Accounts Project _group 10

8/4/2019 Accounts Project _group 10

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FINANCIAL STATEMENT ANALYSIS

Name of the student PG Roll No:Preeti Arora PGP20112074

Bubbles Thadani PGP20112181

Jyoti Punj Prakash PGP20112004

Mohini Rathore PGP20112121

Rahul Bhardwaj PGP20112268

Yogendra Singh Chauhan PGP20112137

Shubham Kumar PGP20112256

Submitted to KIRTIKA MALHOTRA

Subject BASIC OF ACCOUNTANCY

Submitted on 22-09-2011

Marks Allotted

Remarks(if any)


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PEPSI CO PVT LTDPepsiCo is an American multinational corporation headquartered in Purchase, Harrison, New

York, United States. It manufactures, marketing & distribution of grain- based snack foods,

beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-

Cola Company and Frito-Lay. PepsiCo has since expanded from its namesake product Pepsi

to a broader range of food & beverages brands, the largest of which include an acquisition of

Tropicana in 1998 and a merger with Quaker Oats in 2001, which added the Gatorade brand

to its portfolio as well. PepsiCo is a SIC 2080(beverage) company.

As of 2009, 19 of PepsiCos product lines generated retail sales of more than $ 1 billion

each. PepsiCo products were distributed across more than 200 countries in 2009, which

generated $ 43.3 billion net revenue in annual. Based on NET REVENUE, PepsiCo is

the second largest food & beverage business in the world. Within North America,

PepsiCo is ranked as the largest food & beverage business in terms of NET REVENUE.

Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006.

Approximately 285,000 people employed worldwide in PepsiCo as of 2010.

PRODUCTPepsiCos product mix consists of 63% foods and 37% beverages. On a worldwide

basis, the companys current product lines include several hundred brands like Pepsi,Mountain Dew, Lays, Tropicana, 7UP, Miranda, Aquafina, etc

AREA OF BUSINESS

The structure ofPepsiCos global operations has shifted multiple times in its history as a

result of international expansion, and as of 2010 it is separated into four main divisions:

PepsiCo Americas Foods PepsiCo Americas Beverages

PepsiCo Europe PepsiCo Asia, Middle East & Africa

As of 2009, 71% of the companys net revenue came from North and South America, 16%

from Europe and13% from Asia, the Middle East & Africa.

CORPORATE SOCIAL RESPONSIBILITY

PepsiCo has maintained a philanthropic program since 1962 called the PepsiCo Foundation,

in which it primarily funds nutrition and activity, safe water and water usage efficiencies,

and education, according to the foundations website


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FINANCIAL STATEMENT ANALYSISFinancial statement analysis is the collective name for the tools and techniques that are

intended to provide relevant information to decision-makers. The purpose of such analysis is

to assess a companys financial health and performance. Financial statement analysis

consists of comparisons for the same company over periods of time and for different

companies in the same industry or different industries.

Financial statement analysis enables investors and creditors to:

Evaluate past performance and financial position Predict future performance

SOURCES OF INFORMATION

Company reports Stock exchanges Business periodicals Information servicesTypes of financial statement analysis:

BALANCE SHEET

INCOME AND EXPENDITURE ACCOUNT

CASH FLOW ANALYSIS

RATIO ANALYSIS


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INTRA FIRM COMPARSION:

HORIZONTAL/ VERTICAL ANALYSIS

BALANCE SHEET:

A financial statement that summarizes a company's assets, liabilities and shareholders'

equity at a specific point in time. These three balance sheet segments give investors an idea

as to what the company owns and owes, as well as the amount invested by the shareholders.

It's called a balance sheet because the two sides balance out. This makes sense: a company

has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it

from shareholders (shareholders' equity).

Each of the three segments of the balance sheet will have many accounts within it that

document the value of each. Accounts such as cash, inventory and property are on the asset

side of the balance sheet, while on the liability side there are accounts such as accounts

payable or long-term debt. The exact accounts on a balance sheet will differ by company and

by industry, as there is no one set template that accurately accommodates for the differences

between different types of businesses.

ASSESTS

CURRENTSASSETS

FIXED ASSETS

LIABILITIES

CURRENTLIABILITIES

LONG TERMLIABILITIES

SHAREHOLDERS

FUNDS

SHAREHOLDERSEQUITY

OWENERS

LIABILITIES


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BALANCE SHEET OF 5 CONSEQUETIVE YEARS

PARTICULAR 2010 2009 2008 2007 2006

CURRENT ASSESTS

CASH & CASH EQUIVALENT 5943 3943 2064 910 1651SHORT TERM INVESTMENT 426 192 213 1571 1171

ACCOUNTS AND NOTES RECEIVABLE,NET 6323 4624 4683 4389 3725

INVENTORIES 3372 2618 2522 2290 1926

PREPAID EXPENSES & OTHER CURRENT ASSESTS 1505 1194 1324 991 657

TOTA CURRENT ASSESTS 17569 12571 10806 10151 9130

PROPERTY, PLANT & EQUIPMENT, NET 19058 12671 11663 11228 9687

AMORTIZATION INTANGIBLE ASSESTS, NET 2025 841 732 796 637

GOODWILL 14661 6534 5124 5169 4594

OTHER NON AMORTIZABLE INTANGIBLE ASSESTS 11783 1782 1128 1248 1212

NON AMORTIZABLE INTANGIBLE ASSESTS 26444 8316 6252 6417 5806INVESTMENT IN NON CONTROLLED AFFILIATES 1368 4484 3883 4354 3690

OTHER ASSESTS 1689 965 2658 1682 980

TOTAL ASSESTS 68153 39848 35994 34628 29930

LIABILITIES & EQUITY

CURRENT LIABILITY

SHORT TERN OBLIGATION 4898 464 369 274

ACCOUNT PAYABLE & OTHER C.L 10923 8127 8273 7602 6496

INCOME TAX PAYABLE 71 165 145 151 90

TOTAL CURRENT LIABILITY 15892 8756 8787 7753 6860

LONG TERM OBLIGATION 19999 7400 7858 4203 2550OTHERL IABILITY 6729 5591 7017 4792 4624

DEFERRRED INCOME TAXES 4057 659 226 646 528

TOTAL LIABILITIES 46677 22406 23888 17394 14562

COMMITMENTS ANS CONTIGENCIES

PREFERRED STOCK, NO. PER VALUE 41 41 41 41 41

REPURCHASED PREFERRED STOCK -150 -145 -138 -132 -120

PEPSI CO COMMON SHARE HOLDERS EQUITY

Common stock, PER SHARE 31 30 30 30 30

CAPITAL IN EXCESS OF PER VALUE 4527 250 351 450 584

RETAINED EARNINGS 37090 33805 30638 28184 24837ACCUMULATED OTHER COMPREHENSIVE LOSS -3630 -3794 -4694 -952 -2246

REPURCHASED COMMON STOCK -16745 -13383 -14122 -10387 -7758

TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY 21273 16908 12203 17325 15447

