ACKNOWLEDGEMENT

We owe our gratitude to Allah Almighty whose shower of blessings and kindness has been on us through out the working on these pages. It is His help that we finally able to compile this document. We are indebted to our respected teacher Mr. Athar Ikram whos indispensable and intricate comments on various aspects conjoined with motivation made us come forth holding such as project.

Executive Summary

Pepsi is a very well organized multinational company, which operates almost all over the world. In Pakistan it also has proved itself to be the No.1 soft drink. Now a days Pepsi is recognized as Pakistans National drink. Pepsi's greatest rival is Coca Cola which is an international recognized brand. Cokes basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and

promoting new ideas and product packaging, is successfully maintaining its No.1 position in Pakistan. Pepsi is operating through its 12 bottlers all over Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchises to these bottlers. Bottlers, produce, distribute and help in promoting the brand. Purpose of this project is to analyze the common size financial statements of two franchises of Pepsi Cola International in Pakistan. It help us to make better and more informed business decisions. Through this exercise we would be able to evaluate these companys past and current performance and current financial positions.

Table of Contents
Titles Page # 1. Introduction 01 2. Mission and vision statement 01 3. Facts about company 02 4. Pepsi in Pakistan 04 5. 09 6. 10 7. 13 8. 14 9. 16 10. 21 11. 25 12. 27 13. Conclusion 39 14. Suggestions 40

INTRODUCTION TO THE COMPANY

Pepsi International is a world renowned brand. It is a very well organized multinational company, which operates almost all over the world. They produce, one of the best carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service, all over the world. Pepsi is producing Cola for more than 100 years and it has dominated the world market for a long time. Its head office is in New York.

MISSION STATEMENT
To be the world's premier consumer Products Company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

VISION STATEMENT

To be the world's best beverage company. Being the best means providing outstanding quality, service, cleanliness and value, so that their every customer is contented and happy with their products. To increase the value of their shareholders investment through sales growth, cost control and wise investment of resources.

FACTS ABOUT THE COMPANY

1. Pepsi is a US based public company whose stocks are available in New York. 2. Mountain Dew, acquired by Pepsi-Cola in 1964, switches its advertising and package graphics room hillbillies to action-oriented scenes. 3. The third Mountain Dew slogan appeared in 1973 "Put A Little Yahoo in Your Life." 4. PepsiCo acquired Pizza Hut, Inc. Pizza Hut was founded in 1958 by Dan and Frank Carney. 5. Taco Bell is was acquired by Pepsi. Taco Bell was established in the mid 1960s by Glen Bell. 6. PepsiCo purchased Kentucky Fried Chicken, the leader in the quick service chicken market. KFC was founded by Colonel Harland Sanders. Colonel Sanders began franchising the company in 1952. KFC was spun off along with Pizza Hut and Taco Bell businesses as Tricon Global Restaurants, Inc. in 1997. 7. PepsiCo purchases Seven-Up International, the third largest franchise soft drink operation outside the United States

EXECUTIVES
Ms.Indra K.Nooyi Chairwoman, Chief Exec. Officer and Pres

Mr. Richard Goodman Chief Financial Officer Mr. John Compton Chief Exec. Officer of North America and Member of Liquid Refreshment Beverage Oversight Council Ms. Cynthia M. Trudell Chief Personnel Officer and Sr. VP Mr. Donald M. Kendall Co-Founder

HEAD OFFICE
PepsiCo, Inc. 700 Anderson Hill Road Purchase, NY 10577 United States. Phone: 914-253-2000 Fax: 914-253-2070 Web Site: http://www.Pepsico.com

PEPSI PAKISTAN
The market in Pakistan is surely dominated by Pepsi. It has proved itself to be the No.1 soft drink in Pakistan. Now a days Pepsi is recognized as Pakistans National drink. In 1971, first plant of Pepsi was constructed in Multan, and from their after Pepsi is going higher and higher. Pepsi is the choice soft drink of every one. It is consumed by all age groups because of its distinctive taste. Compared with other Cola in the market, it is a bit sweeter and it contributes greatly to its liking by all. Consumers survey results explain the same outcome and Pepsi has been declared as the most wanted soft drink of Pakistan. Pepsi's greatest rival is Coca Cola which has an international recognized brand. Cokes basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining its No.1 position in Pakistan. In coming future Pepsi is also planning to enter

into the field of fruit drinks. For this purpose it has test marketed its mango juice in Karachi for the first time. When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime, "Teem" to compete with 7up. It successfully, after some years, took over 7up, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys 70% of the market share where as the coke just has 20% markets share. Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and help in promoting the brand. Pepsi also launched its fast food chain KFC i.e. "Kentucky Fried Chicken. and Pizza Hut.

