Professional Documents
Culture Documents
Pepsi, 2001"
(Case 14).
Copyright 2001 by the Trustees of the University of Virginia Darden School Foundation.
1994
2,547
7,769
32.8%
12.2%
20.6%
1,602
1995
2,783
8,466
32.9%
11.4%
21.4%
1,814
1996
2,583
9,649
26.8%
13.4%
13.4%
1,292
1997
3,381
13,825
24.5%
12.9%
11.6%
1,601
1998
3,178
15,896
20.0%
11.1%
8.9%
1,422
1999
2,605
15,644
16.6%
9.9%
6.8%
1,063
2000
2,349
15,864
14.8%
8.4%
6.4%
1,016
PepsiCo, Inc.
($MM)
NOPAT
Invested capital
Return on invested capital
WACC
ROIC-WACC Spread
EVA
1994
2,122
22,507
9.4%
11.5%
-2.1%
(464)
1995
2,204
27,009
8.2%
11.0%
-2.8%
(760)
1996
1,892
26,823
7.1%
10.5%
-3.4%
(916)
1997
1,922
16,392
11.7%
11.6%
0.1%
24
1998
2,522
19,439
13.0%
10.8%
2.2%
428
1999
1,794
12,849
14.0%
9.9%
4.1%
522
2000
2,292
13,146
17.4%
8.3%
9.1%
1,201
%
60
50
40
30
20
PepsiCo
10
DO NOT PRINT
1981
Coca-Cola
ROE
19.688
ROA
12.541
PepsiCo
ROE
ROA
20.329
8.219
1982
1983
1984
1985
1986
1987
1988
18.435
10.404
19.114
10.679
22.635
10.554
22.744
9.823
26.582
11.159
28.418
10.964
34.094
13.935
13.589
5.343
15.835
6.125
11.151
4.175
22.859
7.167
22.233
5.702
24.121
6.706
24.113
6.845
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
Exhibit 2
Coke vs. Pepsi, 2001
%
30
KO
KO
25
20
15
10
PepsiCo
PepsiCo
1989
1991
1992
1993
1994
1995
1996
1997
36.775
14.144
36.134
14.698
36.546
15.823
48.447
17.045
47.731
18.201
48.787
18.41
55.378
19.852
56.725
21.608
56.477
24.374
23.166
5.959
22.238
6.362
19.479
5.753
24.305
6.213
25.051
6.698
26.021
7.196
21.961
6.315
17.349
4.688
21.497
7.418
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1981
1990
1982
2000
1999
1998
1997
5
1996
1995
epsiCo
PepsiCo
KO
1998
2000
1999
1998
1997
1996
1995
1994
PepsiCo
1999
2000
42.045
18.454
25.555
11.243
23.368
10.449
31.136
8.795
29.792
11.68
30.114
11.904
Exhibit 3
Coke vs. Pepsi, 2001
1990
1991
1992
1993
1994
1995
Coca-Cola
Gallonage (in millions)
Growth
Market share
Market share gain/(loss)
4,915.5
4.0%
41.0%
0.6%
5,038.4
2.5%
41.3%
0.3%
5,108.9
1.4%
41.3%
0.0%
5,310.0
3.9%
41.7%
0.4%
5,580.8
5.1%
42.0%
0.3%
5,915.4
6.0%
42.9%
0.9%
PepsiCo
Gallonage (in millions)
Growth
Market share
Market share gain/(loss)
3,970.5
3.0%
33.1%
0.1%
4,010.2
1.0%
32.9%
-0.2%
3,827.6
-4.6%
30.9%
-2.0%
3,899.0
1.9%
30.6%
-0.3%
4,070.6
4.4%
30.7%
0.1%
4,201.8
3.2%
30.6%
-0.1%
11,996.1
2.6%
12,200.4
1.7%
12,473.2
2.2%
12,722.7
2.0%
13,275.0
4.3%
13,752.9
3.6%
Exhibit 3
1996
1997
1998
1999
2000
6,223.9
5.2%
43.8%
0.9%
6,473.0
4.0%
44.1%
0.3%
6,764.4
4.5%
44.6%
0.5%
6,730.5
-0.5%
44.1%
-0.5%
6,737.2
0.1%
44.0%
-0.1%
4,370.2
4.0%
30.8%
0.2%
4,500.2
3.0%
30.7%
-0.1%
4,704.1
4.5%
31.0%
0.3%
4,732.3
0.6%
31.0%
0.0%
4,736.1
0.1%
30.9%
-0.1%
14,199.5
3.2%
14,665.8
3.3%
15,160.6
3.4%
15,251.6
0.6%
15,328.0
0.5%
Exhibit 4
Coke vs. Pepsi, 2001
Analytical Financial Ratios, The Coca-Cola Company
1994
1995
1996
1997
31.24
(16.33)
3.59
1.08
32.61
(11.27)
3.60
1.12
32.83
