The company was organized into six reportable segments or divisions, these include the following:
1. Frito-Lay North America (FLNA), which includes our branded food and snack businesses in the United States and Canada.
2. Quaker Foods North America (QFNA), which includes our cereal, …show more content…
The analysis will adopt methods that could include trend analysis profit margin, gross profit, percentage changes, etc.
PepsiCo total net revenue include $62,799, $63,056, and $66,683 for 2016, 2015, and 2014, respectively. From the figure, I can see that the total revenue dropped for the fiscal year 2015 and 2016, this is because I am using 2014 as my base year. It is also interesting to see that the operating profit increase in 2016, even though 2016’s total net revenue appeared to be lower that the two previous years.
In 2016, the total operating profit posted a whooping sum of 17 percent increase, with an operating margin of 2.3 percentage points. According to PepsiCo 2016 form 10-k, “Operating profit growth was driven by the benefit of actions associated with our productivity initiatives, which contributed more than $1 billion in cost reductions across a number of expense categories throughout all of our segments, effective net pricing and volume growth. Additionally, the impact of recording an impairment charge in the prior year and ceasing the operations of our MQD joint venture contributed 1 percentage point to operating profit growth.” (PepsiCo, pg. …show more content…
It important to know that whatever affects net profit, will affect operating profit, as indicated in the report. The operating profit margins for the year(s) 2014, 2015, and 2016, showed a 1,12% decrease from 2014 to 2015 (14.47% - 13.25%), but the 2016 operating profit margin balanced the deficit, as the profit grew from 13.25% earned in 2015, to 15.58% earned in 2016, and that is a 2.33%