131603466 Working Capital Management of PEPSICO Sudhir Project

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WORKING CAPITAL MANAGEMENT

PROJECT REPORT

Submitted in partial fulfilment of the requirement for the award ofTwo year full time, Masters in Business Administration.

By

Sudhir Kumar

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

(!!"#!$!%

A&')*+,d-,m,.

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Summer Project-2009 Working CapitalManagement

Whatever we do and whatever we achieve during the course of our limited life

is ust not done only by our own efforts, but by efforts contributed by other

people associated with us indirectly or directly. ! than" all those people who

contributed to this from the very beginning till its successful end.

! sincerely than" Mr/ A0hu.)0h A--ar*a+ (A&&)u. E1,&u.i2,3 P,40iC)3

Phi++aur%3 person of amiable personality, for assigning such a challenging

proect wor" which has enriched my wor" e#perience and getting me

acclimati$ed in a fit and final wor"ing ambiencein the premises of PEPSICO.

! ac"nowledge my gratitude to M0/ Har5,,. Kaur (L)2,+6 Pr)7,00i)a+

Ui2,r0i.6%3 for her e#tended guidance, encouragement, support and reviews

without whom this proect would not have been a success.

%ast but not the least ! would li"e to e#tend my than"s to all the employees at

&'&S!() *Aradhna +rin"s Beverages &vt. %td- and my friends for their

cooperation, valuable information and feedbac" during my proect.

TA8LE OF CONTENTS

$/ ''(/T!0' S/MMA12 345

Lovely Professional University2


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/ %!T'1AT/1' 1'0!'W 64789/ AB)/T T9' ()M&A:2 7;48

c. (ompany %eadership 7- describes that the effect of

wor"ing capital management on firm profitability. !n accordance with this aim, to consider

statistically significant relationships between firm profitability and the components of cash

conversion cycle at length, a sample consisting of !stanbul Stoc" '#change *!S'- listed

manufacturing firms for the period of 7


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The research done by, Appuhami, 1anith B A, FThe !mpact of irmsH (apital '#penditure on

Wor"ing (apital ManagementI An 'mpirical Study across !ndustries in ThailandG ,

!nternational Management 1eview,*8??>-, The purpose of this research is to investigate the

impact of firmsH capital e#penditure on their wor"ing capital management. The author used

the data colleted from listed companies in the Thailand Stoc" '#change. The study used

Shulman and (o#Hs *73- :et %iquidity Balance and Wor"ing (apital 1equirement as a

pro#y for wor"ing capital measurement and developed multiple regression models. The

empirical research found that firmsH capital e#penditure has a significant impact on wor"ing

capital management. The study also found that the firmsH operating cash flow, which was

recogni$ed as a control variable, has a significant relationship with wor"ing capital

management.

The research done by, 9ardcastle C., FWor"ing (apital ManagementG,*8??6- describes that

Wor"ing capital, sometimes called gross wor"ing capital, simply refers to the firmHs total

current assets *the short4term ones-, cash, mar"etable securities, accounts receivable, and

inventory. While long4term financial analysis primarily concerns strategic planning, wor"ingcapital management deals with day4to4day operations. By ma"ing sure that production lines

do not stop due to lac" of raw materials, that inventories do not build up because production

continues unchanged when sales dip, that customers pay on time and that enough cash is on

hand to ma"e payments when they are due. )bviously without good wor"ing capital

management, no firm can be efficient and profitable.



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The research done by, Tha&ha44i++6 ., FWor"ing (apital Management Manages low of

undsG,*8??


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The research done by,M&C+ur, 8/3 @Wor"ing (apital Wor"sG describes that (ash is the

lifeline of a company. !f this lifeline deteriorates, so does the companyHs ability to fund

operations, reinvest and meet capital requirements and payments. /nderstanding a

companyHs cash flow health is essential to ma"ing investment decisions. A good way to

udge a companyHs cash flow prospects is to loo" at its wor"ing capital management

*W(M-.(ash is "ing, especially at a time when fund raising is harder than ever. %etting

it slip away is an oversight that investors should not forgive. Analy$ing a companyHs

wor"ing capital can provide e#cellent insight into how well a company handles its cash,

and whether it is li"ely to have any on hand to fund growth and contribute to shareholder

value.

The research done by, ass +., F9ow To !mprove Wor"ing (apital ManagementG *8??5-

L(ash is the lifeblood of businessL is an often repeated ma#im amongst financial

managers. Wor"ing capital management refers to the management of current or short4

term assets and short4term liabilities. (omponents of short4term assets include

inventories, loans and advances, debtors, investments and cash and ban" balances. Short4

term liabilities include creditors, trade advances, borrowings and provisions. The maoremphasis is, however, on short4term assets, since short4term liabilities arise in the

conte#t of short4term assets. !t is important that companies minimi$e ris" by prudent

wor"ing capital management.

The research done by, Maynard '. 1afuse, F Wor"ing capital managementI an urgent need to

refocusG Management +ecision, *7


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The research done by, Thomas M. @rueger, FAn Analysis of Wor"ing (apital Management

1esults Across !ndustriesG American Cournal of Business, *8??3- found distinct levels of

W(M measures for different industries, which tend to be stable over time. Many factors help

to e#plain this discovery. The improving economy during the period of the study may have

resulted in improved turnover in some industries, while slowing turnover may have been a

signal of troubles ahead. )ur results should be interpreted cautiously. )ur study ta"es places

over a short time frame during a generally improving mar"et. !n addition, the survey suffers

from survivorship bias only the top firms within each industry are ran"ed each year and the

composition of those firms within the industry can change annually.



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P,40iC)is a world leader in convenient foods and beverages, with 8??> revenues of more

than N 7;6,??? employees.

The company consists of rito4%ay :orth America, &epsi(o Beverages :orth America,

&epsi(o !nternational and Dua"er oods :orth America. &epsi(o brands are available in

nearly 8?? countries and territories and generate sales at the retail level of about N


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ORIGIN

!t was first introduced in :orth (arolina in 7> by (aleb Bradham, who made it at his

pharmacy which sold the drin". @nown bac" then as LBradHs +rin"L, it was later named &epsi

(ola possibly due the digestive en$yme pepsin and "ola nutsused in the recipe. Bradham

sought to create a fountain drin" that was delicious and would aid in digestion and boost

energy.

!n 7


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Ri0,

+uring the reat +epression, &epsi gained popularity following the introduction in 7


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COMPANY PROFILE

P,40iC)3 I&)r4)ra.,d

T64, Pu+i&(NYSE PEP%

F)ud,d $>< Mi++i) USD(!!"%

O4,ra.i- i&)m, $$:> Mi++i) USD(!!"%

N,. i&)m, $


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MISSION ? VISION

At &epsi(o, we believe being a responsible corporate citi$en is not only the right thing to do,

but the right thing to do for our business.