NON- CONTROLLING INTERESTS 312 638

TOTAL EQUITY 21476 17442

TOTAL LIABILITIES & SHAREHOLDERS EQUITY 68153 39848 35994 34628 29930


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HORIZONTAL/VERTICAL ANALYSIS

2007-2008

PARTICULAR CHANGE CHANGE% VERTCAL

CURRENT ASSESTSCASH & CASH EQUIVALENT 1154 126.8131868 5.734289

SHORT TERM INVESTMENT -1358 -86.44175684 0.591765

ACCOUNTS AND NOTES RECEIVABLE,NET 294 6.698564593 13.0105

INVENTORIES 232 10.13100437 7.006723

PREPAID EXPENSES & OTHER CURRENT ASSESTS 333 33.6024218 3.678391

TOTA CURRENT ASSESTS 655 6.45256625 30.02167

PROPERTY, PLANT & EQUIPMENT, NET 435 3.874242964 32.40262

AMORTIZATION INTANGIBLE ASSESTS, NET -64 -8.040201005 2.033672

GOODWILL -45 -0.870574579 14.23571

OTHER NON AMORTIZABLE INTANGIBLE ASSESTS -120 -9.615384615 3.133856NON AMORTIZABLE INTANGIBLE ASSESTS -165 -2.571294998 17.36956

INVESTMENT IN NON CONTROLLED AFFILIATES -471 -10.81763895 10.78791

OTHER ASSESTS 976 58.02615933 7.384564

TOTAL ASSESTS 1366 3.944784567 100


CURRENT LIABILITY

SHORT TERN OBLIGATION 369 0 1.025171

ACCOUNT PAYABLE & OTHER C.L 671 8.826624572 22.98439

INCOME TAX PAYABLE -6 -3.973509934 0.402845

TOTAL CURRENT LIABILITY 1034 13.33677286 24.4124LONG TERM OBLIGATION 3655 86.96169403 21.83142

OTHERL IABILITY 2225 46.43155259 19.49492

DEFERRRED INCOME TAXES -420 -65.01547988 0.627882

TOTAL LIABILITIES 6494 37.33471312 66.36662


PREFERRED STOCK, NO. PER VALUE 0 0 0.113908

REPURCHASED PREFERRED STOCK -6 4.545454545 -0.3834

PEPSI CO COMMON SHARE HOLDERS EQUITY 0 0

Common stock, PER SHARE 0 0 0.083347

CAPITAL IN EXCESS OF PER VALUE -99 -22 0.975163RETAINED EARNINGS 2454 8.70706784 85.11974

ACCUMULATED OTHER COMPREHENSIVE LOSS -3742 393.0672269 -13.0411

REPURCHASED COMMON STOCK -3735 35.95840955 -39.2343

TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY -5122 -29.56421356 33.90287

NON- CONTROLLING INTERESTS 0 0

TOTAL EQUITY 0 0

TOATAL LIABILITIES & SHAREHOLDERS EQUITY 1366 3.944784567 100


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2008-2009

PARTICULAR CHANGE CHANGE% VERTICAL


SHORT TERM INVESTMENT -21 -9.85915493 0.481831

ACCOUNTS AND NOTES RECEIVABLE,NET -59 -1.259876148 11.6041

INVENTORIES 96 3.806502776 6.569966

PREPAID EXPENSES & OTHER CURRENT ASSESTS -130 -9.818731118 2.996386



AMORTIZATION INTANGIBLE ASSESTS, NET 109 14.89071038 2.11052

GOODWILL 1410 27.5175644 16.39731

OTHER NON AMORTIZABLE INTANGIBLE ASSESTS 654 57.9787234 4.471994NON AMORTIZABLE INTANGIBLE ASSESTS 2064 33.0134357 20.8693

INVESTMENT IN NON CONTROLLED AFFILIATES 601 15.47772341 11.25276

OTHER ASSESTS -1693 -63.69450715 2.421702

TOTAL ASSESTS 3854 10.70734011 100


CURRENT LIABILITY

SHORT TERN OBLIGATION 95 25.74525745 1.164425

ACCOUNT PAYABLE & OTHER C.L -146 -1.764776985 20.395

INCOME TAX PAYABLE 20 13.79310345 0.414073

TOTAL CURRENT LIABILITY -31 -0.3527939 21.9735LONG TERM OBLIGATION -458 -5.828455078 18.57057

OTHERL IABILITY -1426 -20.32207496 14.03082

DEFERRRED INCOME TAXES 433 191.5929204 1.653784

TOTAL LIABILITIES -1482 -6.203951775 56.22867




PEPSI CO COMMON SHARE HOLDERS EQUITY 0 0

Common stock, PER SHARE 0 0 0.075286

CAPITAL IN EXCESS OF PER VALUE -101 -28.77492877 0.627384RETAINED EARNINGS 3167 10.33683661 84.83487

ACCUMULATED OTHER COMPREHENSIVE LOSS 900 -19.17341287 -9.52118

REPURCHASED COMMON STOCK 739 -5.232969834 -33.5851

TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY 4705 38.55609276 42.43124

NON- CONTROLLING INTERESTS 638 0 1.601084

TOTAL EQUITY 17442 0 43.77133



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2009-2010

PARTICULAR CHANGE(2010) CHANGE% VERTICAL


SHORT TERM INVESTMENT 234 121.875 0.625064

ACCOUNTS AND NOTES RECEIVABLE,NET 1699 36.74307958 9.277655

INVENTORIES 754 28.80061115 4.947691

PREPAID EXPENSES & OTHER CURRENT ASSESTS 311 26.04690117 2.208267



AMORTIZATION INTANGIBLE ASSESTS, NET 1184 140.78478 2.971256

GOODWILL 8127 124.3801653 21.51189

OTHER NON AMORTIZABLE INTANGIBLE ASSESTS 10001 561.2233446 17.28904NON AMORTIZABLE INTANGIBLE ASSESTS 18128 217.989418 38.80093

