Financial Analysis: PepsiCo and Coca Cola

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Recommended: Coke and Pepsi compare and contrast

Together both PepsiCo and Coca Cola are both companies that are known around the world for their goods. For decades now, these companies have been competitive against each other to “do better than” the other one, what some would call the “cola wars”. They individually offer a assortment of soft drinks; regular, diet, caffeine free and many other options for the public to choose from. Both of the companies also have quite a few different entities (or off springs) of their company, such as bottled water, energy drinks, and juices. Individually both PepsiCo and Coca Cola; better known as Pepsi and Coke, have produced goods for every income bracket.

Inside this essay we will take a look into the two largest competing companies in the soft drink industry; Coca Cola and PepsiCo. Using financial data provided from 2004 and 2005, we will be able to use financial analysis, both vertical and horizontal, to verify the financial differences between the two companies. We should be able to make proper suggestions and recommendations with the review on both of the individual companies, income statements and balance sheets.

The soft drink industry is one of the largest and assorted industries in the world; consumption in the United States alone is rated at 95%. Together Pepsi and Coke have dominated the soft drink industry, staying higher than any other competition for decades. Not only have they dominated the national market, but also have dominated the global market. Pepsi and Coke have triumphed over many obstacles, so that they may produce and distribute products in most countries around the globe. Both employ a strategy called “the follow up strategy”. When one launches a new product or service, the other is not far behind with a similar p...

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...ttling unit. This will help Pepsi to eliminate competition with any private label companies and keep them on the forefront with Coke. Coca Cola believes in reinvesting into their infrastructure and does not operate a franchise system.

When it comes to figures, Pepsi seems to have more advantages (other entities), whereas Coke is getting better figures. This does not mean either company is better than the other, it shows that there is a tight competition between both companies and both are striving to surpass the other.

Works Cited

PepsiCo.com. (2009). Retrieved on: April 15, 2011 http://www.pepsico.com/index.html#/flash/pepsico_slide.swf

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial accounting (6th ed.). Hoboken, NJ: Wiley.

The Coca Cola Company. (2009). Retrieved on: April 15, 2011

http://www.thecoca-colacompany.com/

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