MISSION

)ur mission is to be the worldEs premier consumer products focused on convenient foods and

beverages. We see" to produce financial rewards to investors as we provide opportunities for

growth and enrichment to our employee, our business partners and the communities which

we operate. And in everything we do, we strive for honestly, fairness and integrity.

VISION

F&epsi(o responsibility is to continually improve all aspects of the world in which we

operate environment, social, economic creating a better tomorrow than todayG.

)ur vision is put in to action through programs and a focus on environmental stewardship,

activities to benefit society, and a commitment to build shareholder value by ma"ing &epsi(o

a truly sustainable company.



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COMPANY LEADERSHIP

We are a company full of strong, talented individuals starting at the top of our organi$ation.

et to "now the inspiring people helping lead &epsi(o on its H&erformance with &urposeH

ourney.

LTogether we are all building on the platform of human, environmental and talent

sustainability while continuing to deliver great results.L

INDRA K/ NOOYi

(hairman and (')

Lovely Professional University

Idra K/ N))6i

Chairma ad CEO

Ma00im) F/ dAm)r,

CEO P,40iC)

Am,ri&a0 8,2,ra-,0

J)h C/ C)m4.)

CEO P,40iC)

Am,ri&a0 F))d0

Mi&ha,+ D/ Whi.,

CEO P,40iC) I.+/

? Vi&, Chairma3

P,40iC)

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&epsi(o owns five different billion4dollar brands. These are P,40i3Tr)4i&aa3 Fri.)#La63 ua',r3 ad Ga.)rad,.

Th, &)m4a6 )*0 ma6 ).h,r rad0 a0 *,++/

/&epsi, including/

&epsi4(ola, (affeine4ree &epsi, +iet &epsiO&epsi %ight, (affeine4ree +iet &epsi,

(affeine4ree &epsi %ight,Wild (herry &epsi,&epsi %ime,&epsi Ma#,&epsi Twist

and &epsi ):'.

)ther /.S. carbonated soft drin"s including rawg, Mountain +ew, Mug 1oot Beer,

Sierra Mistand Tropicana Twister Soda

6 /p *international distribution-

)ther /.S. beverages including Aquafina*lavour Splash, Alive, and TwistOBurst-,

+ole, atorade, Mountain +ew AM&, &ropel itness Water, SoBe,Dua"erMil" (hillers,

Ben CerryHsMil"Sha"es, and Tropicana

/Beverages mar"eted outside the /.S /.I Alvalle, (oncordia, (opella, 'vervess,

iesta, ruiH0ita, ru"o, @as, %oP$a, Man$anita Sol, Mirinda,&aso de los Toros, 1adical

ruit,San (arlos, Shani, Teem,Triple @ola, and 2edigun

U/S Fri.)#La6 rad0I Ba"en4ets, Barcel, Bocabits, (heese Tris, (heetos,

(hesterHs, (hi$itos, (hurrumais, (rac"er Cac", (ruitos, +oritos, andangos, ritos,