INVESTMENT IN NON CONTROLLED AFFILIATES -3116

-

69.49152542 2.007248

OTHER ASSESTS 724 75.02590674 2.478247

TOTAL ASSESTS 28305 71.03242321 100


CURRENT LIABILITY

SHORT TERN OBLIGATION 4434 955.6034483 7.186771

ACCOUNT PAYABLE & OTHER C.L 2796 34.40383906 16.02717

INCOME TAX PAYABLE -94 -56.96969697 0.104177

TOTAL CURRENT LIABILITY 7136 81.4984011 23.31812

LONG TERM OBLIGATION 12599 170.2567568 29.34427

OTHERL IABILITY 1138 20.35414058 9.873373

DEFERRRED INCOME TAXES 3398 515.629742 5.952783

TOTAL LIABILITIES 24271 108.3236633 68.48855




PEPSI CO COMMON SHARE HOLDERS EQUITY 0 0Common stock, PER SHARE 1 3.333333333 0.045486

CAPITAL IN EXCESS OF PER VALUE 4277 1710.8 6.642408

RETAINED EARNINGS 3285 9.717497412 54.42167

ACCUMULATED OTHER COMPREHENSIVE LOSS 164

-

4.322614655 -5.32625

REPURCHASED COMMON STOCK -3362 25.1214227 -24.5697

TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY 4365 25.81618169 31.21359

NON- CONTROLLING INTERESTS -326

-

51.09717868 0.457793

TOTAL EQUITY 4034 23.12808164 31.51145



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ANALYSISThe statement of financial position provides creditors, investors, and analysts with information on

company's resources (assets) and its sources of capital (its equity and liabilities). It normally also

provides information about the future earnings capacity of a company's assets as well as an indicationof cash flows that may come from receivables and inventories. Assets are resources controlled by the

company as a result of past events and from which future economic benefits are expected to flow to

the entity.

Total current assets- current assets are assets which will normally be converted into cash within a

fiscal year or within an operating cycle. The total current assets are increasing from 2008 to 2009 and

then again from 2009 to 2010. Current assets include:-

cash and cash equivalent- PepsiCo Inc.'s cash and cash equivalents increased from 2 008to 2009 and from 2009 to 2010.

Short term investment- Investments which are intended to be sold in the short term (lessthan one year) including trading securities, available-for-sale securities, held-to-maturitysecurities, and other short-term investments. PepsiCo short-term investments declined from2008 to 2009 but then increased from 2009 to 2010 exceeding 2008 level.

Inventories- in case of manufacturing firms, inventory would mainly consist of materials andcomponents required for the manufacturing of the finished goods, goods in the process ofconversion remaining with the factory at various stages of completion. Inventories have beencontinuously increasing for all the years.

Prepaid expenses- some of the items of expenses are usually paid in advance such as rent,taxes, subscription and insurance. The rationale behind including these prepayments ascurrent assets is that in case these prepayments had not been made, they would have requireduse of cash during the period. the prepaid expenses decreased in 2009 and then againincreased in 2010.

Fixed assets- fixed assets are relatively long lived items owned by the business. the purposeof holding these asets is very different from that of holding current assets. the benefit of theseassets is available not only in the accounting period in which the cost is incurred but overallseveral accounting periods. these assets include:-

plant property and equipment-Tangible assets that are held by an entity for use in theproduction or supply of goods and services, for rental to others, or for administrative purposesand that are expected to provide economic benefit for more than one year; net of accumulateddepreciation. Examples include land, buildings, and production equipment. PepsiCo property,plant and equipment, net increased from 2008 to 2009 and from 2009 to 2010.

Goodwill- the goodwill of the company is increasing from 2008 to 2009 and from 2009 to 2010 whichis a positive sign for the company.

Total liabilities- Liabilities represents obligations of a company arising from past events, thesettlement of which is expected to result in an outflow of economic benefits from the entity. Sum ofthe carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities areprobable future sacrifices of economic benefits arising from present obligations of an entity to transferassets or provide services to other entities in the future. PepsiCo total liabilities declined from 2008 to2009 but then increased from 2009 to 2010 exceeding 2008 level.

Account payable- bills payable to vendors for goods and services received that are used in an entity'sbusiness. Used to reflect the current portion of the liabilities within one year or within the normal

operating cycle. PepsiCo Inc.'s accounts payable increased from 2008 to 2009 and from 2009 to 2010.


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INTRA FIRM COMPARSION

INCOME AND EXPENDITURE STATEMENT:-

INCOME AND EXPENDITUREACCOUNT is merely another name for profit and lossaccount. such type of profit and loss account is generally adopted by non trading concerns

like clubs, societies, hospitals, and like etc. this account is credited with a all earnings (both

realized and unrealized ) and debited with all expenses (both paid and unpaid ) . The

difference represents a surplus of deficiency for a given period which is carried to the capital

account. It should be noted that items of receipts or payments of capital nature such as

legacies, purchases or sales of any fixed assets must not be included in this account.

INCOME AND EXPENDITURE ACCOUNT OF 5

CONCEQUETIVE YEARS

PARTICULAR 2010 2009 2008 2007 2006

NET REVENUE 57838 43232 43251 39474 35137

COGS 26575 20099 20351 18038 15762

GROSS PRIFIT 31263 23133 22900 21436 19375

SELLING, GENERAL & ADM. EXPENSE 22814 15026 15877 14208 12711

AMORTZATION OF INTANGIBE ASSESTS 117 63 64 58 162

OPERATING PROFIT 8332 8044 6959 7170 6502

BOTTLING EQUITY INCOME 735 365 374 560 553

INTEREST EXPENSES -903 -397 -329 -224 -239

INTEREST INCOME 68 67 41 125 173

INCOME BEFORE INCOME TAX 8232 8079 7045 7631 6989

PROVISION FOR INCOME TAX 1894 2100 1879 1973 1347

NET INCOME 6338 5979 5166 5658 5642

HORIZONTAL/VERTICAL ANAYLSIS (2006-2007)


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NET REVENUE 4337 12.3431141 100

COGS 2276 14.4397919 45.6959011

GROSS PRIFIT 2061 10.63741935 54.3040989

SELLING, GENERAL & ADM. EXPENSE 1497 11.77720085 35.99331205

AMORTZATION OF INTANGIBE ASSESTS -104 -64.19753086 0.146932158

OPERATING PROFIT 668 10.27376192 18.16385469

BOTTLING EQUITY INCOME 7 1.265822785 1.418655317

INTEREST EXPENSES 15 -6.276150628 -0.567462127

INTEREST INCOME -48 -27.74566474 0.316664133

INCOME BEFORE INCOME TAX 642 9.1858635 19.33171201

PROVISION FOR INCOME TAX 626 46.47364514 4.998226681

NET INCOME 16 0.28358738 14.33348533

HORIZONTAL/VERTICAL ANALYSIS (2007-2008)


