Comparison of Pepsi and Coca Cola Financials

Price earnings ratio is a valuation ratio of a company's current share price compared to its per-share earnings. Coca-Cola has a lower P/E ratio than Pepsi Co. The industry average for P/E ratio is 21.1. This means neither of the companies beat the industry average ratio. Between the

Coca-Cola’s confidence in its domination over the soft drink industry eroded, and its advertising slogans began to recognize industry competition: “No Wonder Coke Tastes the Best”. While Coke’s slogans have always centered on the product, Pepsi’s advertisement emphasized the users of the product. Rather than targeting every market, Pepsi focused on the demographic environment. Pepsi foresaw the mass appeal of the youth generation for soft drinks and in 1961 divulged the successful slogan “Now, It’s Pepsi, for Those Who Think Young”. The campaign was such a success that Pepsi’s sales growth outperformed that of Coca-Cola.

The analysis of a company's financial statements helps in the determination of both the weaknesses and strengths of the concerned entity. Further, such an analysis helps in the determination of the future viability of firms. There are a wide range of techniques utilized in the analysis of financial statements. In that regard, it is important to note that the relevance of a horizontal, vertical as well as ratio analysis of a company's financial statements cannot be overstated. This is more so the case when it comes to the interpretation of the various dollar amounts presented in both the balance sheet and the income statement. In this text, I carry out a horizontal, vertical as well as ratio analysis of both The Coca-Cola Company and PepsiCo, Inc. The analysis' results will be critical in the evaluation of each company's performance. Findings will be used as a basis for recommendations on how each company can improve its financial status.

Coca Cola and Pepsi are the brands with the highest brand equities. Both, Coca Cola and Pepsi have gone through the highs and lows of their business to reach that position. Coca Cola’s marketing has been changing over time with more and more products being added every day, while Pepsi has implemented several smart marketing strategies to improve its turnover and profits. So, let’s see what were the marketing strategies implemented by Coca Cola and Pepsi.

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.

The company known as Coca-Cola today was started in September of 1919, but the first Coke brand was served as early as 1886. Since that time it has grown to be one of the most globally recognized brand names with a stock value of $167 billion. Coke’s plan has always been developed with the future in mind. Right away the company realized that it was more profitable to manufacture the concentrate used to make carbonated drinks than to bottle it. From that point on they saw the entire world, not simply the originating country, as their desired market. It seems only practical that the company should pursue this agenda until conquered then focus the effort on expanding into different product lines. This logical

The Coca Cola company is perceived to be the most famous trademark on the globe, and it is equally so. The company claims more than 400 brands that appeal to a wide range of individuals throughout the world. They are in a position to fulfill needs of every one of their buyers making their experience with their beverages a better one. The entity’s drinks entice a lot of people across all races, age, and gender. Coca Cola is outstanding for its overall popularity as its items are sold in over four hundred countries in the world, while major contenders like Pepsi are just available in very few countries. Such a competitive advantage has placed

Investors often look at utility companies for their high dividend yields and growth over time. Although a high dividend is something sought by investors in utility companies, a high payout ratio can represent a negative signal. The high FPL’s payout ratio gives the company little room for error; if earnings would be adversely impacted in the future the company would be faced with the possibility of not being able to pay the dividend.

Market value ratios are probably the most important ratios for any publicly traded company; it’s an indicator of how well the company is perceived as a whole. It reflexes how investors view the future performance and risks of the company. One such market value ratio that is used commonly is the cash flow per share ratio. This ratio is measured by taking the operating cash flow – preferred dividends divided by the common shares outstanding. This ratio is more reliable than the EPS or earnings per share ratio because it is less likely to be manipulated. Because of this the cash flow per share ratio is judged to be a better indicator of a company’s strength and position within the market. For 2013 Disney had the highest cash flow per share ratio amongst its competitors which was valued at 5.29. This was slightly better than Time Warner’s which was 4.04 and was significantly better than Fox’s 1.28.

Comparing financial data from statements can help determine whether or not it is a sound decision to invest in a company. This information can also help determine if a company is operating successfully and areas of risk within the company. This analyzing can help one company compare itself to another company and ensure that they are able to compete with other companies in their respective industries. PepsiCo and Coca-Cola are two major companies that make a majority of their money from producing and selling soft drinks. To compare these companies we are going to use vertical and horizontal analyses to see if these

Coca-Cola is the result of a patent medicine formulated in a small southern pharmacy over a hundred years ago. It has grown into a multibillion dollar international company. It also owns one of the most valuable brands in the world. Their Coca-Cola banner has won the world’s top brand 13 times on brand c-consulting firm Interbrand’s annual list (Fraser, 2012). In addition to its main product, Coke, the company owns over 3500 beverages. One of its core competencies is brand building. They have built their brand to have respectability and dependability. Their brand and logo are recognized all around the globe. It has actually become a new known on almost all households worldwide (RNWILKIN, 2009).

Pepsi Co started in 1965 and became one of the world 's highest end user product businesses with a number of important and precious trademarks (Bongiorno, 1996, p 70).

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.

PepsiCo and Coca-Cola are fierce competitors and according to their financial statements they are both healthy companies. Therefore I would invest in Coca-Cola if I had to make the decision because it has higher income, a stronger long-term debt to networking capital ratio, steadily rising net income per common share, and a climbing and high solvency ratio. PepsiCo still shows healthy growth and outperforms Coca-Cola in many areas. I will conduct a financial analysis of Coca-Cola and PepsiCo to identify their strengths and weaknesses, ultimately deciding which one is worth the investment.

Despite its relation to obesity and other health risk, soda still remains as a popular beverage in the United States, and upon other demographic groups. Amongst the lineup of refreshments, Pepsi and Coca-Cola are the most leading carbonated cola beverage brands around the world. Pepsi and Coca-Cola had been rivals when introduced respectively in the 1900s, trying to dominate the carbonated soft drink market. Through print ads and video ads, both brands were undergoing global advertising war trying to dominate each other. Between the two brands, Coca-Cola seem to be superior to Pepsi due to it’s creative advertisements that grabs consumer’s attention. Coca-Cola portrays rhetorical strategies within the advertisement to catch the audience’s attention by using ethos, pathos, and logos.