unyuns,amesa,o Snac"s, CamesH randmaHs (oo"ies, 9am"aHs,%ayHs, Miss 0ic"ieHs,

Munchies, Munchos, :i" :a"s, )berto Meat Snac"s, Duavers, 1old old, 1uffles,

http://en.wikipedia.org/wiki/Pepsi-Colahttp://en.wikipedia.org/wiki/Caffeine-Free_Pepsihttp://en.wikipedia.org/wiki/Diet_Pepsihttp://en.wikipedia.org/wiki/Pepsi_Lighthttp://en.wikipedia.org/wiki/Caffeine-Free_Diet_Pepsihttp://en.wikipedia.org/wiki/Caffeine-Free_Diet_Pepsihttp://en.wikipedia.org/wiki/Caffeine-Free_Pepsihttp://en.wikipedia.org/wiki/Wild_Cherry_Pepsihttp://en.wikipedia.org/wiki/Wild_Cherry_Pepsihttp://en.wikipedia.org/wiki/Wild_Cherry_Pepsihttp://en.wikipedia.org/wiki/Pepsi_Limehttp://en.wikipedia.org/wiki/Pepsi_Maxhttp://en.wikipedia.org/wiki/Pepsi_Maxhttp://en.wikipedia.org/wiki/Pepsi_Twisthttp://en.wikipedia.org/wiki/Pepsi_Twisthttp://en.wikipedia.org/wiki/Pepsi_ONEhttp://en.wikipedia.org/wiki/Frawghttp://en.wikipedia.org/wiki/Mountain_Dewhttp://en.wikipedia.org/wiki/Mountain_Dewhttp://en.wikipedia.org/wiki/Mug_Root_Beerhttp://en.wikipedia.org/wiki/Mug_Root_Beerhttp://en.wikipedia.org/wiki/Sierra_Misthttp://en.wikipedia.org/wiki/Tropicana_Productshttp://en.wikipedia.org/wiki/Aquafinahttp://en.wikipedia.org/wiki/Dole_Food_Companyhttp://en.wikipedia.org/wiki/Gatoradehttp://en.wikipedia.org/wiki/Mountain_Dew_AMPhttp://en.wikipedia.org/wiki/Propel_Fitness_Waterhttp://en.wikipedia.org/wiki/SoBehttp://en.wikipedia.org/wiki/SoBehttp://en.wikipedia.org/wiki/Quakerhttp://en.wikipedia.org/wiki/Quakerhttp://en.wikipedia.org/wiki/Ben_&_Jerry'shttp://en.wikipedia.org/wiki/Tropicana_Productshttp://en.wikipedia.org/w/index.php?title=Alvalle&action=edithttp://en.wikipedia.org/wiki/Concordiahttp://en.wikipedia.org/wiki/Copellahttp://en.wikipedia.org/wiki/Copellahttp://en.wikipedia.org/w/index.php?title=Evervess&action=edithttp://en.wikipedia.org/w/index.php?title=Fiesta_(drink)&action=edithttp://en.wikipedia.org/w/index.php?title=Frui%27Vita&action=edithttp://en.wikipedia.org/w/index.php?title=Fruko_(drink)&action=edithttp://en.wikipedia.org/wiki/Kashttp://en.wikipedia.org/w/index.php?title=Lo%C3%B3za&action=edithttp://en.wikipedia.org/wiki/Manzanita_Solhttp://en.wikipedia.org/wiki/Mirindahttp://en.wikipedia.org/wiki/Paso_de_los_Toroshttp://en.wikipedia.org/wiki/Paso_de_los_Toroshttp://en.wikipedia.org/w/index.php?title=Radical_Fruit&action=edithttp://en.wikipedia.org/w/index.php?title=Radical_Fruit&action=edithttp://en.wikipedia.org/wiki/San_Carloshttp://en.wikipedia.org/wiki/San_Carloshttp://en.wikipedia.org/wiki/Shani_(drink)http://en.wikipedia.org/wiki/Teemhttp://en.wikipedia.org/w/index.php?title=Triple_Kola&action=edithttp://en.wikipedia.org/w/index.php?title=Triple_Kola&action=edithttp://en.wikipedia.org/w/index.php?title=Yedigun&action=edithttp://en.wikipedia.org/w/index.php?title=Yedigun&action=edithttp://en.wikipedia.org/wiki/Frito-Layhttp://en.wikipedia.org/w/index.php?title=Baken-ets&action=edithttp://en.wikipedia.org/wiki/Barcelhttp://en.wikipedia.org/w/index.php?title=Bocabits&action=edithttp://en.wikipedia.org/w/index.php?title=Cheese_Tris&action=edithttp://en.wikipedia.org/wiki/Cheetoshttp://en.wikipedia.org/w/index.php?title=Chester%27s&action=edithttp://en.wikipedia.org/w/index.php?title=Chizitos&action=edithttp://en.wikipedia.org/w/index.php?title=Churrumais&action=edithttp://en.wikipedia.org/wiki/Cracker_Jackhttp://en.wikipedia.org/w/index.php?title=Crujitos&action=edithttp://en.wikipedia.org/wiki/Doritoshttp://en.wikipedia.org/wiki/Doritoshttp://en.wikipedia.org/w/index.php?title=Fandangos_(snacks)&action=edithttp://en.wikipedia.org/wiki/Fritoshttp://en.wikipedia.org/wiki/Funyunshttp://en.wikipedia.org/wiki/Gamesahttp://en.wikipedia.org/wiki/Gamesahttp://en.wikipedia.org/wiki/Gamesahttp://en.wikipedia.org/w/index.php?title=Go_Snacks&action=edithttp://en.wikipedia.org/w/index.php?title=Go_Snacks&action=edithttp://en.wikipedia.org/w/index.php?title=James%27_Grandma%27s_Cookies&action=edithttp://en.wikipedia.org/w/index.php?title=Hamka%27s&action=edithttp://en.wikipedia.org/w/index.php?title=Hamka%27s&action=edithttp://en.wikipedia.org/wiki/Lay'shttp://en.wikipedia.org/wiki/Lay'shttp://en.wikipedia.org/wiki/Miss_Vickie'shttp://en.wikipedia.org/w/index.php?title=Munchies_(Food)&action=edithttp://en.wikipedia.org/w/index.php?title=Munchies_(Food)&action=edithttp://en.wikipedia.org/wiki/Munchoshttp://en.wikipedia.org/wiki/Munchoshttp://en.wikipedia.org/wiki/Munchoshttp://en.wikipedia.org/wiki/Nik_Nakshttp://en.wikipedia.org/wiki/Nik_Nakshttp://en.wikipedia.org/w/index.php?title=Oberto_Meat_Snacks&action=edithttp://en.wikipedia.org/wiki/Quavershttp://en.wikipedia.org/wiki/Rold_Goldhttp://en.wikipedia.org/wiki/Ruffleshttp://en.wikipedia.org/wiki/Pepsi-Colahttp://en.wikipedia.org/wiki/Caffeine-Free_Pepsihttp://en.wikipedia.org/wiki/Diet_Pepsihttp://en.wikipedia.org/wiki/Pepsi_Lighthttp://en.wikipedia.org/wiki/Caffeine-Free_Diet_Pepsihttp://en.wikipedia.org/wiki/Caffeine-Free_Pepsihttp://en.wikipedia.org/wiki/Wild_Cherry_Pepsihttp://en.wikipedia.org/wiki/Pepsi_Limehttp://en.wikipedia.org/wiki/Pepsi_Maxhttp://en.wikipedia.org/wiki/Pepsi_Twisthttp://en.wikipedia.org/wiki/Pepsi_ONEhttp://en.wikipedia.org/wiki/Frawghttp://en.wikipedia.org/wiki/Mountain_Dewhttp://en.wikipedia.org/wiki/Mug_Root_Beerhttp://en.wikipedia.org/wiki/Sierra_Misthttp://en.wikipedia.org/wiki/Tropicana_Productshttp://en.wikipedia.org/wiki/Aquafinahttp://en.wikipedia.org/wiki/Dole_Food_Companyhttp://en.wikipedia.org/wiki/Gatoradehttp://en.wikipedia.org/wiki/Mountain_Dew_AMPhttp://en.wikipedia.org/wiki/Propel_Fitness_Waterhttp://en.wikipedia.org/wiki/SoBehttp://en.wikipedia.org/wiki/Quakerhttp://en.wikipedia.org/wiki/Ben_&_Jerry'shttp://en.wikipedia.org/wiki/Tropicana_Productshttp://en.wikipedia.org/w/index.php?title=Alvalle&action=edithttp://en.wikipedia.org/wiki/Concordiahttp://en.wikipedia.org/wiki/Copellahttp://en.wikipedia.org/w/index.php?title=Evervess&action=edithttp://en.wikipedia.org/w/index.php?title=Fiesta_(drink)&action=edithttp://en.wikipedia.org/w/index.php?title=Frui%27Vita&action=edithttp://en.wikipedia.org/w/index.php?title=Fruko_(drink)&action=edithttp://en.wikipedia.org/wiki/Kashttp://en.wikipedia.org/w/index.php?title=Lo%C3%B3za&action=edithttp://en.wikipedia.org/wiki/Manzanita_Solhttp://en.wikipedia.org/wiki/Mirindahttp://en.wikipedia.org/wiki/Paso_de_los_Toroshttp://en.wikipedia.org/w/index.php?title=Radical_Fruit&action=edithttp://en.wikipedia.org/w/index.php?title=Radical_Fruit&action=edithttp://en.wikipedia.org/wiki/San_Carloshttp://en.wikipedia.org/wiki/Shani_(drink)http://en.wikipedia.org/wiki/Teemhttp://en.wikipedia.org/w/index.php?title=Triple_Kola&action=edithttp://en.wikipedia.org/w/index.php?title=Yedigun&action=edithttp://en.wikipedia.org/wiki/Frito-Layhttp://en.wikipedia.org/w/index.php?title=Baken-ets&action=edithttp://en.wikipedia.org/wiki/Barcelhttp://en.wikipedia.org/w/index.php?title=Bocabits&action=edithttp://en.wikipedia.org/w/index.php?title=Cheese_Tris&action=edithttp://en.wikipedia.org/wiki/Cheetoshttp://en.wikipedia.org/w/index.php?title=Chester%27s&action=edithttp://en.wikipedia.org/w/index.php?title=Chizitos&action=edithttp://en.wikipedia.org/w/index.php?title=Churrumais&action=edithttp://en.wikipedia.org/wiki/Cracker_Jackhttp://en.wikipedia.org/w/index.php?title=Crujitos&action=edithttp://en.wikipedia.org/wiki/Doritoshttp://en.wikipedia.org/w/index.php?title=Fandangos_(snacks)&action=edithttp://en.wikipedia.org/wiki/Fritoshttp://en.wikipedia.org/wiki/Funyunshttp://en.wikipedia.org/wiki/Gamesahttp://en.wikipedia.org/w/index.php?title=Go_Snacks&action=edithttp://en.wikipedia.org/w/index.php?title=James%27_Grandma%27s_Cookies&action=edithttp://en.wikipedia.org/w/index.php?title=Hamka%27s&action=edithttp://en.wikipedia.org/wiki/Lay'shttp://en.wikipedia.org/wiki/Miss_Vickie'shttp://en.wikipedia.org/w/index.php?title=Munchies_(Food)&action=edithttp://en.wikipedia.org/wiki/Munchoshttp://en.wikipedia.org/wiki/Nik_Nakshttp://en.wikipedia.org/w/index.php?title=Oberto_Meat_Snacks&action=edithttp://en.wikipedia.org/wiki/Quavershttp://en.wikipedia.org/wiki/Rold_Goldhttp://en.wikipedia.org/wiki/Ruffles