NET REVENUE 3777 9.568323453 100

COGS 2313 12.82292937 47.05324732

GROSS PRIFIT 1464 6.829632394 52.94675268


AMORTZATION OF INTANGIBE ASSESTS 6 10.34482759 0.147973457

OPERATING PROFIT -211 -2.942817294 16.08980139

BOTTLING EQUITY INCOME -186 -33.21428571 0.864719891

INTEREST EXPENSES -105 46.875 -0.760676054

INTEREST INCOME -84 -67.2 0.094795496

INCOME BEFORE INCOME TAX -586 -7.67920325 16.28864073

PROVISION FOR INCOME TAX -94 -4.764318297 4.344408222

NET INCOME -492 -8.695652174 11.9442325


PARTICULAR CHANGE2009 CHANGE%2009 VERTICAL

NET REVENUE -19 -0.04392962 100

COGS -252 -1.23826839 46.49102517

GROSS PRIFIT 233 1.017467249 53.50897483

SELLING, GENERAL & ADM. EXPENSE -851 -5.359954651 34.75666173

AMORTZATION OF INTANGIBE ASSESTS -1 -1.5625 0.145725389


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BOTTLING EQUITY INCOME -9 -2.406417112 0.844282013

INTEREST EXPENSES -68 20.66869301 -0.918301258

INTEREST INCOME 26 63.41463415 0.154977794


PROVISION FOR INCOME TAX 221 11.76157531 4.857512953

NET INCOME 813 15.73751452 13.83003331


PARTICULAR CHANGE(2010) %CHANGE(2010) vertical analysis(2010)

NET REVENUE 14606 33.78515914 100

COGS 6476 32.22050848 45.94730108

GROSS PRIFIT 8130 35.14459863 54.05269892


AMORTZATION OF INTANGIBE ASSESTS 54 85.71428571 0.202289152


BOTTLING EQUITY INCOME 370 101.369863 1.27079083INTEREST EXPENSES -506 127.4559194 -1.561257305

INTEREST INCOME 1 1.492537313 0.117569764


PROVISION FOR INCOME TAX -206 -9.80952381 3.274663716

NET INCOME 359 6.004348553 10.95819358

ANALYSISNet revenue- PepsiCo Inc.'s net revenue declined from 2008 to 2009 but then increased from2009 to 2010 exceeding 2008 level. In 2009, they incurred a charge of $36 million inconjunction with the Productivity for Growth program that began in 2008. The programincludes actions in all divisions of the business, including the closure of six plants that theybelieve will increase cost competitiveness across the supply chain, upgrade and streamlinethe product portfolio, and simplify the organization for more effective and timely decision-making. In 2010, they incurred merger and integration charges of $799 million related to theacquisitions of PBG and PAS.The merger and integration charges related to our acquisitions of PBG and PAS are beingincurred to help create a more fully integrated supply chain and go-to-market Businessmodel, to improve the effectiveness and efficiency of the Distribution of our brands and to

enhance our revenue growth. These charges also include closing costs, one-time financingcosts and advisory fees related to our acquisitions of PBG and PAS. In addition, we recorded


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$9 million of merger-related charges, representing our share of the respective merger costs ofPBG and PAS, in bottling equity income.

Operating profit-`PepsiCo Inc.'s operating profit increased from 2008 to 2009 and from 2009to 2010 because the impact on market of the commodity hedges and lower reconstructing,impairment charges related to the productivity of growth program were low thereby

increasing operating profit of the company.

Net income- PepsiCo Inc.'s income before income taxes increased from 2008 to 2009 andfrom 2009 to 2010. The net income which tells the consolidated profit or loss for the periodincreased from 2008 to 2009 and then again decreased in 2010.because the interest expensesincurred in 2010 were large.

CASH FLOW STATEMENT

In financial accounting, a cash flow statement is also known as fund flow statement or

statement of cash flow. It is a financial statement that shows how changes in balance sheetand income and expenditure account affects the cash and cash equivalents, and breaks down

the analysis into operating, investing and financial activities. Essentially the cash flow

statement is concerned with flow of cash in and cash out of the business.

The statement captures both the current operating results and the accompanying changes in

the balance sheet . As an analytical tool , the statement of cash flows is useful in determining

the short term viability of a company , particularly its ability to pay bills

The cash flow statement is intended to


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Provide information on a firms liquidity and solvency and its ability to change cashflows in future circumstances

Provide additional information for evaluating changes in assets , liabilities and equity Improve the comparability of different accounting methods Indicate the amount , timing and probability of future cash flows

CASH FLOW STATEMENT OF 5 CONCEQUETIVE

YEARS

PARTICULARS 2010 2009 2008 2007

Operating Activities

Net Income 6338 5979 5166 5670

Depreciation and Amortization 2327 1635 1543 1426

Stock-Based compensation expense 299 227 238 260

Restructuring and Impairment Charges 36 543 102

Cash payment for restructuring charges -31 -196 -180 -22

Merger and Integration costs 808 50Cash Payments for merger and integration costs -385 -49

OPERATING ACTIVITIES

INVESTING ACTIVITIES

FINANACIAL ACTIVITIES


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Gain on previously held equity interests in PBG and PAS -958

Assets Write Off 145

Non-cash foreign exchange loss related to Venezuela devaluation 120

Excess tax benefits from share-based payment arrangements -107 -42 -107 -208

Pension and retiree medical plan contributions -1734 -1299 -219 -310

Pension and retiree medical plan expenses 453 423 459 535

Bottling equity income, net of dividends 42 -235 -202 -441

Deferred income taxes and other tax charges and credits 500 284 573 118

Change in accounts and notes receivable -268 188 -549 -405

Change in inventories 276 17 -345 -204

Change in prepaid expenses and other current assets 144 -127 -68 -16

Change in accounts payable and other current liabilities 488 -133 718 522

Change in income taxes payable 123 319 -180 128

Other, net -132 -281 -391 -221

Net Cash Provided by Operating Activities 8448 6796 6999 6934

Investing Activities 2010 2009 2008 2007

Capital spending -3253 -2128 -2446 -2430

Sales of property, plant and equipment 81 58 98 47

Acquisitions of PBG and PAS, net of cash and cash equivalents

acquired -2833

Acquisition of manufacturing and distribution rights from DPSG -900

Investment in WBD -463

Other acquisitions and investments in no controlled affiliates -83 -500 -1925 -1320

Divestitures 12 99 6Cash restricted for pending acquisitions 15 -40

Cash proceeds from sale of PBG and PAS stock 358 315

Short-term investments, by original maturity

More than three months purchases -12 -29 -156 -83

More than three months maturities 29 71 62 113

Three months or less, net -229 13 1376 -413

Other investing, net -17 27

Net Cash Used for Investing Activities -7668 -2401 -2667 -3744

Financing Activities 2010 2009 2008 2007

Proceeds from issuances of long-term debt 6451 1057 3719 2168

Payments of long-term debt -59 -226 -649 -579

Debt repurchase -500

Short-term borrowings, by original maturity

More than three months proceeds 227 26 89 83

More than three months payments -96 -81 -269 -133

Three months or less, net 2351 -963 625 -345

Cash dividends paid -2978 -2732 -2541 -2204

Share repurchases common -4978 -4720 -4300

Share repurchases preferred -5 -7 -6 -12


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Proceeds from exercises of stock options 1038 413 620 1108

