start to demand repayment of
debt
However Coca-Cola is in a
slightly better financial
situation than Pepsi.
34. The Trend
Company 2013 2012 2011
Coca-Cola
Long Term Debt $ 19,154 $ 14,736 $13,656
Pepsi
Long Term Debt $ 24,333 $ 23,544 $20,568
• Pepsi seem to have a higher Long term Debt than Coca-Cola each year
• Companies with too much long term debt will find themselves overwhelmed with
interest payments, a risk of having too little working capital, and ultimately,
bankruptcy.
• When debt shrinks and cash increases, the balance sheet is said to be "improving".
35. Pepsico Trends
PepsiCo reports operating income
of $9.705 million while Coca-Cola’s
operating income was $10.228
million.
Coca-Cola’s net income for 2013
was $8.584 million while PepsiCo
reported net income of $6.740
million.
Earnings per share for PepsiCo was
$4.37, while earnings per share for
Coca-Cola was $1.94
Cash dividends applied per
common share in PepsiCo was $1
million and Coca-Cola’s dividends
were $4. 969 million
36. Coca-Cola Trends
PepsiCo reports operating income
of $9.705 million while Coca-Cola’s
operating income was $10.228
million.
Coca-Cola’s net income for 2013
was $8.584 million while PepsiCo
reported net income of $6.740
million.
Earnings per share for PepsiCo was
$4.37, while earnings per share for
Coca-Cola was $1.94
Cash dividends applied per
common share in PepsiCo was $1
million and Coca-Cola’s dividends
were $4. 969 million
37. Who is the Better Investment?
• With its expansion in food, Pepsi is also growing into more homes
worldwide.
• Coke is a household name.
