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    Financial Analysis Between Coca-Cola and Pepsi Co. (2004 Only)

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    I want a full analysis between Coca-Cola and PepsiCo (2004 only). Please ensure that all calculations are fully explained (details by step) and full explanation of responses to questions. Please address these specific questions - Thank you!

    1.What are the primary lines of business of these two companies as shown in their notes to the financial statement?
    2.Which company has the dominant position in beverage sales?
    3.What are the gross profits, operating profits, and net income for these two companies?
    4.Compute both companies' 1) current cash debt coverage ratio 2) cash debt coverage ratio 3) free cash flow. Please fully explain what each ratio is telling you.
    5.What ratios do each of these companies use in the Management's Discussion and Analysis section of the annual report to explain their financial condition related to debt financing?
    6.Compute and compare the inventory turnover ratios and days to sell inventory for Coca-Cola and PepsiCo for 2004. Indicate why there might be a significant difference between the two companies.
    7.Compute 1) asset turnover 2) Profit margin on sales 3) rate of return on assets 4) debt to total assets ratio 5) times interest earned ratio. Please fully explain what each ratio is telling you.
    8.What employee stock option compensation plans are offered by Coca-Cola and PepsiCo?

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    Solution Preview

    Coca-Cola V/S PepsiCo
    1. What are the primary lines of business of these two companies as shown in their notes to the financial statement?

    Answer:
    Coca-Cola: Coca-Cola is one of the largest manufacturer, distributer and marketer of the non alcoholic beverage concentrated and syrups across the globe. The company manufactures beverage concentrates and syrups, and then sells these products to the bottling and canning operations and fountain wholesalers and retailers. It also sells finished beverages to the distributers. The company owns the license of almost 500 brands that includes diet and light beverages, waters, enhanced waters, juice and juice drinks, coffees and sports and energy drinks.
    PepsiCo: PepsiCo is a leading global beverage, snack and food company. It manufacture or use contract manufacturers to market and sell a variety of its salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods in approximately 200 countries across the globe. But the biggest market for PepsiCo is North America, Mexico and United Kingdome.

    2. Which company has the dominant position in beverage sales?

    Answer:
    Coca-Cola holds the dominant position in the beverage sales. Coca-Cola ranks higher in global beverage sales than the PepsiCo except in the United States. In United States Coca-Cola have 23% market share in beverage market as compared to 25% of the ...

    Solution Summary

    The solution provides financial analysis between Coca-Cola and Pepsi Co. The primary lines of the two companies are given.

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