Excess tax benefits from share-based payment arrangements 107 42 107 208

Acquisition of no controlling interest in Lebedyansky from PBG -159

Other financing -13 -26

Net Cash Provided by/(Used for) Financing Activities 1386 -2497 -3025 -4006

Effect of exchange rate changes on cash and cash equivalents -166 -19 -153 75

Net Increase in Cash and Cash Equivalents 2000 1879 1154 -741

Cash and Cash Equivalents, Beginning of Year 3943 2064 910 1651

Cash and Cash Equivalents, End of Year 5943 3943 2064 910

CASH FLOW ANAYSIS (2009-2010)

PARTICULARS change change%


Net Income 359 6.004349

Depreciation and Amortization 692 42.32416Stock-Based compensation expense 72 31.71806

Restructuring and Impairment Charges -36 -100

Cash payment for restructuring charges 165 -84.1837

Merger and Integration costs 758 1516

Cash Payments for merger and integration costs -336 685.7143

Gain on previously held equity interests in PBG and PAS -958

Assets Write Off 145


Excess tax benefits from share-based payment arrangements -65 154.7619

Pension and retiree medical plan contributions -435 33.4873Pension and retiree medical plan expenses 30 7.092199

Bottling equity income, net of dividends 277 -117.872

Deferred income taxes and other tax charges and credits 216 76.05634

Change in accounts and notes receivable -456 -242.553

Change in inventories 259 1523.529

Change in prepaid expenses and other current assets 271 -213.386

Change in accounts payable and other current liabilities 621 -466.917

Change in income taxes payable -196 -61.442

Other, net 149 -53.0249

Net Cash Provided by Operating Activities 1652 24.30842

Investing Activities change change%

Capital spending -1125 52.86654

Sales of property, plant and equipment 23 39.65517

Acquisitions of PBG and PAS, net of cash and cash equivalents

acquired -2833

Acquisition of manufacturing and distribution rights from DPSG -900

Investment in WBD -463

Other acquisitions and investments in noncontrolled affiliates 417 -83.4

Divestitures -87 -87.8788


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Cash restricted for pending acquisitions -15 -100

Cash proceeds from sale of PBG and PAS stock 0

Short-term investments, by original maturity 0

More than three months purchases 17 -58.6207

More than three months maturities -42 -59.1549

Three months or less, net -242 -1861.54

Other investing, net -17

Net Cash Used for Investing Activities -5267 219.3669

Financing Activities change change%

Proceeds from issuances of long-term debt 5394 510.3122

Payments of long-term debt 167 -73.8938

Debt repurchase -500

Short-term borrowings, by original maturityMore than three months proceeds 201 773.0769

More than three months payments -15 18.51852

Three months or less, net 3314 -344.133

Cash dividends paid -246 9.004392

Share repurchases common -4978

Share repurchases preferred 2 -28.5714

Proceeds from exercises of stock options 625 151.3317

Excess tax benefits from share-based payment arrangements 65 154.7619

Acquisition of noncontrolling interest in Lebedyansky from PBG -159

Other financing 13 -50Net Cash Provided by/(Used for) Financing Activities 3883 -155.507

CASH FLOW ANALYSIS (2008-2009)

PARTICULARS change change%


Net Income 813 15.73751

Depreciation and Amortization 92 5.962411

Stock-Based compensation expense -11 -4.62185

Restructuring and Impairment Charges -507 -93.3702

Cash payment for restructuring charges -16 8.888889

Merger and Integration costs 50

Cash Payments for merger and integration costs -49

Gain on previously held equity interests in PBG and PAS 0

Assets Write Off 0


Excess tax benefits from share-based payment arrangements 65 -60.7477


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Pension and retiree medical plan contributions -1080 493.1507

Pension and retiree medical plan expenses -36 -7.84314

Bottling equity income, net of dividends -33 16.33663

Deferred income taxes and other tax charges and credits -289 -50.4363

Change in accounts and notes receivable 737 -134.244

Change in inventories 362 -104.928

Change in prepaid expenses and other current assets -59 86.76471

Change in accounts payable and other current liabilities -851 -118.524

Change in income taxes payable 499 -277.222

Other, net 110 -28.133

Net Cash Provided by Operating Activities -203 -2.90041


Capital spending 318 -13.0008

Sales of property, plant and equipment -40 -40.8163

Acquisitions of PBG and PAS, net of cash and cash equivalents acquired 0

Acquisition of manufacturing and distribution rights from DPSG 0

Investment in WBD 0

Other acquisitions and investments in noncontrolled affiliates 1425 -74.026

Divestitures 93 1550

Cash restricted for pending acquisitions 55 -137.5

Cash proceeds from sale of PBG and PAS stock -358 -100


More than three months purchases 127 -81.4103

More than three months maturities 9 14.51613


Other investing, net 0

Net Cash Used for Investing Activities 266 -9.97375


Proceeds from issuances of long-term debt -2662 -71.5784

Payments of long-term debt 423 -65.1772

Debt repurchase 0

Short-term borrowings, by original maturityMore than three months proceeds -63 -70.7865

More than three months payments 188 -69.8885



Share repurchases common 4720 -100

Share repurchases preferred -1 16.66667

Proceeds from exercises of stock options -207 -33.3871

Excess tax benefits from share-based payment arrangements -65 -60.7477

Acquisition of noncontrolling interest in Lebedyansky from PBG 0

Other financing -26

Net Cash Provided by/(Used for) Financing Activities 528 -17.4545


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Effect of exchange rate changes on cash and cash equivalents 134 -87.5817

Net Increase in Cash and Cash Equivalents 725 62.82496

Cash and Cash Equivalents, Beginning of Year 1154 126.8132

Cash and Cash Equivalents, End of Year 1879 91.03682

CASH FLOW ANALYSIS (2007-2008)PARTICULARS change change%


Net Income -504 -8.88889

Depreciation and Amortization 117 8.204769

Stock-Based compensation expenses -22 -8.46154

Restructuring and Impairment Charges 441 432.3529

Cash payment for restructuring charges -158 718.1818

Merger and Integration costs 0

Cash Payments for merger and integration costs 0Gain on previously held equity interests in PBG and PAS 0