(10.62)
3.87
1.15
31.73
(8.90)
4.33
1.12
0.64
0.25
0.54
0.59
0.18
0.45
0.80
0.22
0.47
0.75
0.21
0.47
0.67
18.63
10.02
3.83
0.96
0.75
14.80
9.87
3.55
0.82
0.73
13.69
7.18
3.50
0.77
0.61
19.38
8.99
3.69
0.78
Profitability Analysis
Operating margin
Net profit margin
ROA
ROE
Financial leverage effect
22.9%
15.8%
16.8%
44.3%
70.1%
22.3%
16.6%
17.7%
48.1%
68.9%
21.1%
18.8%
19.1%
51.7%
74.2%
26.5%
21.9%
21.1%
48.0%
89.2%
Growth
Sales
Book assets
Net income before unusual gain/loss
Adjusted NOPAT
Net income
Operating income
15.9%
15.4%
16.7%
19.5%
17.4%
19.5%
11.4%
8.4%
16.9%
8.6%
16.9%
8.6%
2.9%
7.4%
16.9%
-2.8%
16.9%
-2.8%
1.7%
4.5%
18.2%
27.7%
18.2%
27.7%
Activity Analysis
Average days outstanding
Working capital turnover
Fixed assets turnover
Total asset turnover
Liquidity Analysis
Current ratio
Cash ratio
Cash from operations ratio
1999
2000
32.06
(6.14)
4.36
1.05
31.92
(5.49)
3.79
0.92
31.71
(6.52)
3.32
0.93
0.87
0.18
0.35
0.90
0.18
0.39
0.87
0.20
0.38
0.65
17.93
8.70
3.98
0.55
0.65
11.82
6.03
3.63
0.62
0.61
8.26
5.77
4.89
0.63
26.4%
18.8%
22.9%
46.1%
82.6%
20.1%
12.3%
17.3%
37.1%
71.1%
18.0%
10.6%
11.5%
25.8%
61.0%
-0.3%
13.4%
-14.4%
-0.7%
-14.4%
-0.7%
5.3%
12.9%
-31.2%
-19.8%
-31.2%
-19.8%
3.3%
-3.6%
-10.4%
-7.3%
-10.4%
-7.3%
Exhibit 5
Coke vs. Pepsi, 2001
Analytical Financial Ratios, PepsiCo, Inc.
1994
1995
1996
1997
25.33
(34.07)
1.64
1.17
26.89
513.67
1.72
1.20
28.39
200.28
1.82
1.27
40.71
20.98
1.42
0.94
Liquidity Analysis
Current ratio
Cash ratio
Cash from operations ratio
0.96
0.28
0.71
1.06
0.29
0.72
1.00
0.15
0.82
1.47
0.68
0.80
1.39
4.96
3.03
1.65
0.39
1.73
4.38
2.72
1.78
0.30
1.97
4.24
2.48
1.83
0.32
0.71
5.57
3.41
2.27
0.69
Profitability Analysis
Operating margin
Net profit margin
ROA
ROE
Financial leverage effect
11.3%
6.2%
7.2%
24.1%
54.6%
9.9%
5.3%
6.4%
24.7%
54.7%
8.0%
3.6%
4.6%
23.0%
53.8%
12.7%
10.2%
9.6%
16.9%
45.1%
Growth
Sales
Book assets
Net income before unusual gain/loss
Adjusted NOPAT
Net income
Operating income
13.3%
4.6%
12.3%
10.1%
10.3%
10.1%
6.7%
2.6%
-10.0%
-6.7%
-8.3%
-6.7%
4.6%
-3.6%
-28.5%
-14.8%
-28.5%
-14.8%
-33.9%
-18.0%
29.8%
4.6%
86.4%
4.6%
Activity Analysis
Average days outstanding
Working capital turnover
Fixed assets turnover
Total asset turnover
PepsiCo, Inc.
1998
1999
2000
37.59
(28.69)
1.57
1.05
37.25
(12.86)
1.55
1.01
31.28
38.78
2.05
1.14
0.55
0.05
0.41
1.10
0.28
0.80
1.17
0.34
0.99
1.24
6.54
3.09
2.29
0.40
0.44
7.76
3.73
2.71
0.99
0.33
14.59
4.36
3.67
1.62
11.6%
8.9%
9.3%
32.1%
80.5%
13.8%
10.1%
10.2%
30.0%
77.1%
15.8%
10.7%
12.2%
29.0%
72.7%
6.8%
12.7%
33.7%
-2.9%
-7.0%
-2.9%
-8.9%
-22.5%
2.9%
9.1%
2.9%
9.1%
0.3%
4.5%
6.5%
14.4%
6.5%
14.4%
Exhibit 6
Coke vs. Pepsi, 2001
Income Statement and Balance Sheet Forecasts, Coca-Cola Co.
KO
Income Statement
Net operating revenue
Cost of goods sold
Gross profit
2001E
20,223
6,092
14,131
2002E
21,234
6,285
14,949
2003E
22,508
6,617
15,891
Selling expense
General & admin.
