Comparative Analysis of Pepsi &

Coca-Cola for 2013 (Financial

Ratios Analysis)




2014
Overview
Pepsi was first
introduced as
"Brad's Drink
in New Bern, North
Carolina, United
States, in 1893
by Caleb Bradham,
who made it at his
drugstore where
the drink was sold.
Coca Cola was
invented by a
pharmacist (John
Pemberton) in the
year 1886 when he
was experimenting for
a recipe for headache
and an energizer.
Nowadays Coke
serves as one of the
number one
recognized brands of
the world.
ABILITY TO PAY CURRENT
LIABILITIES
Current ratio is mainly used to give an idea
of the company's ability to pay back its short-
term liabilities (debt and payables) with its
short-term assets (cash, inventory,
receivables).
Acid-test ratio
A indicator that determines whether a firm
has enough short-term assets to cover its
immediate liabilities without selling
inventory.
ABILITY TO SELL INVENTORY AND COLLECT
RECEIVABLES
Inventory Turnover - A ratio showing how many
times a company's inventory is sold and replaced
over a period.

Accounts receivable turnover
The ratio tells how many times during
the year average receivables were
turned into cash. Accounts receivable
turnover measures the ability to collect
cash from customers.
Days Sales in Receivables
Days Sales In Receivables tells you how many
days on average it takes to turn your accounts
receivable balance into cash. Therefore it
measures the efficiency of your collections policy
and department.
ABILITY TO PAY LONG-TERM
DEBT
Debt Ratio - a
financial ratio that
measures the
extent of a
companys or
consumers
leverage.
Times-Interest-Earned Ratio
Ensuring interest
payments to debt
holders and
preventing
bankruptcy
depends mainly on
a company's ability
to sustain earnings.
PROFITABILITY
Rate of Return on Sales - This measure is helpful to
management, providing insight into how much profit is
being produced per dollar of sales. A ratio widely used to
evaluate a company's operational efficiency. ROS is also
known as a firm's "operating profit margin"
Rate of Return on Total
Assets
Measures a
companys success
in using assets to
earn a profit.
Net Income + Interest
Expense/Average Total Assets
Rate of Return on Common
Stockholders Equity
The amount of net income returned as a percentage of
shareholders equity. Return on equity measures a
corporation's profitability by revealing how much profit
a company generates with the money shareholders
have invested.
Earnings per Share of Common
Stock (EPS)
The portion of a
company's profit
allocated to each
outstanding share
of common stock.
Earnings per share
serves as an
indicator of a
company's
profitability.
ANALYZE STOCK AS AN
INVESTMENT
Price/Earnings ratio - It's
usually more useful to
compare the P/E ratios of
one company to other
companies in the same
industry, to the market in
general or against the
company's own historical
P/E.
Dividend Yield
A financial ratio
that shows how
much a company
pays out in
dividends each
year relative to its
share price. In the
absence of any
capital gains, the
dividend yield is
the return on
investment for a
stock.
Book Value per Share of
Common Stock
It would be the amount of money that a holder
of a common share would get if a company
were to liquidate
CONCLUSIONS &
RECOMMENDATIONS
CONCLUSIONS &
RECOMMENDATIONS

!