Assets Write Off 0


Excess tax benefits from share-based payment arrangements 101 -48.5577

Pension and retiree medical plan contributions 91 -29.3548

Pension and retiree medical plan expenses -76 -14.2056

Bottling equity income, net of dividends 239 -54.195

Deferred income taxes and other tax charges and credits 455 385.5932

Change in accounts and notes receivable -144 35.55556

Change in inventories -141 69.11765Change in prepaid expenses and other current assets -52 325

Change in accounts payable and other current liabilities 196 37.54789

Change in income taxes payable -308 -240.625

Other, net -170 76.92308

Net Cash Provided by Operating Activities 65 0.93741


Capital spending -16 0.658436

Sales of property, plant and equipment 51 108.5106

Acquisitions of PBG and PAS, net of cash and cash equivalents acquired 0

Acquisition of manufacturing and distribution rights from DPSG 0

Investment in WBD 0

Other acquisitions and investments in no controlled affiliates -605 45.83333

Divestitures 6

Cash restricted for pending acquisitions -40

Cash proceeds from sale of PBG and PAS stock 43 13.65079


More than three months purchases -73 87.95181

More than three months maturities -51 -45.1327


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Other investing, net -27 -100

Net Cash Used for Investing Activities 1077 -28.766


Proceeds from issuances of long-term debt 1551 71.54059

Payments of long-term debt -70 12.08981

Debt repurchase 0

Short-term borrowings, by original maturity

More than three months proceeds 6 7.228916

More than three months payments -136 102.2556



Share repurchases common -420 9.767442Share repurchases preferred 6 -50

Proceeds from exercises of stock options -488 -44.0433

Excess tax benefits from share-based payment arrangements -101 -48.5577

Acquisition of noncontrolling interest in Lebedyansky from PBG 0

Other financing 0

Net Cash Provided by/(Used for) Financing Activities 981 -24.4883

Effect of exchange rate changes on cash and cash equivalents -228 -304

Net Increase in Cash and Cash Equivalents 1895 -255.735

Cash and Cash Equivalents, Beginning of Year -741 -44.8819

Cash and Cash Equivalents, End of Year 1154 126.8132

ANALYSISOperating ActivitiesIn 2009, our operations provided $6.8 billion of cash, compared to $7.0 billion in the prior year,reflecting a $1.0 billion ($0.6 billion after-tax) discretionary pension contribution to our U.S. pension

plans, $196 million of restructuring payments related to the Productivity for Growth program and $49million of PBG/PAS merger cost payments. Operating cash flow also reflected net favourableworking capital comparisons to the prior year.

In 2008 operations provided $7.0 billion of cash, compared to $6.9 billion in the prior year, primarilyreflecting solid business results. The operating cash flow in 2008 reflects restructuring payments of$180 million, including $159 million related to the Productivity for Growth program, and pension andretiree medical contributions of $219 million, of which $23 million were discretionary.Investing ActivitiesIn 2009, net cash used for investing activities was $2.4 billion, primarily reflecting $2.1 billion forcapital spending and $0.5 billion for acquisitions.

In 2008, $2.7 billion of investing activities, primarily reflecting $2.4 billion for capital spending and$1.9 billion for acquisitions. Significant acquisitions included the joint acquisition with PBG in Russia


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and the acquisition of a snacks company in Serbia. The use of cash was partially offset by netproceeds from sales of short-term investments of $1.3 billion and proceeds from sales of PBG andPAS stock of $358 million.

Net capital spending of about $3.6 billion in 2010. Additionally, in connection with the December 7,2009 agreement with Dr Pepper Snapple Group, Inc. (DPSG) to manufacture and distribute certain

DPSG products in the territories where they are currently sold by PBG and PAS, they will make anupfront payment of $900 million to DPSG upon closing of the proposed mergers with PBG and PAS.Financing ActivitiesIn 2009, net cash used for financing activities was $2.5 billion, primarily reflecting the return ofoperating cash flow to our shareholders through dividend payments of $2.7 billion. Net proceeds fromissuances of long-term debt of $0.8 billion and stock option proceeds of $0.4 billion were mostlyoffset by net repayments of short-term borrowings of $1.0 billion.

In 2008, $3.0 billion was used for financing activities, primarily reflecting the return of operating cashflow to shareholders through common share repurchases of $4.7 billion and dividend payments of$2.5 billion. The use of cash was partially offset by proceeds from issuances of long-term debt, net of

payments, of $3.1 billion, stock option proceeds of $620 million and net proceeds from short-termborrowings of $445 million.

Subsequent to year-end 2009, $4.25 billion of fixed and floating rate notes were issued. The netproceeds from this offering to finance a portion of the purchase price for the PBG and PAS mergersand to pay related fees and expenses in connection with the mergers. Annually review of the capitalstructure with the Board, including the dividend policy and share repurchase activity was done. In thesecond quarter of 2009, the Board of Directors approved a 6% dividend increase from $1.70 to $1.80per share. No shares were repurchased in 2009.The current $8.0 billion authorization hasapproximately $6.4 billion remaining for repurchase. It was anticipated that in 2010 share repurchasestogether with a voluntary $600 million pre-tax pension plan contribution will total about $5 billion.

.

RATIO ANALYSIS


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PROFITABILITY RATIO FORMULA 2010 2009 2008

PROFIT MARGIN RATIO PAT/SALES*100 10.95819 13.83003 11.88874

ASSETS TURN OVER RATIO SALES/AVG. TOTAL ASSETS 1.071064 1.140054 1.224859

RETURN ON INVESTMENT

RATIOPAT/AVG. TOTAL ASSETS* 100 11.73693 15.76699 14.56203

RETURN ON EQUITYPAT/ AVG. SHAREHOLDERS EUITY *

10033.19976 41.07754 34.82796

EARNING PER SHARE PAT/ WEIGHTED AVG. NO. OF EQUITY 3.97 3.81 3.26

LIQUIDITY RATIO

CURRENT RATIOCURRENT ASSETS/CURRENT

LIABILITIES1.105525 1.435701 1.229771

QUICK RATIO CA-INVENTORY/CL 0.893343 1.136706 0.942756

DEBTOR TURN OVER RATIO SALES/AVG. DEBTORS

INVENTORY TURN OVER RATIO COGS/AVG. INVENTORY 8.873122 7.820623 8.458437

SOLVENCY RATIO

DEBT. EQUITY RATIO TOTAL DEBT/SHAREHOLDERS EQUITY 1.170357 0.465105 0.674178

INTEREST COVERAGE RATIO PBIT/INTEREST EXPENSE 10.04097 21.18136 22.28875

The ratio are calculated from the balance sheet of the year ending 2010 andincome and expenditure account of the year ending 2010

