Financial Analysis of Coke and Pepsi Essay example

2005 Words 9 Pages
Financial Analysis

Synopsis
In this paper, you will find financial comparisons on both PepsiCo and the Coca-Cola Corporation. Some increases in certain areas of one company and some decreases in areas of another company. There are vertical analysis, horizontal analysis, and ratios of both the industries. These are still the two leading soft drinks in the industry, and most like will remain the leaders in the upcoming years.

Financial Analysis
The purpose of this paper is to provide a financial analysis comparison between PepsiCo and the Coca-Cola Cooperation. Many companies are forever finding ways to improve market value to increase sales, and income. Consumers will always look for deals or special buys to not only save them
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PepsiCo however had a greater increase in all aspects, although their current assets did not increase at the same rate as their current liabilities, which may have been due to the current ratio decrease from 2004 to 2005. The ratio for 2004 was 1.1. The way that was computed was by dividing 10, 454,000 by 9,406,000 for 2005 and 8,639,000 by 6,752,000. The Coca-Cola Corporation had a decrease in current assets for $2,031,000. This was because in 2004, the amount of current assets was $12,281,000 and in 2005, the amount of current assets was $10,250,000. By subtracting 2005 from 2004 you get the difference. The liabilities for the Coca-Cola Corporation also decreased from 2004 to 2005. The liabilities for 2004 were $11,133,000. The liabilities for 2005 were $9,836,000 making a difference of $1,297,000.
Another increase that could be considered favorable to investors and shows an improvement, would be the inventory reports. PepsiCo had an increase in their inventories from 2004 to 2005. The amount of the increase was $152,000. This calculation was determined by subtracting 2004’s inventories of $1,541,000 from 2005’s inventories of $1,693,000. An increase in inventory is used to meet the demands of a company’s product. In this case, there was a higher demand for PepsiCo products in 2005 than in 2004. This could be due to the sales amounts increases

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