Analysis of the Accounting Policies of Pepsico as Compared to Coca Cola

The annual report is the greatest important method for it to convey itself to potential investors. Such as, it would come as no surprise that an annual report helps to present the company in the best light possible without violating any Securities and Exchange Commission (SEC) regulations. Unfortunately, many investors read annual reports but fail to read them effectively. In other words, while annual reports are clearly prepared without any intent to deceive or reflect dishonesty about the business, investors should always read them with a sense of skepticism. In other words, learn how to read between the lines and decipher the actual condition of the company. Oftentimes, essential components of

This is a financial comparison between Pepsi and Coca Cola in terms of company liquidity, solvency, asset management, profitability, and valuation between the years 2008 and 2009 respectively.

We do not use the floatation cost here, since retained earnings are internally generated and not to be raised.

The productive assets of property, plant, and equipment changed dramatically in 1996 they were 5,581 to 2010 an increase to 21,706. In total current assets there was a increase in 1996 from 5,910 to in 2010 21,579. Another significant change is in long term debt in 1996 of 1,116 to in 2010 an increase to 14,041. Also an important figure to note is in the retained earning in 1996 they were 94% (15,127) to 2010 68%

Coca-Cola is a leading beverage industry in the United States and many other countries in the world. PepsiCo is also a leading worldwide beverage company, but they are also the parent company of the Frito-Lay and Quaker Oats Companies. This makes PepsiCo a leader in the beverage, snack and cereal industries. As consumers, we have indulged in their products for many years. My personal preference has always been Pepsi over Coke, which is why I was very interested in conducting this analysis. Regardless of the results, I will always seek out a Diet Pepsi over a Diet Coke and so will many of my physician friends at Children’s Hospital who start their mornings with a Diet Pepsi. These personal preferences are what contributes to a company’s profits through net sales. However, the key performance measurement tools used are not based on sales alone. Calculating liquidity, solvency, and profitability ratios on a regular basis give us a better insight on the performance and overall health of a company.

As mention before, Coca-cola has 47.3 percent market share in the country’s cola market versus Pepsi which hold 44.5 percent. Coca-cola is also the brand known around the worlds, which are the largest producer and distributor of ark colas in the world. Even in the current monetary crisis, the company continues to expand and the financial position shows that Coca-cola has a strong cash position in compare to PepsiCo which the long term debt of PepsiCo is so high.

Although PepsiCo’s current assets grew their current liabilities also grew, which leads me to believe that Coca-Cola is more poised to grow as a company in the future. I believe there is room for both of these companies to fix their financial status in these areas. PepsiCo needs to find a way to increase their current assets without raising their current liabilities and Coca-Cola need to find a way to increase their current assets while maintaining their steady drop in current liabilities.

PepsiCo’s corporate strategy had diversified, in 2008, the company into salty and sweet snacks, soft drinks, orange juice, bottled water, and ready-to-eat drink teas and coffees, purified and functional waters, isotonic beverages, hot and ready-to-eat breakfast cereals, grain-based products, and breakfast condiments. Strategies that kept their brands at the top were tied to new product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. A new element of PepsiCo’s corporate strategy was product reformulations to make snack

The Coca Cola Company is leading Beverage Company in the world, serving more than 200 countries. In the last quarterly and full year report for 2014 The Coca Cola Company reported the following number: “Global volume growth of 2% for the full year and 1% in the quarter, net revenues declined 2% in the quarter; excluding the impact of structural items, comparable currency neutral net revenues grew 4% ,there was also a change in the global value share when it came to nonalcoholic ready-to-drink beverages in both the quarter and full year and Lastly they were able to report in the full-year that what they earned in cash from their operations had increased to $10.6 billion.” In this paper we will explain how The Coca Cola Company reported debt

For the year 2007 the total asset was $423,504 and total equity is $302,115 which is equal to 28.6%. This is not bad for any company but considering the Banks point of view it would be a lot better if it was higher that 30%.

Pepsi revenue recognition policy was compared to their competitor Coke to determine if Pepsi uses an accounting method that would inflate their earnings. Pepsi states, “we recognize revenue upon shipment or delivery to our customers based on written sales terms that do not allow for a right of return” (p. 73). Pepsi revenue recognition method is similar to Coke. Coke states, “we recognize

PepsiCo is a multinational food and beverage company. Operating in over 200 countries, it is the second largest company of its kind in the world. It can be systemized into four divisions, PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe and PepsiCo Asia, Middle East and Africa. Furthermore PepsiCo is organized into six reportable segments, which are, Frito-Lay North America, Quaker Foods North America, Latin America Foods, PepsiCo Americas Beverages, Europe, and PepsiCo Asia, Middle East and Africa.

This is separated from cash that organization's franchised containers spend in updating their plants this has added to generous picks up in the business sector. In Colas, Pepsi is as of now market pioneer and in specific urban communities like Banaras , Pepsi outlets are on one side & the various Colas set up together on the other. While Coke official scruff at Pepsi's cases and also targets, industry onlookers are of the perspective that Pepsi has most likely stolen a considerable measure from its rival Coke.

First, the profit bottom line takes into account the typical balance sheet of assets minus liabilities to track equity and income statements. Coca-Cola’s 2016 Annual Report on Form 10-K displays every detail down from Income and Comprehensive Income Statements and Balance Sheets to Cash Flows and Shareowner’s Equity Statements. These reports account for the company’s revenues, gross profits, operating income, taxes, and consolidated net income. This report breaks down into operating segments by product and service for finer details of concentrate beverages sold and the historical data from previous years to show a positive trend analysis by geographically location in the United States and International. With profits, there are always a few losses and Coca-Cola is no exception to this reporting numerous losses over the years listed by year, loss amount, location, and a comprehensive explanation for shareholders to read (pp.

Coca Cola is the largest company of the non-alcoholic beverages industry, controlling about 40% of the industry, followed by Pepsi with 20% control (Maverick 2015). Both companies are fully international, with a presence in over 200 countries, and are composed of numerous brands. Coca Cola, for example, owns about 500 brands, although the largest part of its profits stems from 21 of these brands. Overall, in 2016, the global non-alcoholic beverages industry was valued at $967.3 billion (Grand View Research 2017). Other key players in the industry include Nestle, Kraft Heinz Company, and the Pepper Snapple Group.