Ratio analysis

coca cola & pepsi

 The beverage industry is a major driver of economic growth.

A national council of applied economic research (NCAER) study on
the carbonated soft drink industry indicates that this industry has an
output multiplier effect of 2:1.
In the comparative analysis of Coca Cola and Pepsi my main
emphasis is on the financial position of both companies

Classification of ratio
Profitability ratios
Liquidity ratios
Turnover ratio
Solvency ratio

Balance sheet
27\6\2014

coca cola for quarter

Current Liabilities

Current Assets

Cash and Cash Equivalents

Short-Term Investments
Net Receivables
Inventory
Other Current Assets
Total Current Assets
Long-Term Assets

Long-Term Investments
Fixed Assets
Goodwill
Intangible Assets
Other Assets
Deferred Asset Charges
Total Assets

$356,000

Accounts Payable

Short-Term Debt / Current Portion

of Long-Term Debt
$2,199,000
Other Current Liabilities
$488,000
Total Current Liabilities
Long-Term Debt
$252,000
Other Liabilities
$3,295,000
Deferred Liability Charges
Misc. Stocks
Minority Interest
$0
Total Liabilities
$2,304,000 Stock Holders Equity
Common Stocks
$122,000
Capital Surplus
$4,048,000
Retained Earnings
Treasury Stock
$399,000
Other Equity
$0
Total Equity.
$10,168,000
Total Liabilities & Equity
$0

$2,443,000
$423,000
$0
$2,866,000
$4,053,000
$226,000
$1,113,000
$0
$0
$8,258,000
$4,000
$3,916,000
$1,763,000
($3,482,000)
($291,000)
$1,910,000
$10,168,000

Profit and loss

Quarter Ending:
Total Revenue

$2,333,000

Cost of Revenue

$1,487,000

Gross Profit

$846,000

Operating Expenses:
Research and Development
Sales, General and Admin

$551,000

Non-Recurring Items
Other Operating Items
Operating Income

$295,000

Add'l income/expense items

$1,000

Earnings Before Interest and

Tax

$296,000

Earnings Before Tax

$266,000

Income Tax

$68,000

Minority Interest

Equity Earnings/Loss
Unconsolidated Subsidiary

Net Income-Cont. Operations

$198,000

Net Income

$198,000

Net Income Applicable to Common $198,000

Shareholders

ballance sheet
27\6\2014
Current Liabilities
Accounts Payable
Short-Term Debt / Current Portion of
Long-Term Debt
Other Current Liabilities
Total Current Liabilities
Long-Term Debt
Other Liabilities
Deferred Liability Charges
Misc. Stocks
Minority Interest
Total Liabilities
Stock Holders Equity
Common Stocks
Capital Surplus
Retained Earnings
Treasury Stock
Other Equity
Total Equity
Total Liabilities & Equity

pepsi for quarter

$12,986,000
$7,242,000
$0
$20,228,000
$25,606,000
$4,927,000
$6,072,000
($133,000)
$129,000
$56,829,000
$25,000
$3,978,000
$47,748,000
$0
($28,147,000)
$23,604,000
$80,433,000

Current Assets
Cash and Cash Equivalents
Short-Term Investments
Net Receivables
Inventory
Other Current Assets
Total Current Assets

$7,607,000
$3,692,000
$8,470,000

$4,194,000
$1,832,000
$25,795,000

Long-Term Assets

Long-Term Investments
Fixed Assets
Goodwill
Intangible Assets
Other Assets
Deferred Asset Charges
Total Assets

$1,902,000
$18,174,000
$16,457,000

$15,790,000
$2,315,000
$0
$80,433,000

Profit and loss

Total Revenue

$16,894,000

Cost of Revenue

$7,778,000

Gross Profit

$9,116,000

Equity Earnings/Loss Unconsolidated

Subsidiary
Net Income-Cont. Operations

Operating Expenses
Research and Development

$0

Sales, General and Admin.

$6,198,000

Non-Recurring Items

$0

Other Operating Items

$22,000

Operating Income

$2,896,000

Add'l income/expense items

$18,000

Earnings Before Interest and Tax

$2,914,000

Interest Expense

$209,000

Earnings Before Tax

$2,705,000

Income Tax

$718,000

Minority Interest

($9,000)

Net Income
Net Income Applicable to Common
Shareholders

$0
$1,978,000
$1,978,000

$1,978,000

PROFITABILITY RATIO
RETURN ON INVESTMENT=
NET OPERATING PROFIT / CAPITAL EMPLOYED * 100

COCA COLA
ROI=

296000
*100=15.49%
1910000

PEPSI
ROI=
2,914,000

60205000

*100=4.8%

PROFITABILITY RATIO
RETURN ON SHARE HOLDERS FUND=
PAT / SHARE HOLDER FUND

COCA COLA
198000
*100=10.36%
1910000

PEPSI
1,978,000
*100=8.37%
23,604,000

PROFITABILITY RATIO
RETURN ON ASSET=
PAT / TOTAL ASSETS *100

COCA COLA
198000
*100=1.94%
10168000

PEPSI

1,978,000
*100=2.45%

80,433,000

PROFITABILITY RATIO
GROSS PROFIT RATIO=
GROSS PROFIT / SALES *100

COCA COLA
846000
*100=36.26%
2333000

PEPSI

9,116,000
*100=53.95%

16,894,000

PROFITABILITY RATIO
NET PROFIT RATIO=
PROFIT AFTER TAX / TOTAL ASSET *100

COCA COLA
198000
*100=8.48%
2333000

PEPSI
1,978,000
*100=2.45%
80,433,000

TURNOVER RATIO
CAPITAL TURNOVER RATIO=
NET SALES / CAPITAL employed

COCA COLA
2333000
=.31
7302000

PEPSI
16,894,000

60205000

=.2806

TURNOVER RATIO
FIXED ASSETS TURNOVER RATIO=
NET SALES / FIXED ASSETS

COCA COLA
2333000
=1.0125
2304000

PEPSI
16,894,000

18174000

=.9295

TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO=
NET SALES / WORKING CAPITAL

COCA COLA
2333000
=5.43:1
429000

PEPSI
16,894,000

5567000

=3.4:1

Test of liquidity/ solvency ratio

Coca cola company

2014

Current assets

3,295,000

Current liabilities

2,866,000

inventory
Pepsi company

$488,000
2014

Current assets

21601000

Current liabilities

$20,228,000

inventory

4,194,000

Title and Content Layout with Chart

Test of liquidity

pepsi

Coca cola

Current ratio

1.27

1.14

Quick ratio

1.06

.97

Chart Title

1.4
1.2

1.27
1.14

1.06

0.97

1
0.8
0.6
0.4
0.2
0
1

2
pepsi

coca cola

Long term solvency ratio

Debt-Equity ratio =
= Debt/ Equity

COCA COLA

4,053,000

1,910,000

PEPSI

=2.12:1

25,606,000
=1.08:1
23,604,000

ANALYSIS
ROI OF coca cola is higher than Pepsi . Through Net operating profit of
Pepsi is higher but cola has less capital employed
Return on investment is higher in coca cola . Through operating profit
is less than Pepsi but shareholder fund is less

conclusion
Pepsi is earning more profit and and good return on investment in it
providing good value to the share holder

Thank you