Coca-Cola and Pepsi Pension

Coca-Cola Company is an American multinational beverage corporation headquartered in Atlanta Georgia. It is best known for its flagship product Coca-cola. The company offers more than 500 brands in over 200 countries and serves over 1.7 billion servings per day. The company’s stock is listed on the NYSE and it is a part DJIA, S&P index and the Russell 1000 index. The company had revenues of $48.01 billion in the year 2012 and a net income of $9.01 billion. Coca-cola has a total asset base of 86.17 billion and 146200 employees worldwide. Coca-Cola’s current chairman and chief executive is Muhtar Kent.

The rate of growth for PepsiCo has been pretty much more as compared to that of Coca Cola. The rate of increase in revenue of both the Coca Cola and PepsiCo was 6.26% and 11.11% respectively. In 2004, the cost of goods sold was $11031 while it was $12314 in the year 2005. The increased in sales lead to an increase in the cost of goods sold. In comparison to 2004’s data, the cost of goods sold stood at 111.63%. On the other hand Coca Cola had the cost of goods sold in 2004 at $7674 and in 2005 at $8195; and if seen in terms of percentages, for Coca Cola, the total cost of goods sold was $ 106.79%, which shows that an increment of 6.79% was seen in the year 2005 as compared to that of 2004.

When determining which company has the most to offer it is necessary to look at each set of numbers from several different views. For instance this paper will cover vertical and horizontal analysis, profitability, solvency, and liquidity ratios. I will be explaining how each set of results play into the decision making of which company would be best to invest in, by comparing both companies numbers in able to collect the necessary data to make a calculated decision.

For pensions and post-retirement accounting methods to recognize the benefit costs, estimates and assumptions on future events ascertaining the timing and amount of benefits payments must be sought first. This paper seeks to compare and contrast the early historical accounting for pensions and post-retirement healthcare and life insurance benefits with the rules and guidance applied today in addition to the changes to such guidance and rules that would improve the accounting and reporting of such benefits depending on the business and political changes and as such, predict the effect of such changes on financial reporting and accounting practices.

In 2008, Coca-Cola accorded $149 million in terms of pension plans and $23 million was discretionary. Their cash benefits for medical reasons in connection with pension were approximated to be $100 million in 2009 although their pension rate in that year plunged too somewhat due to the recession. Their medical plans are funded on a pay-as-you-go basis.

Performing a financial analysis is very useful for any businesses to enhance the knowledge of performances, strengths and stability of their financial. This paper intends to compare and contrast the qualitative and financial statements of the past three years of the Multinational companies of soft drinks, Coca-Cola and PepsiCo. Currently, both companies are business competitors and they highly regard their customer’s base loyalty. To familiarize ourselves with these two successful companies, we have to focus on their differences. Coca-Cola was founded in 1886, nowadays is available in more than 200 countries being the most popular beverage with its 94% worldwide recognition and being world’s third valuable brand.

What I find to be the biggest indicator of concern is that PepsiCo’s profitability is currently declining, despite its ever-increasing sales figures. It has lost 2% on both its profit margin, and return on assets. The return on common stockholder’s equity, has dipped by 4%, and they lost $.02 over every dollar invested in assets in 2005. This goes back to my assessment of their sales and net income figures. Here again, I see indications that their spending has increased dramatically, which is having a negative impact on profitability. Since the soft drink industry is a high-volume, low-overhead industry, controlling and minimizing expenses is of paramount importance. I find this trend to be very troubling, considering PepsiCo’s sales haven’t stopped climbing, yet they are starting to lose their profitability. Should their sales dip, they will be very hard put to maintain themselves.

An official financial analysis for a specific company needs two years of financial data from the company and from a competitor in the same industry. This financial analysis is between PepsiCo, Inc. and Coca-Cola. Pepsi and Coca-Cola dominate the beverage market worldwide. In addition to sodas, they also distribute a variety of water and energy drinks. Based on the analysis, the investor will be able to make a better investment choice.

Currently, The Coca-Cola Company has cost of equity of 3.39% meaning investors require return of 3.39% for their investments in Coca-Cola.

The political situation of a country affects its economic settings and economic environment affect the business performances. Coca-Cola sales are impacted by a set of economic factors that beyond are beyond the company’s control. These factors include the level of economic growth in the country and in the industry, tax rates and currency exchange rates, interest rates, labor costs and others. The global economic and financial crisis of 2007 – 2009 is a relevant example of an economic factor that greatly impacted the majority of businesses around the globe. However, the crisis has impacted Coca-Cola to a lesser extent compared to many other businesses. Its’ operating margin remained at industry-front 22% despite the crisis, although dividend yield was reduced to 2.6 % Quarts. (Timmons, H. (2014). Economic factors relate to goods, services, and money. Despite directly affecting businesses, these variables refer to financial state of the economy on a greater level –whether it be local or global, inflation increases cost of production. Consequently, Coca-Cola had to face the uncontrollable problem of increasing their pricing. With this increase they risk losing customers who cannot afford their products because it is a desired product not a necessity. Due to inflation in 11 years the price of an identical bottle of Coca Cola has doubled in price. Alternatively, Coca Cola could be forced to lower their prices to facilitate an increase in consumption

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.

The Coca-Cola Company is a strong multinational company with a well-established trademark that has done well since 1886. The company has improved its marketing strategies to satisfy customers in a better way. Since its establishment, it has effectively differentiated itself by being considered as the largest manufacturer, marketer, and distributor of non-alcoholic syrups

The Coca Cola Company is a multinational company with more than 140,000 employees, the company is in beverage business and its flagship product Coca Cola is considered one of the best soft drink. Coca Cola soft drink is the real revenue generator of the Coca Cola Company. The company was found in 1892 and by 2010 it was reported that the company has the serving of 1.7 billion per day so the company has only grown since its inception. The company is serving its product in more than 200 countries, and the Coca Cola Company owns more than 500 brands, this shows that the graphs of the company is moving upwards and the Coca Cola Company is growing at an immense rate.

“Coca-Cola brands are available to consumers throughout the world. Today they account for 1.7 billion servings of all beverages consumed worldwide daily. Coca-Cola has the edge in the market and because they are first to capitalize on new consumer trends. They continue to focus on continuous operating improvements, and they are ever changing to meet market demands. Pepsi Co satisfies the needs of its customers with the wide variety of products offered. They also have the different type of beverage or snack and its brands can substitute for each other. Coco-Cola and Pepsi Co is known as the top 100 most valuable brands in the world.

In this assignment, is to study Coca-Cola to evaluate the Coca-Cola with the Performance Management and Appraisal.