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1ustlerHs Meat Stic"s, Sabritas, Sabritones, Santitas, Smartfood, The SmithHs Snac"food

(ompany, SonricHs, StacyHs &ita (hips, Sun (hips, Tor4tees, Tostitos, Wal"ers, and

Wotsits

U/S ua',r Oa.0 rad0 Aunt Cemima, (apHn (runch, (oqueiro, (rispHums,

(ruesli, rescAvena, @ing 0itaman, %ife, )atso Simple,Dua"e,Duisp,1ice4A41oni, and

Spud$

http://en.wikipedia.org/w/index.php?title=Rustler%27s_Meat_Sticks&action=edithttp://en.wikipedia.org/w/index.php?title=Sabritas&action=edithttp://en.wikipedia.org/w/index.php?title=Sabritas&action=edithttp://en.wikipedia.org/w/index.php?title=Sabritones&action=edithttp://en.wikipedia.org/w/index.php?title=Santitas&action=edithttp://en.wikipedia.org/wiki/Smartfoodhttp://en.wikipedia.org/wiki/Smartfoodhttp://en.wikipedia.org/wiki/The_Smith's_Snackfood_Companyhttp://en.wikipedia.org/wiki/The_Smith's_Snackfood_Companyhttp://en.wikipedia.org/wiki/The_Smith's_Snackfood_Companyhttp://en.wikipedia.org/w/index.php?title=Sonric%27s&action=edithttp://en.wikipedia.org/w/index.php?title=Stacy%27s_Pita_Chips&action=edithttp://en.wikipedia.org/wiki/Sun_Chipshttp://en.wikipedia.org/wiki/Sun_Chipshttp://en.wikipedia.org/w/index.php?title=Tor-tees&action=edithttp://en.wikipedia.org/w/index.php?title=Tor-tees&action=edithttp://en.wikipedia.org/wiki/Tostitoshttp://en.wikipedia.org/wiki/Walkershttp://en.wikipedia.org/wiki/Wotsitshttp://en.wikipedia.org/wiki/Quaker_Oatshttp://en.wikipedia.org/wiki/Aunt_Jemimahttp://en.wikipedia.org/wiki/Aunt_Jemimahttp://en.wikipedia.org/wiki/Cap'n_Crunchhttp://en.wikipedia.org/w/index.php?title=Coqueiro&action=edithttp://en.wikipedia.org/w/index.php?title=Crisp%27ums&action=edithttp://en.wikipedia.org/w/index.php?title=Cruesli&action=edithttp://en.wikipedia.org/w/index.php?title=FrescAvena&action=edithttp://en.wikipedia.org/wiki/King_Vitamanhttp://en.wikipedia.org/wiki/Life_(cereal)http://en.wikipedia.org/w/index.php?title=Oatso_Simple&action=edithttp://en.wikipedia.org/wiki/Quake_(cereal)http://en.wikipedia.org/wiki/Quisphttp://en.wikipedia.org/wiki/Quisphttp://en.wikipedia.org/wiki/Quisphttp://en.wikipedia.org/wiki/Rice-A-Ronihttp://en.wikipedia.org/wiki/Spudzhttp://en.wikipedia.org/w/index.php?title=Rustler%27s_Meat_Sticks&action=edithttp://en.wikipedia.org/w/index.php?title=Sabritas&action=edithttp://en.wikipedia.org/w/index.php?title=Sabritones&action=edithttp://en.wikipedia.org/w/index.php?title=Santitas&action=edithttp://en.wikipedia.org/wiki/Smartfoodhttp://en.wikipedia.org/wiki/The_Smith's_Snackfood_Companyhttp://en.wikipedia.org/wiki/The_Smith's_Snackfood_Companyhttp://en.wikipedia.org/w/index.php?title=Sonric%27s&action=edithttp://en.wikipedia.org/w/index.php?title=Stacy%27s_Pita_Chips&action=edithttp://en.wikipedia.org/wiki/Sun_Chipshttp://en.wikipedia.org/w/index.php?title=Tor-tees&action=edithttp://en.wikipedia.org/wiki/Tostitoshttp://en.wikipedia.org/wiki/Walkershttp://en.wikipedia.org/wiki/Wotsitshttp://en.wikipedia.org/wiki/Quaker_Oatshttp://en.wikipedia.org/wiki/Aunt_Jemimahttp://en.wikipedia.org/wiki/Cap'n_Crunchhttp://en.wikipedia.org/w/index.php?title=Coqueiro&action=edithttp://en.wikipedia.org/w/index.php?title=Crisp%27ums&action=edithttp://en.wikipedia.org/w/index.php?title=Cruesli&action=edithttp://en.wikipedia.org/w/index.php?title=FrescAvena&action=edithttp://en.wikipedia.org/wiki/King_Vitamanhttp://en.wikipedia.org/wiki/Life_(cereal)http://en.wikipedia.org/w/index.php?title=Oatso_Simple&action=edithttp://en.wikipedia.org/wiki/Quake_(cereal)http://en.wikipedia.org/wiki/Quisphttp://en.wikipedia.org/wiki/Rice-A-Ronihttp://en.wikipedia.org/wiki/Spudz