ANALYSIS

PROFITABILITY

IT TELLS US ABOUT OVERALL OPERATING SUCCESS

AS AN INVESTOR, WE NEED TO KNOW , IS THE COMPANY CAPABLE ENOUGHTO PAY US THE DIVIDENDS

LIQUIDITY

CURRENT RATIO:THIS RATIO SHOWS THE AMOUNT OF C.A A COMPANY HASFOR EVERY RE.1 OF CURRENT LIABILITY

QUICK RATIO: THIS RATIO SHOWS RELATIONSHIP BETWEEN HIGHLY LIQUIDCURRENT ASSETS OF THE COMPANY

SOLVENCY

SHOWS ABILITY OF A COMPANY TO PAY BACK ITS CREDITORS AND LENDERS

DEBT-EQUITY RATIO :TOTAL DEBTS/ SHAREHOLDERS EQUITY


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Profitability ratio: It measures the degree of operating success of a company. The reasonwhy investors are interested in a company is that they think they will earn a reasonable return

in the form of capital gain and dividend on their investment. Therefore they are keen to learn

about the ability of a company to earn revenues in excess of expenses, which can be done

only by analyzing the profitability ratios. They can be categorized into five types which are asfollows:-

Profit margin ratio: This ratio measures the amount of net profit earned per rupee of

revenue. It shows the cushion or relaxation available to the company in case of

increase in cost or decrease in the sales price due to recession or increased

competition. As calculated above we can see that the profit margin ratio has increased

in the year 2009 with respect to the year 2008 and then again decreased in 2010.

Assets turnover ratio: Average total assets are calculated as opening balance of total

assets + closing balance of total assets / 2. This ratio tells how many times the assets

are turned over in a period and thereby generated sales. Higher assets turnover ratio

means that the company is managing its assets efficiently and a lower ratio would

denote that the company has more assets than what it really requires. The funds are

blocked up in the form of assets lying idle. The company has a lower asset turnover

ratio stating that it is not able to manage its funds efficiently and has more assets than

required in the company.

Return on investment/ return on assets: This ratio tells the amount of net profit

earned per rupee of investment made in the assets. It measures the profitability from a

given level of investment.

Return on equity: This ratio tells the amount of net profit earned per rupee of

shareholders equity. It measures the efficiency of the company in utilizing the

shareholders funds. The return on equity rate has increased in 2009 with respect to the

year 2008 and then again has decreased in the year 2010.

Earnings per share: Earnings per share tells the amount of net profit earned by thecompany on one share. E.P.S is basically used for intra- firm comparisons where the

earning of one year is compared to the previous year. It cannot be used for inter firm

comparisons unless the number of equity shares of both the firms is same. The E.P.S

of the company has increased substantially over the years indicating that the amount

of net profit earned by the company has increased per share.

Liquidity ratio:


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Liquidity is the ability of the company to meet its short term obligations whenever

they fall due. An enterprise must have enough cash and other current assets which can

be readily converted into cash so that they can pay the creditors and lenders on time.

In order to analyse the liquidity position of the company we have a tool in the form of

liquidity ratios which are as follows:-

1) Current ratio :This ratio shows the amount of current assets a company has for

every one rupee of current liability. It shows the firm's ability to pay the debt in the

short-term. The idle ratio is 2:1. The current ratio of the year 2009 is increasing with

respect to the year 2008 and then again decreasing in 2010. Overall the current ratio is

more than 1 it means company is in the condition to repay its liability.

2) Quick ratio: this ratio shows the relationship between highly liquid current assets

that is current assets- inventories and current liabilities of the company. we exclude

inventories because it is two steps away from the conversion into cash(sales and

collection). The idle quick ratio is 1:1. As we can see the quick ratio is almost near to

1:1 this is a good sign for company. 3.Inventory turnover ratio-

It shows the number of times inventory is converted into sales. A higher ratio mean

efficient inventory management. Pepsico inventory turnover ratio is high which

indicates efficient inventory management.

3)Solvency ratio: Solvency is the ability of the company to pay back its creditors and

lenders. The long term solvency of a company would depend upon the extent to which

company is using debt in financing its assets. Solvency ratios are broadly of twotypes:-

Debt equity ratio- this ratio measures the relationship between the capitalprovided by the lenders or creditors and funds provided by the shareholders of the

company. A higher debt equity ratio would mean highly leveraged company and a

low debt equity ratio indicates conservative use of debt. Pepsico shows a high debt

equity ratio which means pepsico is highly leveraged company.

Interest coverage ratio- this ratio shows the protection available to the creditors forthe payments of interest by the company. A higher ratio would mean adequatesafety for the payment of interest even if there is a drop in the companys

earnings. There is a slight decrease in the interest coverage ratio but they are able

to pay the interest.


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The coco-cola is an American multinational beverage corporation of manufacturer, retailers

and marketer of non-alcoholic beverage concentrates and syrups. The company is best known

for its flagship product coca-cola, invented in 1886. The coca-cola formula and brand was

bought in 1889 by asa Candler who incorporated the coca-cola beverage, coca-cola currently

offers more than 500 brands in over 200 countries or territories and serves over 1.6 billion

servings each day.


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INTER FIRM COMPARISON

INCOME AND EXPENDITURE ACCOUNT

PEPSI 2010 COCA COLA 2010

HORIZONTAL VERTICAL HORIZONTAL VERTICAL

PARTICULAR CHANGE(%) CHANGE CHANGE CHANGE

NET OPERATING REVENUE 33.79 100 13.32 85

COST OF GOODS SOLD 33.23 45.95 14.47 36.14

GROSS PROFIT 35.15 54.05 12.68 63

OPERATING INCOME 3.59 14.4 2.64 24.05

INTEREST INCOME 1.5 0.11 27.3 0.9

INTEREST EXPENSE 127.45 -1.56 106.47 -2.08

INCOME BEFORE INCOMETAX 1.9 14.23 59.21 40.55

INCOME TAX -9.08 3.27 16.86 6.78

NET INCOME 6.05 10.96 71.72 33.76

ANALYSIS:NET REVENUE: net revenue of Pepsi co far better than coca-cola. Pepsi earn

higher revenue than the coke. The reasons behind those Pepsi co mergers with

PGB &PABs. New products launched and in coca-cola cost of goods sold are

increased.

Gross profit: gross profit of Pepsi co continuously increased from 2008

2010.

Because Pepsi made certain acquisitions Volume of product sold is increased

But for coke

They do well in diet drinks They earn more from diet drinks &coca-cola won leadership of best

selling diet soft drinks

Operating profit: it is decreased because higher raw material cost, difficulteconomic condition &investment in emerging markets.

