An Analysis of PepsiCo and Coca-cola Essay -- Business Analysis

Since the mid 1980s many of us strive become familiar with the terms the poop Wars (Wikipedia, 2010). coca plant Cola and Pepsi leave been the ii largest soft drink competitors in the world for quite most time now. What makes these companies successful? What gives them the retention to prosper for years across the worldly concern? For this project I analyzed the financial statements from 2003 through 2005 of both companies to gain insight as to these questions and others. By reviewing and then analyzing the data it becomes visible that these two companies atomic number 18 still standing strong in a securities industry that is still dominated only by each other. To begin we leave behind examine three ratios for each company. The first ratio is a runniness ratio. Liquidity focuses on the reliability or availability of a borrower to salary cover version the loan they borrowed. A common liquidity metric is c true ratio. accredited ratio measures a companys ability to pay back short term obligations or debts. We get this calculation by taking the certain assets and dividing by accepted liabilities. For instance, PepsiCos current ratio is care to current assets in 2005 (10,454) dual-lane by current liabilities in 2005(9,406) which equals 1.111. Their current ratio in 2004 was 1281. (Current assets for 2004/current liabilities for 2004 8639/6752). coca plant Colas current ratio for 2005 was taken by computing their current assets for 2005 (10,250) and divided by the current 2005 liabilities 99836) which equaled a ratio of 1.041. In 2004 Coca Colas current ratio was equal to current assets for 2004 of 12,281 divided by current liabilities for 2004 of 11, 133, which totaled 1.101. What this means is that for every dollar of current liabilities, Coca Cola has $1.04 of ... ...ges and soft drinks. They have ventured out to non carbonate beverages like iced tea and juices but now need to move into the food food market space. My final recommendation for Coca cola is to stay with their product. One of the biggest setbacks for Coca Cola occurred when they introduced their hot coke in the 1990s. (Wikipedia, 2010) This new formula did non go over well with their consumers and they were forced to quickly stop the new Coke production. In conclusion I think both companies are stable and strong. Obviously both companies are able to compete globally which in and of itself says an awful lot. Each company has its strengths and minor weaknesses but their overall financial success has been proven. Their ability to remain the only two competitors amongst their carbonated beverage industry is a strong indicator of their future potential.