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!!" Mi+,0.),0

&epsi(o oundation announces two maor new grants to Water&artners and Safe

Water :etwor" programs to provide access to safe water and sanitation in developing

countries

&epsi(o Again :amed to the +ow Cones Sustainability !nde#

&epsi(o Agrees to Buy BulgariaHs %eading :uts and Seeds (ompany

&epsi(o Announces !nitiatives With the 'arth !nstitute and 98) Africa to +rive

Sustainable Water &ractices

orbes :ames &epsi(o Among !ts Best Big (ompanies

&epsi(o !ndia (ommissions irst 1emote Wind Turbine to enerate 1enewable,

(lean 'nergy

(1) :ames &epsi(o to Top 83 7?? Best (orporate (iti$ens 8??>

&epsi(o to Buy 1ussian Cuice %eader, %ebedyans"y

'mployees %ead 'ffort to Ma"e (hicago &la$a irst %''+4(ertified &epsi(o9eadquarters

atorade %aunches atorade Tiger with (omprehensive !ntegrated Mar"eting

(ampaign

&epsi(o 9onored with 8??> 'nergy Star &artner of the 2ear Award

/@ 0itamin Water Brand4 0 Water Acquired by &epsi(o



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Dua"er &lant in (edar 1apids (loses and 1eopens acility +ue to looding to &rotect

'mployees

&epsi(o oodservice and :a"ed Cuice '#pand Starbuc"s &resence

atorade Sports Science !nstitute athers WorldHs %eading 1esearchers on &rotein

:utrition

&epsi(o !nternationalHs (hina oods Wins L(hinaHs Top %eaders 8??>L Award

Wall Street Cournal Article 1ecogni$es &epsi(o for %eadership in 'mployment of

&eople with +ifferent Abilities

&epsi(o and rito4%ay Coin SmartWay in (ommitment to 1educe reenhouse as

'missions

&epsi(o Beats (o"e in 1ace to %aunch :ew :atural Sweetener *Stevia-

&epsi(o rance 1ecogni$ed as Lreat &lace To Wor"L by !nstitute Survey

&epsi(o (ommits to 1educing Acryalmide %evels in &otato (hip &roducts and

1estructured &otato Snac"s in (alifornia

Subway :ames &epsi(o L0endor of the 2earL for Sustainability %eadership

Ta$o Tea Coins &epsi %ipton &artnership



26/83


PEPSICO IN INDIA

&epsi(o entered !ndia in 7> and has grown to become one of the countryEs leading food

and beverage companies. )ne of the largest multinational investors in the country, &epsi(o

has established a business which aims to serve the long term dynamic needs of !ndia.

&epsi(o !ndia and its partners have invested more than /.S.N7 billion since the company was

established in the country. &epsi(o provides direct and indirect employment to 73?,???

people including suppliers and distributors.

&epsi(o nourishes consumers with a range of products from treats to healthy eats, that deliver

oy as well as nutrition and always, good taste. &epsi(o !ndiaEs e#pansive portfolio includes

iconic refreshment beverages &epsi, 6 /&, Mirinda and Mountain +ew, in addition to low

calorie options such as +iet &epsi, hydrating and nutritional beverages such as Aquafina

drin"ing water, isotonic sports drin"s 4 atorade, Tropicana7??Q fruit uices, and uice based

drin"s Tropicana :ectars, Tropicana Twister and Slice. %ocal brands %ehar 'vervess

Soda, +u"es %emonade and Mangola add to the diverse range of brands.

&epsi(oEs foods company, rito4%ay, is the leader in the branded salty snac" mar"et and all

rito %ay products are free of trans4fat and MS. !t manufactures %ayEs &otato (hipsJ

(heetos e#truded snac"s, /ncle (hips and traditional snac"s under the @ur"ure and %ehar

brands. The companyEs high fibre brea"fast cereal, Dua"er )ats, and low fat and roasted

snac" options enhance the healthful choices available to consumers. rito %ayEs core

products, %ayEs, @ur"ure, /ncle (hips and (heetos are coo"ed in 1ice Bran )il to

significantly reduce saturated fats and all of its products contain voluntary nutritional

labelling on their pac"ets.

The group has built an e#pansive beverage and foods business. To support its operations,

&epsi(o has =; bottling plants in !ndia, of which 73 are company owned and 8> are

franchisee owned. !n addition to this, &epsi(oEs rito %ay foods division has ; state4of4the4art

plants. &epsi(oEs business is based on its sustainability vision of ma"ing tomorrow better

than today. &epsi(oEs commitment to living by this vision every day is visible in its

contribution to the country, consumers and farmers.



27/83


&epsi(o gained entry to !ndia in 7> by creating a oint venture with the &unab

government4owned &unab Agro !ndustrial (orporation *&A!(- and 0oltas !ndia %imited.

This oint venture mar"eted and sold %ehar &epsi until 7


28/83


has also been accused by the puthussery panchayat in the &ala""ad district in @erala, !ndia,

of practicing Lwater piracyL due to its role in e#ploitation of ground water resources resulting

in scarcity of drin"ing water for the panchayatHs residents, who have been pressuring the

government to close down the &epsi(o unit in the village.

!n 8??5, the (S' again found that soda drin"s, including both &epsi and (oca4(ola, had high

levels of pesticides in their drin"s. Both &epsi(o and The (oca4(ola (ompany maintain that

their drin"s are safe for consumption and have published news paper advertisements that say

pesticide levels in their products are less than those in other foods such as tea, fruit and dairy

products. !n the !ndian state of @erala, sale and production of &epsi4(ola, along with other

soft drin"s, was banned by the state government in 8??5, but this was reversed by the @erala

high court merely a month later. ive other !ndian states have announced partial bans on the

drin"s in schools, colleges and hospitals.

http://en.wikipedia.org/wiki/Keralahttp://en.wikipedia.org/wiki/Kerala


29/83


COMPANY PROFILE IN INDIA

COMPANY NAME P,40i C) Idia H)+di-0 Pri2a., Limi.,d

COUNTRYTERRITORYIdia

ADDRESS

KEY PEOPLE

98DLF C)r4)ra., 4ar'0 8+)&' u.u

E&+a2, Gur-a)3 Har6aa3 Idia

Sa5,,2 Chadha3 CEO )7 P,40iC) Idia/

PRODUCTSSERVICES WE

OFFER

Ma-)3 Gua2a3 Pa4a6a3 8aaa

8USINESS TYPE Mau7a&.ur,r

INDUSTRY FOCUS F))d Pr)&,00i-

GEOGRAPHIC MARKETS Midd+, Ea0.

NO/ OF EMPLOYEES A)2, $!!! P,)4+,

ANNUAL SALES RANGE

(USD%

A)2, US$!! Mi++i)

YEAR ESTA8LISHED Gai,d ,.r6 .) Idia i T$>""T

http://en.wikipedia.org/wiki/1988http://en.wikipedia.org/wiki/1988http://en.wikipedia.org/wiki/1988http://en.wikipedia.org/wiki/1988http://en.wikipedia.org/wiki/1988http://en.wikipedia.org/wiki/1988


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31/83


INTRODUCTION

A managerial accounting strategy focusing on maintaining efficient levels of both

(omponents of wor"ing capital, current assets and current liabilities, in respect to each other

are referred to as wor"ing capital management. Wor"ing capital management ensures a

company has sufficient cash flow in order to meet its short4term debt obligations and

operating e#penses. !mplementing an effective wor"ing capital management system is an

e#cellent way for many companies to improve their earnings. The two main aspects of

wor"ing capital management are ratio analysis and management of individual components of

wor"ing capital. 1atio analysis will lead management to identify areas of focus such as

inventory management, cash management, accounts receivable and payable management.