And in coca-cola selling &advertising expenses increased


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CASH FLOW STATEMENT

PEPSI COCA-COLAHORIZONTAL ANALYSIS

(%)

PARTICULAR 2010 2010

OPERATING ACTIVITIES

NET INCOME 6.004 71.72

Net cash provided by operating activities 24.3 16.44

INVESTING ACTIVITIES

Net cash provided by (used in) investing activities 219.36 6.17

FINANCING ACTIVITIES

Net cash provided by (used in) financing activities -155.5 51.11

CASH AND CASH EQUIVALENTS 6.43 -35.51

Balance at beginning of year 91.03 49.35

Balance at end of year 50.72 21.3

BALANCE SHEET

PEPSI 2010 COCA COLA 2010

HORIZONTAL VERTICAL HORIZONTAL VERTICAL

PARTICULAR CHANGE (%) CHANGE CHANGE CHANGE

TOTAL CURRENT ASSETS 39.75 25.77 22.95 29.64

TOTAL ASSETS 71.03 100 49.55 100

TOTAL CURRENT LIABILITY 81.49 23.31 34.88 25.38

TOTAL LIABILITIES 108.32 68.48 49.82 100

TOTAL EQUITY 23.12 31.51 23.55 42.94

TOTAL LIABILITIES

&EQUITY 71.03 100 49.82 100


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RATIO ANALYSIS:

pepsi coca cola

CONSUMER

INDUSTRY

PROFITABILITY RATIO 2010 2010 2010

PROFIT MARGIN RATIO 10.95819358 33.76804579 6.66

ASSETS TURN OVER RATIO 1.071064157 0.578271394 0.66

RETURN ON INVESTMENT

RATIO11.73692836

19.527094895.92

RETURN ON EQUITY 33.19975904 35.61 14.05

EARNING PER SHARE 3.97 5.12

LIQUIDITY RATIO

CURRENT RATIO 1.105524792 1.165928247 1.17

QUICK RATIO 0.893342562 1.02274692 0.79

DEBTOR TURN OVER RATIO

INVENTORY TURN OVER RATIO 8.87312187 5.073141487 5.92

SOLVENCY RATIO

DEBT. EQUITY RATIO 1.17035679 25.16022727 0.9

INTEREST COVERAGE RATIO 10.04097453 18.99863574 9.39

ANALYSIS:PROFITIBILITY RATIO

1. PROFIT MARGIN RATIOProfit Margin Ratio of Pepsi is increased in 2009 but slightly decreased in

2010. Whereas the profit margin ratio of coca cola is increased in both years. And the

profit margin ratio of coca cola is greater than Pepsi, it means coca cola is better than

in term of profit earned per dollar. There is some reason for the less profit margin

ratio of Pepsi.

Due to increase in profit after tax of coca cola. Cost of goods sold of Pepsi is higher than coca cola. This is the main reason due to

which the Pepsis profit margin ratio is less than Coca-cola.

Expense of PepsiCo is high.Profit margin ratio of both companies is higher than the profit margin ratio of

consumer goods industry, it means that both company is growing.


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1.ASSESTS TURNOVER RATIO:

Assets turnover ratio of Pepsi is more than 1 time whereas coca cola is less

than 1time. It means that Pepsi is efficiently utilizing its assets than Coca-

Cola. The assets turnover ratio is less than 1 time means Coca-Cola has more

assets than what it really requires.Assets turnover ratio of both companies is higher than the assets turnover ratio of

consumer goods industry, it means that both company is growing.

2. RETURN ON INVESTMENT RATIO:Return on investment ratio is approximately equal in 2008 & 2009 but there is a small

decrease in Pepsi ROI in 2010 at the same time The ROI of coca cola increased. It

means that

PepsiCos Rate of return on investment made in assets was lower than theCoca-Cola

Investment made in those assets which did not give good returns.Return on investment ratio of both companies is higher than the return on

investment ratio of consumer goods industry, it means that both company is doing

well.

3. RETURN ON EQUITY RATIOReturn on investment of Pepsi is Greater than Coca Cola but in 2010, there is

slight decrease in Pepsis ROE. Overall in term of Return on equity, Pepsi is

Stronger than Coca-Cola. It means that PepsiCo is More efficient than coca-cola in utilizing the shareholders funds.

05

10

15

20

25

30

35

40

PROFIT

MARGIN

RATIO

ASSETS TURN

OVER RATIO

RETURN ON

INVESTMENT

RATIO

RETURN ON

EQUITY

RATIO

PEPSICO

COCACOLA

CONSUMERGOODS


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LIQUIDITY RATIOCURRENT RATIO

Current ratio of both companies is good and approximately similar to each other and

also approximately equal to industry current ratio. It means that both companies are doingwell.

QUICK RATIO

Quick Ratio of both companies is approximately similar to each other and also higher

than the industry quick ratio. It means that both companies are doing well in consumer goods

industry.

INVENTORY TURN OVER RATIO

Pepsi has higher turnover ratio than coca cola. It means that PepsiCo efficiently

manage their inventory.

Inventory turnover Ratio of both companies is higher than the industry inventory turn over

Ratio. It means that both the companies is doing well in consumer goods industry. Pepsi

ITOR is higher than industry.

0123456789

10

AxisTitle

LIQUIDITY RATIO

PEPSICO

COCACOLA

CONSUMER GOODS


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SOLVENCY RATIODEBT TO EQUITY RATIO

Debt equity ratio of Coca cola is much better than PepsiCo. Coca-Cola used their debt

aggressively, which results in volatile earnings & Pepsi used their debt conservately.Debt to

equity ratio of Coca-Cola is higher than industry debt to equity ratio.

INTEREST COVERAGE RATIO

Interest coverage ratio of Coca cola is better than PepsiCo. It means that coca cola is more

able to pay its interest than PepsiCo. The Interest coverage ratio is higher than the industry

interest coverage ratio. It means that both companies is doing well in consumer goods

industry.

0

5

10

15

20

25

30

DEBT EQUITY

RATIO

INTEREST

COVERAGE

RATIO

Category 3 Category 4

PEPSICO

COCACOLA

CONSUMER GOODS

INDUSTRY


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ConclusionAs per the analysis above we came to the conclusion that the industryperformance of both the companies is good in consumer goods industry.

In some aspect Pepsi is performing well than the cola-cola company.

As we all know that both the companies are completing at the highest

level in future we could see more of products and more of profits

REFERENCES

WWW.WIKIPEDIA.COM

WWW.PEPSI.CO.IN

WWW.COCA-COLA.COM

www.stock-analysis-on.net
http://www.wikipedia.com/http://www.pepsi.co.in/http://www.pepsi.co.in/http://www.coca-cola.com/http://www.stock-analysis-on.net/http://www.stock-analysis-on.net/http://www.stock-analysis-on.net/http://www.coca-cola.com/http://www.pepsi.co.in/http://www.wikipedia.com/

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