Financialanalysis is a way to evaluate the result of a company. This method provides a kind of transparency and objectivity from companies to their partners, for example, as their shareholders. Indeed, financial analyzing statement is a reference to decision makers as well as internal management team than external direct or indirect financial investors. In this case, we will focus on Coca Cola company and PepsiCo financial situation. Indeed, it is interesting to work on the comparison of these both competitors because our analysis enables to show ways in which the first firm situation deviates from the other. This financialanalysis is possible thanks to minor differences between Coca cola and Pepsi cola in their accounting methods. It is the reason why the financialanalysis can be relevant. This method uses tools commonly named ratio. There are four performance measures: liquidity, solvency profitability and market measures.
The objective of the ratio analysis is to give an overview on a financial situation. This method standardizes financial information by using percentage instead of raw number for instance. Percentage is used to facilitate evaluation and comparison of various operations. Indeed, it is allows us to enhance number proportionately of the both companies in order to evaluate their results. In order to have results, each company has some resources also called assets. Changing these resources into profits is the goal of a company.
Sommaire de l'analyse financière
Extraits de l'analyse financière
[...] Bibliography Financial statement available at: http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=ko http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=pep ESBCO Platform: Source: DATAMONITOR: Coca-Cola Enterprises Inc. Coca-Cola Enterprises, Inc. SWOT Analysis; Dec2010, p1-9, 9p Charts. Date consulted 12/12/11 Source: Soft Drinks Industry Profile: Global Date: May Date consulted 12/12/11 Internet website: http://www.investopedia.com/ Seminar: ?Financial analyzing statement? Seminar By T. Lindenberg, November 2011, Paris Appendixes Table Global soft drinks market share: % share, by volume Source: ESBCO database, Soft Drinks Industry Profile: Global. Provided by Datamonitor May Consulted on December Information found on EBSCO platform. Source: Soft Drinks Industry Profile: Global. [...]
[...] Profitability ratio It is the company ability to have enough income to attract and keep investment capital. Return on Equity It measures how much income is earned with the common shareholder's investment in the company. Net income / Average common shareholders' equity Compare it to last year and comment on the trend: For Coca Cola the situation is improving between 2009 and 2010. For Pepsi, the situation is slightly going down between 2009 and 2010. For the both firms, common shareholders' equity is increasing between 2009 and 2010. [...]
[...] Then, according to the profitability ratio, Coca appears as more profitable than Pepsi. Indeed, investors prefer to invest in Coca cola because Coca cola is better to convert investment into profit. The difference between the both firms is that Pepsi has a low profit margin but tends to have high asset turnover, whereas Coca has high profit margin but a low asset turnover. Consequently, it is normal that Pepsi has an advantage in inventories management. However, Coca remains more profitable with an income of $ 0.24 for each of sales instead of $ 0.14 for Pepsi. [...]
[...] In others words, how long it takes a company to turn its inventory? 365 days / Inventory turnover ratio Compare it to last year and comment on the trend: The lower the ratio, the better is. Consequently Coca Cola's situation is improving between 2009 and 2010. Pepsi's situation is also improving between 2009 and 2010. Improvement is due to the increase of the inventory turnover ratio. Compare it to the other company (2010): Pepsi has a higher score ratio than Coca cola in 2010. [...]
[...] It is careful watched by management team. A small shift usually indicates a big change in the profitability of the firm's sales. Gross profit / Net Sales Compare it to last year and comment on the trend: For Coca Cola the situation of the gross profit margin is slightly going down (remain almost stable) between 2009 and 2010. For Pepsi, gross profit margin is slightly going up. Gross profit and net sales are increasing in the same proportion during the year in the same way for the both firms. [...]
À propos de l'auteur
Mariane B.etudiantBrand managementFinancial analysis of Coca Cola and Pepsi