The study obectives in wor"ing capital management particular to this study areI

To e#amine the impact of accounts receivables days, inventories days, accounts

payable +ays and cash conversion cycle on return on total assets

To analy$e the trend in wor"ing capital needs of firms and to e#amine the causes for

any significant differences between the industries.

W)r'i- Ca4i.a+ C)m4),.0

The term wor"ing capital refers to the amount of capital which is readily available to an

)rgani$ation. !t is a measure of both a companyHs efficiency and its short4term financial

health. That is, wor"ing capital is the difference between resources in cash or readily

convertible into cash *(urrent Assets- and organi$ational commitments for which cash will

soon be required *(urrent %iabilities-. (urrent Assets are resources which are in cash or will

soon be converted into cash in Fthe ordinary course of businessG. (urrent %iabilities are

commitments which will soon require cash settlement in Fthe ordinary course of businessG.



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The wor"ing capital is calculated asI

W)1@!: (A&!TA% (/11':T ASS'TS4(/11':T %!AB!%!T!'S

CURRENT ASSETS CURRENT LIA8ILITY

(ash in handOat ban" Bills &ayable

Bills 1eceivable Sundry (reditors

Sundry +ebtors )utstanding '#penses

Short term %oans Accrued '#penses

!nventoryO Stoc" Ban" overdraft

Temporary !nvestment

&repaid '#penses

Accrued !ncome

&ositive wor"ing capital means that the company is able to pay off its short4term liabilities.

:egative wor"ing capital means that a company currently is unable to meet its short4term

liabilities with its current assets *cash, accounts receivable, inventory-. !f a companyHs current

assets do not e#ceed its current liabilities, then it may run into trouble paying bac" creditors

in the short term. The worst4case scenario is ban"ruptcy. A declining wor"ing capital ratio

over a longer time period could also be a red flag that warrants further analysis. Wor"ing

capital also gives investors an idea of the companyHs underlying operational efficiency.

Money that is tied up in inventory or money that customers still owe to the company cannot

be used to pay off any of the companyHs obligations. So, even if accompany is not operating

in the most efficient manner *slow collection-, it will show up as an increase in the wor"ing

capital. This can be seen by comparing the wor"ing capital from one period to anotherJ slow

collection may signal an underlying problem in the companyHs operations.

W)r'i- Ca4i.a+ Aa+60i0

The maor components of gross wor"ing capital include stoc"s *raw materials, wor"4in4

progress and finished goods-, debtors, cash and ban" balances. The composition of wor"ing



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capital depends on a multiple of factors, such as operating level, level of operational

efficiency, inventory policies, boo" debt policies, technology used and nature of the industry.

While inter4 industry variation is e#pected to be high, the degree of variation is e#pected to

be low for firms within the industry.

Na.ur, ad Im4)r.a&, )7 W)r'i- Ca4i.a+

The wor"ing capital meets the short4term financial requirements of a business enterprise. !t is

a trading capital, not retained in the business in a particular form for longer than a year. The

money invested in it changes form and substance during the normal course of business

operations. !f it becomes wea", the business can hardly prosper and survive. The success of a

firm depends ultimately, on its ability to generate cash receipts in e#cess of disbursements.

)n the one hand, wor"ing capital is always significant. This is especially true from the

lenders or creditors

&erspective, where the main concern is defensivenessI can the company meet its short4term

obligations, such as paying vendor billsU

But from the perspective of equity valuation and the companyHs growth prospects, wor"ing

capital is more critical to some businesses than to others. At the ris" of oversimplifying, we

could say that the models of these businesses are asset or capital intensive rather than service

or people intensive.

Th, Im4)r.a&, )7 G))d W)r'i- Ca4i.a+ Maa-,m,.



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The obective of wor"ing capital management is to maintain the optimum balance of each of

the wor"ing capital components. This includes ma"ing sure that funds are held as cash in

ban" deposits for as long as and in the largest amounts possible, thereby ma#imi$ing the

interest earned.

9owever, such cash may more appropriately be FinvestedG in other assets or in reducing

other liabilities.

Wor"ing capital management ta"es place on two levelsI

1atio analysis can be used to monitor overall trends in wor"ing capital and to identify areas

requiring closer management.The individual components of wor"ing capital can be effectively managed by using various

techniques and strategies.

When considering these techniques and strategies, departments need to recogni$e that each

department has a unique mi# of wor"ing capital components. The emphasis that needs to be

placed on each component varies according to department. or e#ample, some departments

have significant inventory levelsJ others have little if any inventory.

urthermore, wor"ing capital management is not an end in itself. !t is an integral part of the

departmentEs overall management. The needs of efficient wor"ing capital management must

be considered in relation to other aspects of the departmentEs financial and non4financial

performance.

W)r'i- Ca4i.a+ C6&+,



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Wor"ing capital cycle, also "nown as the asset conversion cycle, operating cycle, cash

conversion cycle or ust cash cycle, is used in the financial analysis of a business. The higher

the number, the longer a firmHs money is tied up in business operations and unavailable for

other activities such as investing. The cash conversion cycle is the number of days between

paying for raw materials and receiving cash from selling goods made from that raw material.

(ash (onversion (ycle Average Stoc"holding &eriod *in days- V Average

1eceivables. &rocessing &eriod *in days- 4 Average &ayables &rocessing &eriod *in days- with.

Average Stoc"holding &eriod *in days- (losing Stoc" O Average +aily &urchases. Average 1eceivables &rocessing &eriod *in days- Accounts 1eceivable O Average

+aily (redit Sales. Average &ayable &rocessing &eriod *in days- Accounts &ayable O Average +aily

(redit &urchases.



37/83


A short cash conversion cycle indicates good wor"ing capital management. (onversely, a

long cash conversion cycle suggests that capital is tied up while the business waits for

customers to pay. The longer the production process, the more cash the firm must "eep tied

up in inventories. Similarly, the longer it ta"es customers to pay their bills, the higher the

value of accounts receivable.

)n the other hand, if a firm can delay paying for its own materials, it may reduce the amount

of cash it needs. !n other words, accounts payable reduce net wor"ing capital.



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SCHEDULE OF CHANGES IN WORKING CAPITAL

WORKING CAPITAL FOR !!< TO !!"

!!< !!= !!"