Types of Ratios Analysis:

Ratio analysis provides clues to and symptoms of underlying conditions. Ratios, properly interpreted, identify areas requiring further investigation. A ratio expresses a mathematical relation between two quantities such as percent, rate or proportion. Let us now have a detailed analysis of all the following four ratios: Liquidity Ratios Leverage Ratios Activity Ratios Profitability Ratios

Liquidity Ratios
Liquidity refers to the availability of resources to meet short-term cash requirements. It is affected by the timing of cash inflows and outflows along with prospects of future performance. Analysis of liquidity is aimed at a companys funding requirements. If a company fails to meet its current obligations, its continued existence is doubtful. A lack of liquidity often precedes lower profitability and fewer opportunities. It can foretell a loss of owner control or of investment. To a companys creditors, lack of liquidity can yield delays in collecting interest and principal payments or the loss of amounts due them. This section describes key ratios relevant to assessing liquidity.

Current Ratio Short-term debt-paying ability.

Current Ratio A Beverages B Beverages

1.2 1 0.8 0.6 0.4 0.2 0 2009 2008 A Beverges B Beverages 1.12 0.93

2009 1.03 0.77

2008 1.12 0.93

1.03 0.77

Acid-Test Quick Ratio Immediate Short-term debt-paying ability.

Acid-Test Quick Ratio A Beverages B Beverages

0.8 0.6 0.4 0.2 0 2009 2008 A Beverges B Beverages 0.61 0.51 0.71 0.47

2009 0.51 0.61

2008 0.47 0.71

Leverage Ratios
Leverage refers to a companys long-run financial viability and its abality to cover long-term obligations.

Debt-Equity Ratio:

Gross Profit Ratio

3 2.5 2 1.5 1 0.5 0 2009 2008 A Beverges 2007 1.4 2.1 2.8 A Beverages 2.5 2.1 1.1

2009 1.79 1.23

2008 1.56 2.2

B Beverages

B Beverages

Gross Profit Ratio:

Gross Profit Ratio A Beverages

2009 1.79

2008 1.56

B Beverages
3 2.5 2 1.5 1 0.5 0 2009 2008 1.4 2.1 2.8

1.23

2.2

2.5

Net Profit: A Beverges

B Beverages

3 2.5 2 1.5 1 0.5 0

Net Profit Ratio A Beverages B Beverages 2.1

2.8

2009 1.79 2.5 1.23

2008 1.56

2007 2.1 2.4

2.1 2.2

1.4 1.1

2009

2008

2007

A Beverges

B Beverages

Operating Profit:

Operating Ratio A Beverages

Profit 2009 1.79 1.23 2.8 2.5 2008 1.56 2.2 2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0

B Beverages

2.1 1.4

2.1

1.1

2009

2008

2007

A Beverges

B Beverages

Expenses Ratio:

Epenses Ratio A Beverages B Beverages

2009 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges

B Beverages

Operating Cost Ratio:

Operating (Cost) Ratio A Beverages B Beverages

2009 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges

B Beverages

Net Profit to Net Worth Ratio:

Net Profit to Net Worth Ratio 2009 A Beverages B Beverages 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges

B Beverages

Return on Capital Employed:

Return on Capital Employed (ROI) 2009 A Beverages B Beverages 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges
Earning per Share:

B Beverages

Earning per Share A Beverages B Beverages

2009 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges
Dividend per Share:

B Beverages

Dividend per share A Beverages B Beverages

2009 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges

B Beverages

Fixed Assets turnover Ratio:

Fixed Assets Turnover Ratio 2009 A Beverages B Beverages 1.79 1.23

2008 1.56 2.2

2007 2.1 2.4

3 2.5 2 1.5 1 0.5 0 2009 1.4 2.1

2.8 2.5 2.1

1.1

2008

2007

A Beverges

B Beverages