7,508
1,224
8,732
7,569
1,248
8,817
7,985
1,273
9,258
Operating income
5,399
6,132
6,633
295
(310)
197
24
244
(280)
227
(10)
254
(264)
261
(10)
Pretax Income
5,605
6,313
6,874
Income Taxes
1,682
1,894
2,062
Net Income
3,923
4,419
4,812
489
295
1,738
700
542
295
1,957
750
597
295
2,131
750
Interest income
Interest expense
Equity income
Other income/(deductions), net
Accumulated goodwill amortization at the end of 2000 was expected to be $192 million.
Source (except for accum. goodwill amortization): Third Quarter Review of 10Q: Flat Revenue and Varied Operating Performance by A
Suisse First Boston Equity Research, November 19, 2001.
Exhibit 6
vs. Pepsi, 2001
nce Sheet Forecasts, Coca-Cola Co.
Balance Sheet
Cash & equivalents
A/R, Net
Inventories
Prepaid expenses & other
Total current assets
Investments in bottlers
Marketable securities
PP&E
Less: Acc. depreciation
Net PP&E
Goodwill & other
Total assets
A/P & accrued liabilities
Loans and notes payable
Current portion of long-term debt
Accrued income taxes
Total current liabilities
Long-term debt
Other
Deferred income taxes
Total liabilities
Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive losses
Treasury stock
Total equity
Total liabilities and equity
2001E
2,238
1,838
1,015
1,834
6,925
2002E
2,406
1,930
1,048
1,868
7,252
2003E
2,432
2,046
1,103
1,964
7,545
5,962
2,364
7,334
(2,935)
4,399
1,783
21,433
6,189
2,364
8,084
(3,476)
4,608
1,488
21,901
6,449
2,364
8,834
(4,073)
4,761
1,193
22,312
3,796
3,600
154
643
8,193
3,868
3,500
153
724
8,245
4,066
3,400
2
788
8,256
681
991
302
10,167
528
991
239
10,003
526
991
170
9,943
870
3,196
23,466
(2,722)
(13,543)
11,267
870
3,196
26,097
(2,722)
(15,543)
11,898
870
3,196
29,067
(2,722)
(18,043)
12,368
21,434
21,901
22,311
enue and Varied Operating Performance by Andrew Conway, Chris O Donnell and Corey Horsch, Credit
Exhibit 7
Coke vs. Pepsi, 2001
Income Statement and Balance Sheet Forecasts, PepsiCo
Pepsico
($ MM Except per Share Amounts)
Income Statement
Revenues
Beverages
Frito-Lay
Quaker Foods
2001E
2002E
2003E
10,553
14,498
2,042
27,093
11,307
15,373
2,109
28,789
12,116
16,273
2,179
30,568
1,667
2,675
408
(365)
4,385
1,818
2,955
426
60
(374)
4,885
1,976
3,239
446
90
(382)
5,369
148
157
92
186
37
239
Pretax Income
4,394
4,979
5,571
1,406
1,593
1,783
Net income
2,988
3,386
3,788
900
236
1,142
1,860
950
295
1,245
1,583
1,000
295
1,504
1,528
Operating Profit
Beverages
Frito-Lay
Quaker Foods
Synergies
Corporate expense
Accumulated goodwill amortization at the end of 2000 was expected to be $751 million.
Source (except for depreciation, amortization, and accum. goodwill amortization): A Balanced Formula for Growth by Andrew Co
Exhibit 7
Coke vs. Pepsi, 2001
and Balance Sheet Forecasts, PepsiCo
Balance Sheet
Cash
Investments
Cash and equivalents
2001E
1,775
466
2,241
2002E
3,677
466
4,143
2003E
2,457
466
2,923
A/R, Net
Inventories
Prepaid Exp. & Other
Total current assets
2,292
1,284
886
4,462
2,435
1,364
942
4,741
2,585
1,449
1,000
5,034
PP&E
Intangibles
Investments in unconsol. affiliated
Other
Total assets
7,449
4,556
3,095
952
16,052
8,021
4,556
3,235
1,019
16,831
8,493
4,556
3,414
1,090
17,553
Short-term borrowings
Current portion of long term debt
Accts payable & other current liabs
Total current liabilities
202
281
5,017
5,500
444
5,284
5,728
64
5,573
5,637
2,106
4,244
1,625
13,475
1,825
4,541
1,974
14,068
1,381
4,859
2,252
14,129
Preferred stock
Common stock & add'l paid-in capital
Retained earnings
Treasury stock
Accumulated comprehensive loss
Total equity
690
18,420
(8,434)
(1,394)
9,282
690
20,786
(8,434)
(1,394)
11,648
690
23,520
(11,434)
(1,394)
11,382
22,757
25,716
25,511
A Balanced Formula for Growth by Andrew Conway, Chris O Donnell and Corey Horsch,