A

CURRENT ASSET MILLION

(ash 'quilvalnts 58< 5=6

)ther current Asset 833 ;=8 865

T).a+ Curr,. a00,. =:> 9!"< 9$:$

8

CURRENT LIA8ILITY

Accounts &ayable 7566 7 7563

Short term debt ;6= 8=6 7=?>Accrued %iability ? ? ?

T).a+ &urr,. +iai+i.6 !;$ $; 9!"9

NET WORKING CAPITAL(A#8% " "=$ ;"



39/83


CHART ANALYSIS



40/83


PERCENTAGE CHANGE IN CURRENT ASSET ? CURRENT

LIA8ILITY FROM !!< TO !!"

A

!!< !!= !!"

CURRENT ASSET

(ash 'quilvalants 3.; =.< 6.=

Accounts 1eceivable 77.8 77.5 7?.5!nventory =.3 =.= =.7

)ther current Asset 8.7 8.5 8.7

T).a+ Curr,. a00,. 9/$ 9/; :/

8CURRENT

LIA8ILITY

Accounts 1eceivable 7=.7 73 78.

Accrued %iability ? ??

T).a+ &urr,. +iai+i.6 $=/ $ 9/=



41/83


CHART ANALYSIS



42/83


ASSESMENT OF WORKING CAPITAL REUIREMENT

*MA!M/M &'1M!SS!B%' BA:@ !:A:('-

!!< !!= !!"

7 Total (urrent Assets 86=< ;?>5 ;7=78 current %iabilities 58< 5=6 7;>


43/83


ANALYSIS

Wor"ing capital management ensures a company has sufficient cash flow in order to meet its

short4term debt obligations and operating e#penses. !n 8??5 the company have 1s.567 mill N. !n this year

company have ta"e less short term debt from previous year. This year company uses his own

funds. !ts shows the efficient wor"ing capital management by &epsi. !n 8??> the company have

only 3> mill N wor"ing capital because in this year company have ta"es much more short term

loans for its e#pansion and pay for his day to day e#penses. !ts shows the company have not

utilise efficiently the fi#ed assets.

!n this year world economy faces downturns. 1ecession has also affected on &epsi. This year. or

this company has ta"e N7=?> mill. Short term loans. !ts increases the current liability of the

company. (ompany pay its quic"ly in his payable time. !ts shows the good liquidity position of

the company in 8??>.

This year company have more cash ban" balance in hand from the previous year. !ts 3?Q more

than from the previous year. This year company have N7563 mill. Accounts payable it is less from

the previous year. !t is good for the company.

O5,&.i2, )7 .h, 0.ud6



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To observe the systems, process, interactions in the organi$ation.

To study and analy$e the wor"ing capital management of &epsi(o.

To study that how they use wor"ing capital to solve day to day problems.

To study about their )perating (ycle, cash conversion cycle, processing period.

R,0,ar&h M,.h)d)+)-6



45/83


R,0,ar&h i &)mm) 4ar+a&, r,7,r0 .) 0,ar&h 7)r ')*+,d-,

The term research refers to the systematic method consisting of enunciating the problem ,

formulating a hypothesis collecting the data , analy$ing the facts and reaching the certain

conclusions either in the form of solution towards the concern problem or in certain

generali$ation for some theoretical formulation .

1esearch Methodology is a way to systematically solve the research problem .!t may be

understood as a science of studying how research is done scientifically.

or completing the proect wor", data inputs were collected from the following sourcesI

Primar6 Da.a

(ollected data through discussion with the inance manager in &epsi.

(ollected data during wor"ing in &epsi.

S,&)dar6 Da.a

(ollected data from personnel manual of &epsi.

(ollected data from different maga$ines, ournals, :ews papers and !nternet.

or this proect !Eve used the secondary data in the form of Annual report 8??5, Annual

report 8??6, and Annual report 8??>.

TOOLS



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!Eve used analysis tools that are mention below4

1atio Analysis

(harts raphs



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48/83


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CHART ANALYSIS

INTERPRETATION

By analy$ing the ; years data we see that the inventories are increased in year 8??6 by 366.

We are loo"ing appro#imate same pattern in inventories. We can see that inventories are

grown by =.7Q and =.7Q in ?5 and ?6 respectively from previous year. By this growth we

can say that the company is growing very smoothly in soft drin" sector. A company uses

inventory when they have demand in mar"et and &epsi is having a great demand in beverages

sector. rom other point of view we can say that the liquidity of firm is bloc"ed in inventories

but to stoc" is very good due to uncertainty of availability of raw material in time.



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SUNDRY DE8TORS ANALYSIS

+ebtors or an account receivable is an important component of wor"ing capital and fall under

current assets. +ebtors will arise only when credit sales are made.

POSITION OF SUNDRY DE8TORS IN PEPSI CO

1S. !: M!%% N

!!< !!= !!"

D,.)r0 N,.

Trade accounts receivable 7?85 7;7< 78?>

Allowances for doubtful accounts 38 3= 67

Accounts receivable 7 7>> 73=

)ther receivable 35 56 >?

$99 $


51/83


CHART ANALYSIS

INTERPRETATION

!n the table and figure we see that there is rise in the debtors in &epsi(o %imited in the

successive years. A simple logic is that debtors increase only when sales increase and if sales

increases it is good sign for growth.

We can say that it is a good sign as well as negative also. (ompany policy of debtors is very

good but a ris" of bad debts is always present in high debtors. When sales is increasing with a

great speed the profit also increases. !f company decreases the +ebtors they can use the

money in many investment plans.



52/83


CASH AND 8ANK 8ALANCE ANALYSIS

(ash is called the most liquid asset and vital current assets. !t is an important component of

wor"ing capital. !n a narrow sense, cash includes notes, ban" draft, cheque etc while in abroader sense it includes near cash assets such as mar"etable securities and time deposits

with ban".

POSITION OF CASH ? 8ANK 8ALANCE IN PEPSICO

1S.!: M!%%. N

!!< !!= !!"

(AS9in hand 58< 5=6


53/83


INTERPRETATION

!f we analy$e the above table and chart we find that it follows a increasing trend. !n the year

8??5 it had maintained a 58< mill N amount of cash and ban" balance which has increase in

the year 8??6 up to 5=6 mill N but there is huge increase between the year 8??6 and 8??>.

Although companyEs cash is increasing this is very good sign for company. 9olding more

cash is not good it means company not using the cash for better proects. The analysis shows

that the fi# deposits of company are rapidly increase in last year as =


54/83


POSITION OF CURRENT LIA8ILITIES IN PEPSICO

!: M!%%. N

CURRENT LIA8ILITIES

Accounts payable and 7566 7 7563)ther (urrent %iabilities

Short term liabilities ;6= 8=? 7?;

(urrent Maturities ? 6 7;?3

T).a+ !;$ $; 9!"9

CHART ANALYSIS



55/83


INTERPRETATION

we analy$e the above table then we can see that it follow an uneven trend. The important

component of current liabilities is sundry creditors and other liabilities. !n ?54?6 it increased

by 76Q and in ?64?> it increased by 75. it was increased because of growth in

short term debt by ;


56/83


PROVISION ANALYSIS

!!< !!= !!"

+eferred ta#es 57 =8 =6

&roposed +ividend


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58/83


POSITION OF RECEIVA8LE RATIO IN PEPSI CO

+'BT)1S

1'('!0AB%' 1AT!) X ;53

SA%'S

8??5 8??6 8??>2'A1S

1'('!0AB%' 1AT!) 7?.7


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:ow if we analy$e the three year data we can say that it holds a good position while

receiving its money from its debtors. The ratios are same in last two year, which implies that

recovery position is good and company should maintain these positions.

POSITION OF PAYA8LE RATIO IN PEPSI CO

(1'+!T)1S

&A2AB%' 1AT!) X;53

()ST ) SA%'S

8??5 8??6 8??>2'A1S

&A2AB%' 1AT!) >6.=


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61/83


POSITION OF INVENTORY RATIO IN PEPSI CO

Average stoc"

!:0':T)12 T/1:)0'1 1AT!). X ;53

(ost of goods sold

8??5 8??6 8??>2'A1S

!.T.1. 1AT!) 7;.6 7;.; 7;.6

CHART ANALYSIS



62/83


INTERPRETATION

This ratio tells the story by which stoc" is converted into sales. A high stoc" turnover ratio

reveals the liquidity of the inventory i.e., how many times on an average, inventory is turned

over or sold during the year. !f a firm maintains a minimum stoc" level in order to ma#imi$e

sales by quic" rotation of inventory and the holding cost of inventory will be minimum. A

low stoc" turnover ratio reveals undesirable accumulation of obsolete stoc".

By analy$ing the three year data it seen that it follows an appro#imately same trend. We see

that from the year 8??5 to 8??> it is more or less double which has been rectified in the year

8??>. But it is needless to say that ratio the company maintains is very high and the company

is required to ta"e measures to lower down this ratio as it affects the wor"ing capital cycle of

company and the flow of cash in the company.

POSITION OF CURRENT RATIO IN PEPSI CO

T)TA% (/11':T ASS'T

(/11':T 1AT!)

T)TA% (/11':T %!AB!%!T2

2'A1S 8??5 8??6 8??>

(/11':T 1AT!) 7.;= 7.;< 7.?8



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64/83


POSITION OF UICK RATIO IN PEPSI CO

T)TA% %!D/!+ ASS'T

D/!(@ 1AT!)

T)TA% (/11':T %!AB!%!T2

CHART ANALYSIS

INTERPRETATION

!t is the ratio between quic" liquid assets and quic" liabilities. The normal value for such

ratio is ta"en to be 7I7. !t is used as an assessment tool for testing the liquidity position of the

firm. !t indicates the relationship between strictly liquid assets whose reali$able value is

almost certain on one hand and strictly liquid liabilities on the other hand. %iquid assets

comprise all current assets minus stoc".

By analy$ing the three years data it can be said that its position was good in the year 8??5

and 8??6 but its decrease in the ne#t year. But it is to be said that it is higher than the

standard in the year 8??5 8??6. !ts shows the higher liquidity position of the company.

Lovely Professional University

2'A1S 8??5 8??6 8??>

D/!(@ 1AT!) 7.?> 7.7; ?.>=

64


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WORKING CAPITAL TURNOVER RATIO

()ST ) SA%'

W)1@!: (A&!TA% 1AT!)

:'T W)1@!: (A&!TA%

YEARS !!< !!= !!"

Wor"ing capital ratio > >.=5 7;?.6.

(omparable diluted earnings per share growth of ;Q to N8.86

Worldwide revenue growth of 8Q

(omparable operating income growth of 8Q

1eturned N58= million in cash to shareholder

This year company ta"es N7=??mill short term loans because of macro

economics downturns in economy.

!n 8??> company gives .53N dividend to his share holder.

This year company have 8Q growth in '&S this is very low from the previous

year because company has paid many interest on short term loans.



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73/83


They achieved these results by adapting quic"ly to the economic environment

and by focusing on several business drivers to grow our top line, improve cost and

productivity, and strengthen our people and culture.



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operational thin"ing. 'fforts should constantly be made to improve the wor"ing

capital position. This will yield greater efficiencies and improve customer satisfaction.

!nventories should be managed on a line4by4line basis using the >?O8? rule.

&lacing the responsibility for collecting the debt upon the centre that made the sale.

i.e., cold rolled, hot rolled, galvani$ed etc.



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www.pepsico.com

www.yahoofinance.comhttpIOOwww.rediff.comOmoneyO8??;OaugO87pepsi.htm

httpIOOwww.stohns.eduOmediaO;O>?dc5>8a=7f==8?bec.pdf

httpIOOquic"ta"e.morningstar.comOstoc"netOcashflow7?.asp#U

(ountry/SASymbol&B

httpIOOquic"ta"e.morningstar.comOstoc"netO'fficiency1atios7?.asp#U

(ountry/SASymbol&B

httpIOOwww.sirpepsi.comOpepsi77.htm

REFRENCE

Shashi ". upta *8??>- inancial Management, "alyani &ublications

http://www.pepsico.com/http://www.rediff.com/money/2003/aug/21pepsi.htmhttp://www.stjohns.edu/media/3/80dc682a41f44209b5da9de5f8ac8bec.pdfhttp://quicktake.morningstar.com/stocknet/cashflow10.aspx?Country=USA&Symbol=PBGhttp://quicktake.morningstar.com/stocknet/cashflow10.aspx?Country=USA&Symbol=PBGhttp://quicktake.morningstar.com/stocknet/EfficiencyRatios10.aspx?Country=USA&Symbol=PBGhttp://quicktake.morningstar.com/stocknet/EfficiencyRatios10.aspx?Country=USA&Symbol=PBGhttp://www.pepsico.com/http://www.rediff.com/money/2003/aug/21pepsi.htmhttp://www.stjohns.edu/media/3/80dc682a41f44209b5da9de5f8ac8bec.pdfhttp://quicktake.morningstar.com/stocknet/cashflow10.aspx?Country=USA&Symbol=PBGhttp://quicktake.morningstar.com/stocknet/cashflow10.aspx?Country=USA&Symbol=PBGhttp://quicktake.morningstar.com/stocknet/EfficiencyRatios10.aspx?Country=USA&Symbol=PBGhttp://quicktake.morningstar.com/stocknet/EfficiencyRatios10.aspx?Country=USA&Symbol=PBG


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8ALANCE SHEET OF PEPSI CO

PERIOD ENDING =#D,!" >#D,!= 9!#D,!

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131603466 Working Capital Management of PEPSICO Sudhir Project

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